[URBAN NOTE] Steve Kupferman in Toronto Life on the collapse of Urbancorp

[rfmcdonald]

In the long article "Screwed" at Toronto Life, Steve Kupferman describes how the failure of Toronto developer Urbancorp has left almost two hundred potential buyers short tens of thousands of dollars, or more, each.

Patrick and Jessie Hooker weren’t planning to buy a house. It was April 25, 2015, and they’d accompanied Patrick’s sister, Jessica, to a sales centre in a former public school near Lawrence and Black Creek Drive. Jessica had bought a home from Urbancorp, a property developer with a 24-year track record of building moderately priced condos and townhouses in the GTA. Her home was to be part of a cluster of 88 supermodern townhouses, semis and detached homes called Ravines on Lawrence. Patrick and Jessie had given her a lift there to sign the papers.

Patrick, a geophysicist, and Jessie, a software engineer, are both in their mid-30s. He has a Bunyan-esque build and a calm, frank demeanour; Jessie, who was born in Malaysia, has dark, shoulder-length hair and an easy smile. At the time, they were living in a rented condo in Fort York. They were happy there, but they knew there wasn’t enough space for a child, let alone Jessie’s mother, who they expected would one day move in with them.

Inside Urbancorp’s sales centre, the Hookers walked through the sleek model suites. There was an open-concept living room with wood-veneer floors. New appliances gleamed in the kitchen. They were dazzled by the premium finishes, the spacious layouts, the high ceilings. While they waited, an Urbancorp salesperson approached them with some news: a buyer had backed out of a deal to buy a $580,000 four-bedroom townhouse just two doors down from Jessica’s. If the Hookers acted quickly, they could reserve it for themselves.

Fearing that another buyer would snatch it up, they scribbled out four post-dated cheques on the spot, for a total of $58,000. Before they knew it, they’d spent nearly all of their savings on something that didn’t yet exist. The scheduled occupancy date for their new home was October 2017, two and a half years away.

They moved out of their condo and into a two-bedroom apartment in Jessie’s sister’s basement in Richmond Hill, hoping to save money for their down payment. For the next few months, they commuted an hour each way to their jobs downtown. In January, they found out Jessie was pregnant—they were glad they’d had the foresight to lock down a large family home.

One day last April, a year and a half before they were supposed to move in, Patrick was reading a discussion thread on BuzzBuzzHome, a website that tracks new housing developments. There was a rumour circulating that Urbancorp was in financial trouble—that the company might be on the verge of filing for bankruptcy protection, which would jeopardize all of its unbuilt projects. “At first, I thought, Oh, it’s just some random thread on the Internet,” Patrick said. “It can’t be true.” But it was, and the full story was worse than they could have imagined.