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Boom Can’t Afford a Seattle Condo?

Posted by on April 13 at 9:07 AM

This is yet another sign of how expensive it’s becoming to own a house or condo in Seattle, and perhaps it’s also a sign of how salaries in this city aren’t keeping up with the cost of living here. But it’s a good development for a few lucky home buyers:

If you’re single and you make less than 80 percent of King County’s median income (which means you make less than $41,700 per year), then you now qualify for help from this home-buying assistance program.

What would that help look like? A grant of up to $110,000 that doesn’t need to be repaid.

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1

what about people who make 42k & can't afford a condo?

you're screwn.

2

Or 52K?

3

@1, 2 No matter where you put the limit, there'll be people right on the cusp.
This sounds great. I gotta admit I'm slightly skeptical, though. Where's the money coming from? How will this affect the market (thinking artificially inflated prices will not come down)? I'm all for making homes more affordable for the regular Seattleite, just not sure if this is a good long-term solution or a patch that will just perpetuate the problem.

4

Did condo prices just jump by 100K?

5

it is not the American Dream of home ownership as a route to the middle class -- it's really a rental -- you have to sign an agreement saying when you sell you will not get the capital gain (either you give it back to the nonprofit or you agree to sell below market rate to help someone else)

6

I love Homestead - I wish I had known about them when I was a first time home buyer. One of the best things about them IMO (and something that makes me surprised to see a plug from the Stranger) is that, with houses, they own the land, you own the house, so the house being purchased can never be sold to a developer. With condos, they obviously don't own the land, but they do require right of first refusal for others in the same position. So it's a great program for first time-buyers, and since the grant doesn't have to be repaid there is oportunity for significant gain on a sale, but it's not designed for investors. I think it's great they're including condos now!

7

what a complete waste. why not just help middle class people by biotechnology stocks while we're at it? this doesn't preserve affordable housing. it's a one-time cash investment in which the government receives no share in the profit from increasing housing prices, and in which the home buyer can turn around and contribute to the very problem the government is supposedly trying to solve. it would be a scandal if the very notion of public interest hadn't been so perverted by Reagan and the state-subsidized deregulation bonanza he kicked off 25 years ago.

8

That is bullshit. Seattle is mostly middle class. You're going to take from the middle class and give to the middle class.

Programs like this are bullshit because they're a fucking lottery.

9

Ha ha ha!

1. Give low-income home buyers a $110k subsidy.
2. Low-end home prices increase accordingly.

Way to go, Seattle! Pouring tax dollars into the low-end housing market by way of low-income homebuyers is TOTALLY gonna not increase home prices even further!

10

Oh, great, so now I only need to come up with $150K that I don't have if I want a condo.

...

11

You don't have an inalienable right to live within the city limits of Seattle, to whatever standard of luxury you feel entitled. Living in a great city with lots of things to do and low crime is a privilege, and it's the way of the world that it's easier for rich people to exercise that privilege than others. Still, people forced to rent or, gasp, move to Burien is hardly the greatest injustice that government has on its plate.

Government has an interest in keeping the city vibrant and economically diverse by having *some* public housing, but that doesn't mean that everyone ought to be able to afford to live in the city, much less own here. After all, in-city housing, especially single-family housing, is a more-or-less finite resource, and not everyone can be entitled to their "fair share."

If you want to get on the property ladder as a path to the middle class, pick an outlying or economically improving area, which may or may not be in the city. As the city densifies, real estate prices will converge and you'll be able to move closer in.

If you want to give as many people as possible the opportunity to live in the city, support densification without reservation. It means getting in bed with icky developers, but it's the most effective way to generate lots of units.

12

Chris@8: so, what's good enough for sports teams isn't good enough for the middle class?

13

hmm governments make markets....by building infrastructure and roads and canals and wharves and stuff like that

if we had mass transit to connect Burien and Renton and Kenmore with Seattle, it would all be one housing market you would not need to afford seattle to enjoy seattle's jobs, schools, bands, bars, etc.
and the price premium that is building up in seatle (center city location = freedom from 1.5 hour commutes) would be mitigated somewhat....

14

adam @5, I agree. This sounds like a good deal, but it is not.

If you accept the grant, you give up substantial future value. If you sell at some future date, you have to sell at substantially below market rates.

So if you are thinking of buying an inexpensive condo as a starter, with the intent of buying something nicer in a few years after you've built up some equity, forget it.

The only type of people this might help are people who are not likely to ever see any significant increase in their income, and who plan to buy a condo and live there the rest of their life.

Most people aren't like that, though. Your job changes, or you get married (or domestic partnered or whatever), or divorced, or some developer builds a giant condo next door that blots out the sun, or your mother gets sick and you decide to move back to Denver, or you have a baby and need more room, or you retire and decide to move to Arizona to be closer to your kids, or your employer decides to transfer you to Chicago, or any number of a hundred other reasons, and you want or need to move.

Statistically, homeowners move every 7 years (this is people who OWN their home, not renters). With the grant, you give up any equity built up in the condo/house you buy.

It is no better than renting.

15

Hey, haven't you heard? Owning a home is now officially a bigger money waste than renting!

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