Tenants in a bind when their apartments turn condo
Seattle Times staff reporter
Heidi Reynolds moved into a $950 apartment in Seattle's Chinatown International District early this year and fell in love with her new home — she had her own washer and dryer, a diverse mix of neighbors, nearby restaurants and she was close to downtown.
Four months later, Reynolds' apartment building was in the process of being converted to condominiums.
"It was just a horrible place to be, with constant noise, construction and hordes of prospective buyers traipsing through," said Reynolds, 32, a legal assistant at a Belltown law firm.
Reynolds isn't alone in feeling the sting of Seattle's condo-conversion craze. In the first six months of this year, 1,162 Seattle apartments have become condos or are headed for conversion, a pace that would far exceed last year's total of 1,551 conversions.
The trend is happening outside Seattle, as well. Last year saw about 4,000 units converted to condos in the Puget Sound area, according to Dupre+Scott Apartment Advisors. Those conversions resulted in a net loss of apartments because they exceeded the number of new rental units built.
Some renters caught in the conversion process say they're experiencing a lack of privacy, loss of community and unexpected moving expenses. They face higher rents as the region's supply of apartments shrinks, according to Dupre+Scott. Real-estate consultants and developers don't see the conversion trend slowing soon.
City officials and housing advocates are trying to figure out what steps, if any, the city should take to help renters.
They see no obvious patterns to the 3,143 conversions in Seattle since 2004. They're occurring in new buildings and old ones, big and small: in Fremont, where Jerome Whitmore was forced out of an apartment he lived in for 25 years; in Greenwood, where Annabeth Jamieson Weldon was displaced after a few months in a new apartment, causing her to move into her clothing-design studio in Queen Anne; and in Columbia City, where Eboni Colbert is concerned many longtime neighbors will be displaced by condo conversions.
The city now requires building owners to pay displaced low-income renters $500 for moving expenses. Tenants also must receive 90 days' notice before they're evicted, and landlords must honor leases until they expire. Any remodeling can't start before 7 a.m. and can't continue past 10 p.m. on weekdays.
"It's really hard on tenants. The most serious problem is just the economic strain that moving puts on individuals and families. City studies show it costs about $2,000 to move," said Siobhan Ring, executive director of the Tenants Union of Washington.
Some cities do more for renters. San Francisco allows only 200 conversions a year. San Diego requires converted buildings to have units set aside for households earning less than median income. The mayor of Somerville, Mass., a Boston suburb, recently proposed that landlords give elderly residents four years' notice before turning an apartment into a condo.
John Fox, coordinator of the Seattle Displacement Coalition, a group of low-income-housing advocates, said the city's response to conversions has been weak. Fox recalls a similar condo surge in the late 1970s that led then-Mayor Charles Royer to impose a temporary moratorium on conversions. Fox said city officials should consider another moratorium.
"It should be a subject of grave concern, but we're sitting on our hands, by and large," he said.
Others, such as Ring and Adrienne Quinn, the city's housing director, say more information would be helpful before Seattle acts. It's not clear, they say, how many low-income renters are losing apartments to conversions. And, on the positive side, they say conversions are increasing home-ownership opportunities, particularly in the $250,000 range.
"It isn't peachy and good. But it's more complicated than it usually looks," Ring said. "One of the things I don't know, and I'd like to know, is who exactly is being affected by condo conversion."
City Councilman Tom Rasmussen wants the same answers, so he's created a committee that he hopes will provide recommendations about Seattle's apartment market to the City Council.
"For the most part, the people I hear from are not able to buy their units, and we don't want people to have to leave the city," he said.
The bottom line, according to real-estate experts and developers, is that conversions are being driven by Seattle's job growth and hot housing market, which has shown a strong appetite for condos, making it lucrative for apartment building owners to sell.
Land-use consultant Matthew Gardner predicts the conversion trend will continue for 18 to 24 months until thousands of new condos already under way are built. At that point, the condo supply may start to satisfy demand and apartment owners will enjoy lower vacancy rates and higher rents, which means some developers will build apartments instead of condos.
"The market makes it very financially enticing to sell an apartment building ... because you can make a higher profit selling than renting if [the building] is a good candidate for conversion," said Jack Hawes, who is managing 200 conversions in Seattle for Equity Residential, a Chicago-based firm that owns 200,000 apartment units around the country.
Converting apartments is also easier and cheaper than building new condos, Hawes said. Before a building is converted, city inspectors must confirm it's in good shape and doesn't leak. Beyond that, any building that meets city safety codes for apartments is suitable for condos, he said.
Hawes doubts that many low-income renters are being displaced. Owners who receive federal subsidies or tax credits to provide affordable housing aren't allowed to convert their buildings. And many buildings that charge lower rents are too old and worn, or poorly located, to be ripe for conversion, he said.
In the end, Reynolds' conversion story took a positive turn. Being displaced led her to buy a 550-square-foot condo in West Seattle for $212,500. In the meantime, she was told her former unit was being sold for at least $254,000.
Still, she said the last three months in her apartment were a "nightmare." She'd like to see city officials provide more financial aid to renters and require developers to give them more than 90 days' notice before conversions.
"I'm stunned and amazed I got it together and bought a place," she said. "But I know a lot of people in similar situations who wouldn't be able to do it."
Bob Young: 206-464-2174 or email@example.com.
Seattle Times researcher David Turim contributed to this report.
Copyright © 2006 The Seattle Times Company