An eight-inch start to real estate riches

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A most unusual parcel of land for sale on a busy Toronto avenue is putting to the test the question of whether land has intrinsic value, regardless of its utility.

For sale is 1060 Danforth Ave., an address sandwiched between a church and a medical office about a half-block away from the Donlands subway station. Listed for $49,999, the price is a relative bargain for the Danforth, given the rapid rise in land prices in Toronto. But there is a catch: It is105 feet deep – but less than a foot wide.

“We didn’t list it as a joke,” said Anthony De Cesare of Royal LePage Maximum Realty. “I thought someone would want it.”

Mr. De Cesare met his client, Carlo Scarcello, at the corner store and deli in Woodbridge that Mr. Scarcello runs (he recommends the prosciutto and provolone sandwich) and agreed to help sell his house. But Mr. Scarcello also asked Mr. De Cesare to look into selling this little chunk of Danforth that he also owned. “I put it on MLS and I got so many calls from people,” he said, at least until they found out how wide it was.

Property records help fill in some details about how the strip of land came to be: In 1975, Ruby Gilbert was executing the last will and testament of her late father, Charles Gilbert, who had transferred to his estate a strip of the parcel that is a little more than eight inches wide at the southern half of the property, and then widens a bit as it travels the 105 feet to its northern boundary to a princely 15½ inches. The land extends partway under the wall of the building at 1066 Danforth Ave. (a pharmacy and medical centre), and allows for the shared use of it, such as it is. In 1977, Ms. Gilbert granted the land to her friend Gordon Davidson for $2.00, with the following explanation: “The land has very little value, and as the grantor has no use for it and is a good friend of the grantee, she wishes to transfer the land to the grantee for nominal consideration.”

The records show that 30 years later, Mr. Davidson fell into property tax arrears (the annual property tax bill is about $69 now) and the property was auctioned off by the city and was purchased by Mr. Scarcello in 2013 for $5,065.

“You know what, at this price, I couldn’t afford to resist it,” Mr. Scarcello said. “I always had issues with money my whole life, but I wanted to build myself up to not be always struggling. To me, it was like my chance to buy a piece of land. I figured only land would help me build myself up.”

In a way, the fact of land ownership was more valuable to Mr. Scarcello than any practical use of that land. “Land is about the only thing that can’t fly away. … It gives position and influence and political power,” or at least that’s the view of the landed gentry in Victorian-era England as imagined by Anthony Trollope’s 1867 novel The Last Chronicle of Barset.

“My friends had a lot of laughs with it,” Mr. Scarcello said. “I tell them I own a piece of land; they joke you have to turn sideways to get on it!”

Mr. Scacello said he’s had many ideas of what to do with the sliver of land, everything from planting sunflowers (a passion of his) to maybe renting it out for a billboard. “I was thinking of putting a mailbox on there, maybe anybody overseas could want a Canadian address.” Other than waging a futile battle to keep it graffiti-free he has never managed to improve the land.

On the other hand, it’s possible he could earn a return just by virtue of the passage of time.

According to real estate data experts Altus Group, the cost of residential development land in Toronto has soared 567 per cent since the year 2000. According to Ray Wong, vice-pPresident of Data Operations at Altus Group, the year-to-year data are a little lumpy because the price per acre tends to ebb and flow based on what kind of land sells, but the trend is still way up. Consider that even just in 2010 the price per acre of development land in Toronto was $2.4-million and it is topping $6.9-million an acre in 2021. One factor driving prices recently is scarcity: There are fewer sites and smaller ones hitting the market in the past two years. Between the third quarter of 2020 and the third quarter of 2021, Mr. Wong said development land prices more than doubled. “I was a little bit taken aback by the increases,” he said. “I’m not surprised, but I was little taken aback. That’s better than the stock market!”

Mr. De Cesare hopes someone might purchase this slice of Toronto in order to do a new development. There’s a mid-rise condo project under way just a few addresses west, so it is not entirely impossible. But anyone hoping to squat on the land should be prepared to wait for a payoff, according to experts.

“If you look at land, everything’s been inflated, [Mr. Scarcello’s price is] not out of whack, but it could be sitting there for a long time,” said Ari Silverberg, president of Harbour Equity. Mr. Silverberg does land assembly acquisitions to create developable lands in the GTA, and he’s not sure Mr. Scarcello will get many multiples (let alone 10 times) on his original purchase of such a narrow strip of land. “I truthfully haven’t run into that before; $5,000-$10,000 sounds like the right number. I don’t know that someone bucks up and pays $50,000. If they really wanted to make money, get the two guys beside them together and package it. At that point, paying an extra $50,000 or $100,000 probably doesn’t matter.”

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