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Thursday, January 17, 2008

Cheap-ish Condos on Capitol Hill?

posted by on January 17 at 12:43 PM

The building at the corner of Pine and Bellevue has been vacant for months, awaiting conversion into condos. (Full disclosure: I have a friend who used to live there; she couldn’t afford what they were asking and moved into a different neighborhood.) But with the imminent crash of the market for conversions, the building’s owner, The Stratford Company, has decided to take a different route; they’re tearing the whole thing down and rebuilding it as small, affordable (the company likes to call them “attainable”) new-construction condos.

In recent years, the Pike-Pine corridor has changed dramatically, as developers have announced plans to demolish affordable housing or convert expensive apartments into even-more-expensive condos. (See: The block that formerly housed the Bus Stop and Kincora; the Press Condos—nee Press Apartments). But there’s reason to feel hopeful about this new development. For one thing, the building it will replace will be no great loss-brown brick apartments perched atop street-level parking, with no retail or other street amenities to speak of. For another, Stratford (which is primarily a condo conversion company) says it wants the new condos to be affordable to people making the Seattle median income, currently around $52,000 a year. According to Stratford sales VP Virginia Grady, the company is aiming for condos that are “low-cost but not low-quality”—around $250,000 for a 400- to 500-square-foot unit. “We’re looking at, how do we design a smaller space thatís highly functional and appealing?” she says.

To that end, the company is doing an online survey to find out what amenities people want and what things they might be able to live without; some cost-saving possibilities include loft-style designs, compact kitchen appliances, small, energy-efficient washer/dryers, no assigned parking spaces, and no air conditioning. As a renter, I’m encouraged to see a developer targeting my demographic—people with decent jobs and no kids who can’t afford the “From $695,000!” crap that’s replacing so many older single-family homes in this area.

RSS icon Comments

1

Thanks for the post. Is this the "Marion" Apartments (inappropriate quotation marks their for many years)?

Sounds like a good approach. I hope they're able to take the suggestions to heart.

Posted by genevieve | January 17, 2008 12:49 PM
2

this will still upset people who can't afford it.

Posted by Bellevue Ave | January 17, 2008 1:27 PM
3

Gosh Erica - if you were actually familiar with the neighborhood you would know that building is on the corner of PINE and Bellevue (not Pike & Bellevue as your leading line says) - which, perhaps, is why the website for the building is www.liveonpine.com (and not www.liveonpike.com) . . .

. . . sigh . . .

Posted by I am your Mother | January 17, 2008 1:31 PM
4

Interesting , but if traditional lending standards were used, i,e, not lending more than 3x income for a mortgage than that affordibility mark should be more like $150,000 for that 400 to 500 square foot unit or at 30 year 6% interest rate would still be 899 a month.. At the $250,000 at that same interest rate would be 1498.88 a month. I just used a mortgage payment calculator at bankrate.com to do the calcs. Those were figured assuming 100 precent financing which is drying up significantly. Of course , thats not counting property taxes and HOA dues.

Posted by Brian in Seattle | January 17, 2008 1:31 PM
5

Where did the averge median income statistics come from? I've googled and received various answers from different sources. Curious.

Posted by Nay | January 17, 2008 1:37 PM
6

And brian shows why people will still be upset; it isn't affordable to some people.

Posted by Bellevue Ave | January 17, 2008 1:40 PM
7

I think this post brings up some good points. Seattle is still very draconian in its parking requirements for single and multifamily housing. Why we have a parking minimum at all is really insane. For tall buildings underground parking can cost upwards of 40-50k per spot, reducing or eliminating the requirements for underground parking will go a far way towards making new construction affordable to more people in Seattle. The kind of people who want to live in a city where they can walk and bike.

Also who needs AC in Seattle. It gets hot here one day a year.

Posted by Dave | January 17, 2008 1:40 PM
8

If you see "From 695,000!" signs, don't worry. A year from now, there'll still be signs there saying "New Price!" anyway.

Posted by tsm | January 17, 2008 1:41 PM
9

Actually, I do know where it is - that was a typo. Jeez.

Posted by ECB | January 17, 2008 1:44 PM
10

Cheap condos in front of a bus stop where you get knocked to the ground for calling 911!!!

Posted by Finishtag | January 17, 2008 1:52 PM
11

Yeah, I just figured I'd run the numbers for some comparisons with rent, etc. Its always fun to do..:)

Posted by Brian in Seattle | January 17, 2008 1:53 PM
12

Dropping the parking requirement would help a lot. Each parking space adds $30,000 or so to the cost of the unit. So, if you don't have a car you are already saving in monthly car costs, but if you are not fored to buy parking with your unit, you save on your mortgage, too. And it helps promote transit, walking and less carbon emissions, too.

There are tons of apt. houses all over Capitol Hill where residents don't have any parking, and those are usually full up. If the developer wants to build or offer parking, fine, but if they are not forced to assign parking to residents the building HOA can rent the spaces to others and make money and reduce the HOA dues.

Millionaires live in tiny sailboat spaces. Lots of people are fine with smaller spaces. So crunching down the kitchen and bath would work, too. A full set of appliances used to work for a family of 5, but now a single person is forced to buy that much kitchen, too. I lived in a tiny group apt. in Paris for 6 months in 1979 using a 2x2 fridge and a bunsen burner stove. Happy to buy food and wine every day, too. Could walk everywhere.

Usually a developer cannot take the time to change all the codes so unless the City Council takes the initiative, the required parking and other aspects of the building codes tend to drive up the price of condos.

Posted by Cleve | January 17, 2008 1:55 PM
13

The kitchens in some of these new condos and apartments are ridiculous. If its a studio that barely fits a double bed, why would you want a full size stove, refridgerator and dishwasher? for all the entertaining you're going to do? At least with all the cabinets, you have plenty of storage for clothes or books.

Posted by anna | January 17, 2008 2:11 PM
14

I guess I'll have to stick with paying 450$ for my 65 Sq. Ft. mini-efficiency. My 9000$ a year in Social Security can't get me even close to EVER owning my own home (not that I'd ever expect it to) Still - it IS nice that they are attempting this, so I'll just count my blessings.

Posted by Colton | January 17, 2008 2:26 PM
15

re parking @7 and 12. The City actually agrees with you, and removed parking requirements in this area a year ago. There is no requirement for them to provide parking on this site. If they're providing parking, the developer's choosing to do it, presumably because they think they can make more money providing it, or because they don't think they can get financing for a building without parking.

Posted by lish | January 17, 2008 2:28 PM
16

anna, I can assure you, i wish i had a dishwasher and full size stove. 1 reason; it would motivate me to cook and clean at home more often, saving me money from going out to eat. a dishwasher saves a good 30-40 minutes a night of doing dishes if you cook all the time and have a small sink. its really a battle to try and do dishes when you work full time and go to school full time; a dishwasher helps.

Posted by Bellevue Ave | January 17, 2008 2:28 PM
17

how does that warrant a full disclosure?

Posted by sam | January 17, 2008 2:46 PM
18

Great research! If the new owner Stratford is sticking to only condos as a business strategy moving forward, they'd better evaluate their bankruptcy options quick.

Suspect in another few months they'll either give in and "repartment" the building, or sell off the project to a national apartment REIT trust.

Posted by tomasyalba | January 17, 2008 2:47 PM
19

@4 gets it.

Posted by Anon | January 17, 2008 3:17 PM
20

$250,000 for 400 sq ft!?!?! that's still pretty crazy, if you ask me. it's not that cheap with condo dues after all. and for what? sure, better than nothing. but affordable at the median income would really be around $200k. and for that, you'd hope to get a little more than 400.

still, cheap[er] small places is a start.

Posted by infrequent | January 17, 2008 3:22 PM
21

Reiterating what 4 said. $250k (although everything in the survey begins at $275k, asking how willing you would be to pay more for the extras) plus HOA fees, taxes, and (probably) mortgage insurance is unaffordable to someone making $52k. Plan on having a roomate/significant other sharing your 400 sq ft condo.

Posted by sano | January 17, 2008 3:29 PM
22

goddamn seattle and their density aversion and their inability or unwillingness to subsidize dense housing developments.

Posted by Bellevue Ave | January 17, 2008 3:36 PM
23

goddamn seattle and their aversion to density, and the unwillingness to subsidize new development on a huge scale. for instance a subsidy that kicks in on every unit built beyond a certain amount would be good.

for every unit in the building beyond 300, you get a subsidy to build that apartment. the subsidy would be paid for by a small increase on multi unit property taxes already in existence(this will increase the rent in existing apartments but might be offset somewhat by an increase in units built), and through a small increase in sales tax on elastic goods such as clothing.

Posted by Bellevue Ave | January 17, 2008 3:46 PM
24

goddamn seattle and their aversion to density, and the unwillingness to subsidize new development on a huge scale. for instance a subsidy that kicks in on every unit built beyond a certain amount would be good.

for every unit in the building beyond 300, you get a subsidy to build that apartment. the subsidy would be paid for by a small increase on multi unit property taxes already in existence(this will increase the rent in existing apartments but might be offset somewhat by an increase in units built), and through a small increase in sales tax on inelastic goods such as food

Posted by Bellevue Ave | January 17, 2008 3:48 PM
25

damnit, ignore 23. when i thought about it ,taxing inelastic goods might be a little regressive, but taxing elastic goods would cause more dead weight loss.

Posted by Bellevue Ave | January 17, 2008 3:57 PM
26

[Inserted solely to break Bellevue's long chain of comment revisions]

Posted by saggyelasticwaistband | January 17, 2008 4:08 PM
27

we need to impose a ban on comment conversions.

Posted by infrequent | January 17, 2008 4:17 PM
28

Hi, I have a request to the people of the earth.

Could the fucking-rich people please stop trying to decide how much money the average person can afford to give them?

Thanks!

$250K at 7% over 30 years is a monthly payment of $1660, which totals $20K/year. The average person makes $52K/yr gross? That's 38% of income spent on housing. Take out the amount they'll pay in income taxes -- about $9500 -- leaving them with $42.5, making that $20K/yr account for 47% of take home pay.

Is that really what qualifies as "affordable"? For 400 square feet?

Posted by K | January 17, 2008 5:03 PM
29

Or we could just build 40-100 story inexpensive residential rental apartments and mandate external greenspace/playgrounds that are open to the sidewalk (e.g. no fence allowed) like Vancouver does (ok, so I encourage 100-story, but the reality is we need to think of the future).

Posted by Will in Seattle | January 17, 2008 5:15 PM
30

Building affordable condos is like constructing energy efficient parking garages.

Posted by Mr. T | January 17, 2008 10:46 PM

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