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Wednesday, January 16, 2008

Condo Conversion Bill

posted by on January 16 at 15:05 PM

In my Oly column this week, I wrote about several worthy bills that are in play this session—bills like expanding health care coverage—that show some Democratic members defying orders to pursue the low-expectations gameplan this session.

However, I failed to include a bill that I just learned today is in play: the condo conversion bill.

The bill, which would give cities the right to limit condo conversions, is getting a hearing in the House this Friday. A companion Senate bill is queued up for a hearing next week.

(A similar idea was stripped out of a condo conversion bill last year to make it more palatable to conservatives. But that bill ultimately failed.)

The bill would give cities authority to require developers to provide adequate relocation assistance to tenants displaced by condominium conversion and also give larger cities and counties in the Puget Sound area the right to restrict the number of low income rental units converted to condominiums occurring annually in their community.

Seattle co-sponsors on the bills are: Reps Sharon Tomiko-Santos, Bob Hasegawa, Phyllis Kenney, Mary Lou Dickerson, and Senators Jeanne Kohl-Wells, Ken Jacobsen, Adam Kline, and Ed Murray.

Low-income housing activist John Fox, who’s lobbying for the bill, makes the case:

Since the early 1980’s to 2004, the number of conversions occurring annually in the five county Puget Sound area (King, Pierce, Snohomish, Kitsap, and Thurston) averaged only about 300-500 units lost per year. Since Jan. 2004, in the five county area, over 16,000 rental units have been converted to condominiums with most occurring in Snohomish (4000) and King Counties (11,000). Seattle alone has seen a loss of over 6000 rental units conversion during that period. Last year we lost 1700 units to conversion, the second highest annual total in city history. Despite an overall slowdown in new housing construction, the problem of conversion shows no signs to date of slowing appreciably. As a result of conversions and given the fact that most new housing construction is in the form of condominium development, King and Snohomish County have actually seen a net decline in their rental housing stock since 2005.

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Question: Are condos which are purchased and then rented by their owners considered rental stock?

Posted by Gitai | January 16, 2008 3:33 PM

San Diego has a similar law, but condo converters get around the relocation assistance clause by announcing that the building will be demolished and condos will be built on the existing property. In truth, the building stands fenced in and boarded up sometimes for years.

The tenants, therefore, aren't notified about a conversion. They're evicted with a 60 day notice. And they don't receive a dime in relocation assistance.

Posted by Bauhaus | January 16, 2008 3:41 PM

I said it when this bill was originally introduced and I'll say it again: The condo conversion craze is over. This is unnecessary feel-good do-nothing legislation.

Posted by happy renter | January 16, 2008 3:43 PM

That condo conversion thing is a day late and a dollar short. With the housing market sliding along with credit markets, many condo constructions are being turned into apartments, and most of the conversions happened in the last three years, very few are happening today.

Posted by Andrew | January 16, 2008 4:02 PM

Now that governments are staring down the barrel of lower fee and tax revenue flowing from their buddies the developers, legislators are starting to feel guilty and stupid over what they've let happen to their renting constituents. Time to hit 'em up for a bill.

And while it's true that only an idiot would convert nowadays, don't think there aren't a few idiot landlords still looking to do it. This bill would protect their renters, and now.

And let's acknowledge the wisdom of getting this on the books now, while we finally can, so that it will be in place if another local real estate craze hits after X years of downturn. If we wait until another boom hits, the revenue flowing in will just get legislators looking the other way once again.

Do it now. If it fails now, do it again next session.

Posted by tomasyalba | January 16, 2008 4:24 PM

Why should any land owner be restricted from making money off of their property! This is pure socialism. People can pay their own damn moving costs!

And if you can't afford to live in the city, then move or get a better job. Sheesh. The government has no business tinkering with the free market in this case. There is no overreaching public interest in denying land owners their rights to do what they please with their property.

Posted by Rich Boswell | January 16, 2008 4:36 PM

Hey, Rich Boswell, I've decided to file a mining claim on your property. I'm paying 10 cents an acre and I'll be looking for diamonds.

Might have to blast my way down there.

Hope you don't mind!

Posted by Will in Seattle | January 16, 2008 4:43 PM

What a fantastically stupid idea.

Hint #1: limiting the supply of condos makes them more expensive, not less.

Hint #2: total housing units are growing faster than local population. WAY faster. therefore, the rental stock is actually *increasing.* (no, the Canadians are not using their still-strong dollar to turn our apartments into vacation homes.)

Hint #3: the housing bubble was caused by excessive lending. if you want to legislate against a repeat of it, treat the disease, not the symptoms.

Posted by Eric Arrr | January 16, 2008 5:02 PM

All the condos are scars on beautiful city blocks.

Seattle should be ashamed at what it has allowed to happen to the metro area.

Posted by Reality Check | January 16, 2008 7:24 PM

Eric Arr, FTW!

Posted by Bellevue Ave | January 16, 2008 10:54 PM

@9: Seattle should be ashamed for letting people build housing?

Posted by J.R. | January 17, 2008 10:56 AM

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