Al­ter­na­tive ways to find a home in Toronto

Co-ops are just one of sev­eral cre­ative house-hunt­ing op­tions

Village Post - - News - by Eric Sto­ber

In Toronto’s real es­tate mar­ket, any chance for a good deal is one to se­ri­ously con­sider. That’s what has some peo­ple turn­ing to co-ops, a unique model of own­er­ship that is pop­u­lar in places like New York City but still sits on the fringes of Toronto’s real es­tate mar­ket.

“Ev­ery­thing I was look­ing at was a shoe­box, which was get­ting a lit­tle de­press­ing,” said Chelsea Alexan­der, an in­tern ar­chi­tect who bought a 930-square-foot, two-bed­room coop in Rosedale in De­cem­ber 2016.

Alexan­der fi­nally found an apart­ment for a price she could af­ford and a size she was com­fort­able with but had to fa­mil­iar­ize her­self with the co-op model.

With a co-op, you do not own the space it­self, like a condo, but in­stead own a share of the whole co­op­er­a­tive.

Your share gives you ex­clu­sive rights to live in the space, but you do not have a ti­tle in the deed.

This unique style of own­er­ship comes with its own pros and cons, the num­ber one con be­ing it is harder to fi­nance from the big banks be­cause you don’t own a ti­tle in the deed, so the banks have noth­ing to re­pos­sess if you de­fault on the loan.

Both BMO and RBC de­clined Alexan­der fi­nanc­ing, which al­most made her give up on her co-op en­deav­our.

“[It] def­i­nitely was rattling go­ing into my bank, men­tion­ing it was a co-op, and they’re like, ‘Oh, I’m sorry, we don’t ac­tu­ally do that,’ ” she re­called.

Alexan­der even­tu­ally found fi­nanc­ing at credit union DUCA, which is a com­mon source of fi­nanc­ing for co-ops.

“Ul­ti­mately for the ex­tra day of stress (to find al­ter­na­tive fi­nanc­ing) it was worth it,” she said.

The other ma­jor hur­dle for co-ops is the large down payment they often re­quire, usu­ally around 30 per cent of the to­tal cost, com­pared to the usual five per cent with a condo.

Although this may turn off a lot of peo­ple, there is one de­mo­graphic that fits quite well within the model — se­niors.

“The only peo­ple I’ve had that are in­ter­ested in co-ops are re­tired peo­ple who can buy in cash,” said real es­tate agent David Flem­ming.

“Down­siz­ers can­not be­lieve the condo prices.… When you get into a co-op, 2,000 square feet might cost you $1 mil­lion in­stead of $2 mil­lion,” he said.

That makes 26-year-old Alexan­der a unique de­mo­graphic for co-ops. She ad­mits that many of the peo­ple in her 40-unit build­ing are se­niors. But she sees this in a pos­i­tive light due to the com­mit­ment shown

to the prop­erty (turnover is often low in co-ops) and the wealth of ex­per­tise the res­i­dents draw on to man­age the prop­erty.

Co-ops are often a more hand­son style of prop­erty man­age­ment, typ­i­cally gov­erned by an elected board of direc­tors from the mem­ber­ship, as op­posed to a prop­erty man­age­ment com­pany used by con­dos.

Res­i­dents have much more in­put in how the build­ing is op­er­ated and how ren­o­va­tions are per­formed. “Ev­ery­one pulls from their ca­reer, which is fan­tas­tic,” Alexan­der said. And no, she doesn’t have any grass­mow­ing du­ties.

“No! You don’t have to do any­thing,” she said. “We have sep­a­rate con­tracts for ev­ery­thing.”

The more hands-on man­age­ment, mar­ried with the fact that it is a smaller build­ing — typ­i­cal of co-ops, which are often ren­o­vated older build­ings — makes for a closeknit com­mu­nity you might not find in con­dos, as Alexan­der notes.

“It just seems more fam­ily based.… It’s a re­ally friendly com­mu­nity.”

The next frontier

Although co-ops are a longestab­lished al­ter­na­tive to the home­buy­ing norm, there are other op­tions avail­able to those who dream of home own­er­ship but are find­ing it hard to land that mythical two­s­torey, de­tached fish. Here­with, a few other op­tions for those who are in­ter­ested in go­ing to great lengths.

Al­ter­na­tive liv­ing co-own­er­ship

Many Toron­to­ni­ans are turn­ing to co-own­er­ship to cope with high real es­tate prices.

Co-own­er­ship in­volves pool­ing re­sources to­gether, often with fam­ily or friends, to split the cost of a mort­gage.

When peo­ple pool re­sources to­gether, prop­er­ties that may have been above bud­get sud­denly be­come ac­ces­si­ble, cre­at­ing more op­tions to choose from. But the ar­range­ment does have its pit­falls.

It is very im­por­tant be­fore buy­ing to en­sure there is clear com­mu­ni­ca­tion be­tween all par­ties that takes into con­sid­er­a­tion fu­ture cir­cum­stances, such as if one party wishes to sell.

It’s smart to treat co-own­er­ship like a busi­ness part­ner­ship — you can even have a lawyer draft an agree­ment. Once the deal is done, then it is pos­si­ble to split the liv­ing space to al­low pri­vacy, such as cre­at­ing sep­a­rate en­trances, or liv­ing on dif­fer­ent floors — a com­mon ar­range­ment.

Airbnb: the new couch surf­ing

For the com­mit­ment-pho­bic, liv­ing through Airbnb is a vi­able op­tion to get a taste of Toronto’s dif­fer­ent neigh­bour­hoods and not be tied down by a lease or hav­ing to move fur­ni­ture.

Great for those just ar­riv­ing in the city, an Airbnb can be ob­tained quickly, with a wide va­ri­ety of op­tions in any neighbourhood you please.

When you tire of the lo­cal restau­rants and scene, then mov­ing is as easy as a click of a mouse. Although you save money not hav­ing util­ity bills, liv­ing in Airbnbs can run a pre­mium cost as op­posed to longer-term rentals, but that is the price of free­dom!

Liv­ing in a boat

Na­ture lover? Then liv­ing on a boat may be the right op­tion for you! There are a num­ber of ports around Toronto, such as Ma­rina Quay West in the har­bourfront area or Bluffers Park Ma­rina by Scar­bor­ough Bluffs, where you can dock your ves­sel and cosy up to the sound of lap­ping wa­ter.

The price of a boat de­pends on your com­fort level with liv­ing in a smaller space. You can find a boat for as lit­tle as $2,500. Dock­ing fees then can vary from $500 to $1000 a month, de­pend­ing on the size of the boat and other ma­rina fees.

Add in ameni­ties such as hy­dro and elec­tric­ity, and you’re look­ing at a rent of around $1,500 a month. But buyer be­ware: dock­ing over the win­ter is not for the faint of heart — it re­quires much preparation and the ac­cep­tance that some­thing will likely go wrong. But if ad­ven­ture is the name of your game, then don’t let the naysay­ers stop you from en­joy­ing the morn­ing fog and a whiff of fresh air ev­ery day.

Chelsea Alexan­der pur­chased a Toronto co-op apart­ment in 2016

A co-op apart­ment at 21 Dale Ave. is cur­rently listed for $995K

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