Condominiums are part of the mix in urban housing. They provide options for first-time homebuyers who can't afford a detached dwelling, empty nesters ready to downscale and busy single professionals with no time for home maintenance.
However, when condos are created by converting existing apartment buildings into units for sale, tenants are displaced with 90 days notice and $500 in relocation assistance, hardly enough time or money to find a new home in Seattle's tight rental market.
While condos can be a boon to people making 80 percent of the area median income or more (median income is $52,010 for a single person, $74,300 for a family of four), there is no shortage of condos available for them. It's those making less than 60 percent of median income who are most likely to lose their homes due to condo conversions.
Here's s typical scenario: A developer buys an apartment building for $150,000 a unit, holds onto the building for a year or so while raising rents to cover loan payments, then makes some superficial improvements, kicks out the tenants (many of whom are longtime elderly residents on fixed incomes), and sells the units to buyers for over $250,000 (the median price of one-bedroom condos converted since 2004). The elderly are particularly vulnerable because they tend to be concentrated in the city center where most of the condo conversions are happening.
Although the rate of condo conversions has slowed in other cities, in Seattle the tide is still rising: 430 in 2004; 1,551 in 2005 and 2,352 last year.
When you combine these losses with about 1,000 units of low-income housing lost in the last two years to demolition and another 2,000 or so lost to speculative sale - where the new owner jacks prices above low-income levels - it translates directly into more homelessness and longer waiting lists for public housing and Section 8 vouchers. It also means more low-income people are forced to leave Seattle altogether.
We spend $10 to $15 million to produce 300 to 500 new subsidized units each year in Seattle. But it's shoveling sand against the tide when a handful of developers can wipe out several times that amount of low-income units each year in this city.
In response to the rising tide of condo conversions, state senators Ed Murray, Ken Jacobsen and Adam Kline have proposed SB 5031 which would increase tenant notification to 120 days and lift the lid of $500 on relocation assistance to allow local jurisdictions to set higher amounts, up to as much as $2,000.
But before we build an expensive plant to treat the water pollution downstream, why not keep the pigs out of the water upstream?
Other cities limit condo conversions. For example, San Francisco only allows 200 a year. San Diego requires developers that convert condos to set aside a percentage of units for low-income households. In Washington, D.C., a majority of tenants in buildings offering rentals at or below 80 percent of median must first give their approval to any proposed conversion.
Legal steps
Here's what we can do to halt the rising tide of condo conversions and ensure affordable rental units for all income levels in Seattle.
At the state level:
* Amend the state condominium conversion law to enable cities to limit the number of conversions each year, and allow cities broader discretion to try solutions like those cited above that work for cities in other states.
* Amend state law to give cities broader discretion to require developers to replace housing they tear down at comparable price.
* Re-establish the right of cities to implement rent control at their discretion.
* Amend housing authority legislation to require Seattle Housing Authority to guarantee one-for-one replacement of any housing it removes, and replace it on-site at its larger sites like Yesler Terrace.
An the city level:
* Alter the multi-family tax abatement program so that to earn the tax breaks, developers must replace low-income units one-for-one on site. Also amend the program to encourage more very low-income units and withhold tax breaks on units priced above the average rent in that part of the city.
* Pass a right of first refusal law that would: 1) Require owners of apartment buildings above a certain number of units to notify non-profit housing developers, Seattle Housing Authority and the city prior to sale. The notification period would give these agencies time to make an offer or match a market offer. 2) Create a board to recommend use of the city's condemnation powers - in cooperation with SHA -to acquire key low-income apartment buildings vulnerable to speculative sale, demolition or conversion.
* Deny the use of bonuses or other incentives for developers unless there is one-for-one replacement of low-income units at a comparable price or payment of an in-lieu of fee.
Our elected officials can do more than show compassion for the casualties of our rampant housing market. They can actually prevent some of those casualties in the first place.
John V. Fox and Carolee Colter of the Seattle Displacement Coalition may be reached at editor@capitolhilltimes.com.
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