Boom Is Seattle’s Building Boom Over?
posted by January 17 at 8:08 AMon
The national housing market is tanking. Seattle’s housing market – a year or so behind the national market – is circling the same drain for the same reasons. That’s the thinking.
With this in mind, I expected to see fewer proposals for new developments filed with the Department of Planning and Development in the first couple weeks of the New Year than in 2007. But that’s not happening. Instead, eight proposals for major mixed-use and residential projects were announced just in the past two weeks; only six were filed by this time last year. There are lots other notices filed for projects getting started in the next six weeks. Developers clearly believe Seattle housing will still be in high demand when their projects are finished in a couple years. That or they’re nuts.
Take veteran developer Michael Mastro. He’s the man behind Mastro Properties, a firm revered for its impeccable investment timing. “There’s a lot of crying and weeping about foreclosures, but that might be expected given the exuberance with which lenders were financing,” he tells me in a paced, gravelly voice. “Greater Seattle has a migration number that exceeds many areas of the country. They’re not coming here for the rain but for the jobs, I can assume.”
About a year ago he bought a parcel on First Hill, at 504 Terry Ave, across the street from the unfinished Harborview expansion, and he recently proposed his intentions for the lot: Harbor Vista, a 26-story residential tower, containing 350 apartments and 9,000 square feet of ground-floor retail, with parking for only 200 cars. Currently on the site is the San Juan Apartments.
Renter Jeff Gordon heard in October he would have to move. Gordon just moved to the San Juan Apartments a year and half ago, after living in a building on 15th Ave E and E John St, which was demolished to make way for another development. He wants to live on Capitol Hill but says he can’t afford it on his construction wages. “I’ll probably move to the south end,” Gordon says.
But I don’t think Gordon will have to live in the south end – at least, not for long – or that Mastro is nuts. The profit margin on large-scale residential developments is enough that housing prices can drop and developers can still make a killing. And as long as demand to live in the urban core remains high among people like Gordon, the developers will supply what they demand: apartments. While the new rentals won’t necessarily be cheap, adding them to the market will keep costs down for everyone.