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City council approved a one-third discount on seven hard-to-sell lots in the subdivision of Southlands on Monday night.
The single-family home lots on Somerset Road, which backs onto a large commercial park next the 10-year-old community, were originally listed for a total price of $851,300.
Instead, council approved that staff draw up a final sales contract with New Tab Homes, which offered $577,500 to buy the batch.
Last week, council’s energy, land and environment committee heard the lots are among few remaining in the subdivision, and staff felt the offer is the best opportunity to move the lots and recuperate capital.
Doing so however, will result in a slight loss for the year compared to price expectations in the community when cost accounting is applied.
Without the sale, the specific subdivision sales would post a $137,000 profitfor 2024 in the community. Moving ahead with the discount would add sales revenue, but would tip the overall calculation into a $52,000 loss.
Coun. Alison Van Dyke said recording a loss on the properties was “unfortunate,” but she would support it “in the interests of increasing the housing stock during a time of an affordability crisis and completing the development.”
The deal leaves just six available lots in the specific phase of the subdivision, and eight in the whole of the community.
Several council members remarked that the 10-year-old prices hadn’t been updated and likely now represent fair market value.
Administrators agreed.
“They’ve seen minimal interest over the years,” said departmental director Kevin Redden. He cited carrying costs at about $21,000 per year in total.
Lots that were priced between $107,000 and $134,000 in 2014 now average $82,500 in the transaction.
Because the discount represents a greater than 10 per cent variation in pricing, council’s approval was required.
New Tab is working on six sites purchased from the land department, including two duplexes and four single-family sites, according to administrators.
The intention in Southlands is to build single-family homes with the potential for back-yard suites on a ‘spec’ basis, that is without a contract buyer but for open marketing, said Redden.
