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Wednesday, April 2, 2014

Battle Between Vulnerable Tenants and Goodman Real Estate Gets To the Heart of What Kind of City Seattle Wants To Be

Posted by on Wed, Apr 2, 2014 at 4:11 PM

  • AH
  • Lockhaven tenants hold a protest against Goodman Real Estate last month.
There's something deeply wrong with our city when even a local real estate developer, locked in a bruising fight with low income tenants who accuse it of unethically displacing them, is calling for stronger provisions in the law to protect tenants and preserve affordable housing.

Here's what's going on: The Lockhaven Apartments in Ballard have long been an affordable anomaly in city where rents have increased more over the past year than anywhere else in the country. Tenants paid between $650-$1,050 a month for their Lockhaven units, according to a survey by the Lockhaven Tenants Union, until suddenly, after the sale of the building, it was announced that rents would be hiked to $1,700-$1,900.

And Seattle-based Goodman Real Estate—which purchased and is renovating the Lockhaven apartments—admits it fucked up by sending 22 residents eviction notices last fall without informing them of their right to Tenant Relocation Assistance. Under state and city laws, low income renters—those making 50% of area median income or below, or roughly $31,000 per year or less—can apply for about $3000 in assistance to transition to new housing, the cost of which is split between the developer and the city.

"At my income level, there’s not a lot of housing out there," says Michelle Kinnucan, a single, middle-aged veteran reliant on disability insurance for her income, who's lived at the Lockhaven for five years. "I’m not John Goodman. I can’t throw down $100k and pick up a condo somewhere." Goodman, the tenants point out, has grown fabulously wealthy from the real estate business he founded, even amassing a stunning vintage car collection.

Kinnucan has refrained from speaking to the media for the past month, letting her neighbors take the lead in the newly-formed Lockhaven Tenants Union. The union's been calling on Goodman to preserve affordable units or lease them to a nonprofit like the Low-Income Housing Institute (LIHI), which has expressed interest in such a deal. But Goodman responded flatly to LIHI that its purchasing agreement prevents it from doing that.

LIHI's Sharon Lee says she was disappointed by that response. Goodman "can be creative and look at different options," she says. The company has plenty of financial largess and "even if it’s too late at Lockhaven," Goodman could pledge to work with a nonprofit like LIHI to create additional affordable housing in Ballard.

Now Kinnucan, the renter, is so pissed off that she's talking to reporters. Last week she received a letter, which she showed me, moving her eviction date up from October 2014 to next this month—a six month speed-up that's incronguous with promises by Goodman in previous letters to consult with tenants and not fuck up any more. She believes Goodman is deliberately trying to break up the tenants union by moving them out faster.

That's probably not the case. Goodman says she's the only one left in her half of the building and they always warned the eviction schedule could change. "But even if retaliation has nothing to do with it, it’s still wrong," Kinnucan says. "I would have been on the waiting lists for housing months ago if I’d known Goodman would just lop off six months from my moving schedule on such short notice."

But the real estate developer could have already kicked Kinnucan and her fellow tenants out. "Once we receive our City of Seattle relocation license, we could ask everyone in the building to relocate within 20 days," says Josh Obendorf, Goodman Real Estate's asset manager.

"We don’t think that’s fair," Obendorf says. "Instead, we’ve phased move-out slowly over a long timeline, giving residents more time to prepare." The company's also hired a relocation specialist to work one-on-one with tenants, something it says more developers ought to do.

The reality is Seattle is a harsh place if you're a low income tenant and the Lockhaven tenants are lucky they haven't already been run out of their apartments by a more rapacious developer. As a local company, "we have an interest in going the extra mile," Obendorf tells me. "But with more and more national institutional money coming into Seattle, other developers probably won’t see it that way."

There's more the city can do to help renters, he says, and even offers a few ideas—too bad they miss the mark. The city should revisit relocation assistance policies and increase the income threshold "so more folks qualify for financial assistance." Except this is something Seattle cannot do on its own, by law, and an effort by State Senator Jeanne Kohl-Welles, who represents the Ballard area, to make these reforms at the state level went nowhere in the last legislative session.

The city should expand the multi-family tax exemption (MFTE), Obendorf also says, so that developers are required to build in affordable units on existing buildings undergoing renovation, like the Lockhaven, not just new construction. But Lee, from LIHI, says this would hurt more than it would help. If you offered developers the right to use MFTE, she explains, it would incentivize them to buy up existing housing and convert the minimum-required 20 percent into affordable units, then jack up rents on the rest.

At the end of the day, Goodman Real Estate inhabits a world of zillion dollar companies—the company's promo video boasts of "harvesting the gains" from flipping "distressed" properties and earning returns of 68% or more—that treats housing like a commodity, not a basic right. It's a far cry from the modest lives led by people like Michelle Kinnucan and her neighbors. But even Goodman is recognizing, in this age of extreme wealth inequality, that renters are at the unforgiving mercy of developers. Without any policy fixes on the immediate horizon, it's going to be up to the company to lead by example and collaborate yet more closely with tenants and nonprofits to find an equitable solution, if that's truly what it wants.

"The business community calls the shots," Kinnucan says, citing messages of support her tenants union has received from Senator Kohl-Welles and Seattle City Council members Mike O'Brien, Nick Licata, and Kshama Sawant. "This is just more evidence that they’re powerless to stop development in Seattle that keeps destroying affordable housing."


Comments (19) RSS

Oldest First Unregistered On Registered On Add a comment
One wonders where State Representatives Tarleton and Carlyle are on this issue. If they haven't already, they need to speak up in support of their constituents, the low income residents of Lock Haven.
Posted by nwcitizen on April 2, 2014 at 5:12 PM · Report this
Land property in this country is messed up. We need a reset of some sort. Giving credit perhaps to companies which have actually invested in building/rebuilding, but not to companies that just purchase properties and flip them.
Posted by Hanoumatoi on April 2, 2014 at 5:37 PM · Report this
Then maybe the city needs to get to work buying up abandoned/unused property on major transit routes like Aurora and MLK and start putting up apartments to drive up inventory and reduce rents. Apparently 15,000 new units a year is not solving that problem.
Posted by jeffinfremont on April 2, 2014 at 6:16 PM · Report this
Putting the responsibility on land developers to care about low income renters is a joke. If you want an affordable housing solution, you have to look towards the government public. It's simply not profitable to build a low income / affordable building. So why would they do it? Like #3 said, if the city really wanted to fix this they'd get in the game and start developing the transit corridors with non-luxury, non-parking, non-amenity buildings. OH, and "I would have been on the waiting lists for housing months ago..." - GIRL, you should have been on that waiting list the day you got the first notice. That's on you.
Posted by dry dock on April 2, 2014 at 6:44 PM · Report this
Yet another case where I feel that most painted themselves into their own corners.

You asked for density.

You wanted everyone in the same few square miles.

You now suffer.

My Seattle was destroyed long ago.

Now it's Your Turn.
Posted by Supreme Ruler Of The Universe http://_ on April 2, 2014 at 7:35 PM · Report this
Maybe people who can't afford Seattle rents should move to where the affordable housing is?
Posted by Ken Mehlman on April 2, 2014 at 8:01 PM · Report this
keshmeshi 8

Welcome to "luxury" housing in Seattle.
Posted by keshmeshi on April 2, 2014 at 8:34 PM · Report this
So they were doing substantial renovation to the apartments ?…
Tenant Relocation Assistance Ordinance
See also: Tenant Relocation
What Is It?

Our Tenant Relocation Assistance Ordinance requires developers to pay relocation assistance to low-income tenants that must move because their rental will:

Be torn down or undergo substantial renovation
Have its use changed (for example, from apartment to a commercial use or a nursing home)
Have certain use restrictions removed (for example a property is no longer required to rent only to low-income tenants under a federal program)

As a property or developer, you must get a Tenant Relocation License if your project meets the criteria listed above. The license covers all tenants in your building. Only your low-income tenants receive relocation assistance of $3,002.00. (Ask us for the income thresholds for relocation assistance eligibility.) You pay half of that amount and the City of Seattle pays the other half.

We will not issue a master use, construction, or change of use permit for a property where tenants will be required to move until a Tenant Relocation License is issued.
Posted by ChefJoe on April 2, 2014 at 9:36 PM · Report this
Princess 10
I'm so sick of this attitude " Well, maybe if you're poor you should move." Where? Even outside the city rents are way up and then, you factor in transportation. Many buses don't run reliably. How are we working class people supposed to get to work if we live outside of the city?
Posted by Princess on April 3, 2014 at 9:57 AM · Report this
south downtown 11
What kind of city will Seattle be? Those people should move into micro-housing and suck it up.

'cause that's the kind of city apparently The Stranger wants...
Posted by south downtown on April 3, 2014 at 10:12 AM · Report this
Density is created by a bunch of people, near and far, eager (and financially able) to move into the city and its adjacent neighborhoods. The government(s) should do a whole lot more to incentivize/subsidize modest income housing opportunities, but we are cramming ourselves into this urban box, and it's not, as other suggest, some sort of government-through-policy conspiracy. Growth will happen until Seattle becomes an undesirable city, so deal.
Posted by shotsix on April 3, 2014 at 11:03 AM · Report this
I've begun actively discouraging people in other parts of the country to not consider relocating to Seattle under any circumstances and am already plotting my own escape.

Seattle has rapidly become one of the mot unpleasant cities to live in in the US, and it has crummy weather most of the time to boot (no California sunshine or NYC cultural riches justifications for it being so overpriced).

Really, any out-of-towners reading The Stranger and thinking about moving here. Think twice. Then think three times. Then consider going somewhere else. Unless your dreams at night consist solely of working in IT at Amazon, moving here is pointless and you'll be mighty sorry if you do.
Posted by Purrl on April 3, 2014 at 1:27 PM · Report this
I lived at Lockhaven for eleven years, between 2003 and last December. A few thoughts:

1. Earl Ecklund, the previous owner, made a strong personal effort to be good to his tenants, in addition to a firm conviction that people should not be forced into poverty and then be driven out for that same condition. And was able to make it part of his living.

Main difference between former and present owner is that one is a person- and to a permanent residence in Hell with a Supreme court that doesn't see any difference. Seattle needs an ordinance that except for member-owned cooperatives, only humans can own residential property.

2. During the worst Depression in eighty years- largely caused by treating houses as sources of extremely fast means for already rich corporations to feed their wallets with the speed of a hog dealing with a trough- thing most needed by the general population is decently-paid work.

Too bad the President and congress of the Great Depression can't be re-elected to deal with the current Miserable Stinking one. Maybe then there would be Federal money to build the homes people need at a price they can afford. And offer work so people can afford them. And put some sharp, poisonous teeth into laws against hiring discrimination against applicants over 50.

3. "Affordability" means more than cheaper everything at similar- quality price. It also means that most people earn enough money by their own efforts to buy generally good-quality things. This part of the country has a history of strong labor organization. Would be good if corporations had the old choice of dealing with labor willing to negotiate- or face the Industrial Workers of the World.

4. "Density" doesn't mean "tenements"- and this something the Seattle City Council can decide without help or interference from my current place of residence near a dome. Suggest council and everybody else visit the "Cottage" complexes on Whidbey Island and across Greenwood from the community college.

Lovelier and more beautiful places to live than anything in Medina. No prejudice, you name the suburb and the development. And on return from the visit, as one five-minute agenda item, remove the ordinances forbidding them. Shame on Seattle for having them.

I was lucky enough to move quickly into an apartment much nicer and more decently managed than the one I left at 3038 NW Market. But part of my own "plan" is either to return to Seattle when I can do something to fix it- or help make Seattle part of a region that can help provide Seattle with everything positive above.

Not least a regional transit system that can connect the two cities in less than two very slow hours.

Mark Dublin
Posted by Mark Dublin on April 3, 2014 at 5:20 PM · Report this
Let us hear from the business representatives on the Committee to End Homelessness in King County: Dan Brettler from Car Toys, and Blake Nordstrom. The business community is quick to gripe about the mess they've helped to create. We need to hear from the rest of the business community on this topic.
Posted by dewey1971 on April 4, 2014 at 2:24 PM · Report this
chaseacross 17
The exclamations of the anti-density folks is astounding. It is exactly the lack of density that makes it possible to charge 100% more for modestly renovated apartments.seattlw needs to get to the point where finding a studio for under $1,000 isn't manna from heaven. The only way to bring that about is to build, build, build.
Posted by chaseacross on April 5, 2014 at 10:45 PM · Report this
@15 - because someone throws a few dollars in order to "look good" at any community organization belies their true motive. This is a person who is making money by displacing people who cannot afford to live anywhere else and still be able to access their jobs, their grocery stores, their communities that they've been a part of for sometimes 20 years. He's in active talks to take over another community in Ravenna where severely disabled people will be displaced. The fact that he gives money to a high school that is more affluent than many others in this city doesn't mean that he walks on water or that he's a particularly "nice guy".

Let's be real. I've already been displaced from Seattle, and I have a high degree of education with low job prospects, but I engage with my community and I contribute in ways that others do not because I care about them. Increasing the cost of rent to drive more individuals with more money into the city not only negatively effects poor people, it affects those of us squeaking by, and effects those who are not just squeaking by. Do you want to live surrounded by young snotty yuppies with more money than God and tall reflective condos? I don't. I want vibrant communities where every member of society is cherished for their contributions and neighbors care about each others' well being just like the tenants at Lockhaven do. This is an excellent example of what a REAL COMMUNITY looks like, and it will be a sad day when Seattle allows capitalism to destroy that. These tenants are rock stars!

Posted by madsci89 on April 5, 2014 at 10:52 PM · Report this
@17. Unregulated development leads to Detroit. Baltimore. Indianapolis. Pittsburgh. Philadelphia. New York, with millions of vacant buildings that become hazards to the environment and to the remaining inhabitants. Build, build, build and Amazon and other big business goes away? This place will be an ugly ghost town. Lessons to be learned do not include over-development and the hope that people will come. City planners need to be mindful of the life-cycle of an American city and plan not only for expansion but also contraction, because within the next 10 years a new shiny city will call it's siren call, and Seattle will empty faster than you can blink.
Posted by madsci89 on April 5, 2014 at 11:03 PM · Report this
"At my income level, there’s not a lot of housing out there," says Michelle Kinnucan, a single, middle-aged veteran reliant on disability insurance for her income, who's lived at the Lockhaven for five years.
I am a North King county landlord - I call BS on that. I stay abreast of rents north of Seattle: PLENTY of one-bedroom units in the $700-$900 range, similar to what is being charged. Being on disability, that means Michelle doesn't WORK - and thus doesn't have to worry about close proximity to a work location; that and the fact she doesn't mention kids, and thus no school district issues, she's got more flexibility than most. What Ms. Kinnucan really means is this:

"At my income level, there's not a lot of housing out there in the hot, trendy areas close to popular eateries, gift shops with hand made items, and with a cool farmer's market right at my doorstep."

Posted by AinWA on April 11, 2014 at 4:47 PM · Report this
Looking at history, Americans moved westward then north to Alaska establishing new small towns and communities. With the help of neighbors you built your own housing. An agrarian and natural resource based society (farming, timber, fishing, mining) could do that. When we ran out of "the new west" a rocky transition to urbanization and manufacturing eventually evolved after much struggle toward labor unions and plentiful jobs (after WWII) narrowing the income gap. The middleclass could buy a house spending less than 15% on a low interest mortgage.

The late 1970's stagflation brought an end to mortgage affordability and the 1980's introduced job outsourcing to slave wage countries. Those financing political campaigns allowed rhetoric to obfuscate becoming a substitute for meaningful action by those elected. "You get what you pay for"... so true today.

ONE POSSIBLE ANSWER, (it's not pretty but clinging to socialist urban pipe dreams isn't either) - non-profit's should consider financing land trust purchases in rural areas to establish new communities. Like the farming communities of generations before, members would pool resources contribute labor to build housing and rudimentary infrastructure. With residential solar, wind, aquaculture farming and internet connectivity (supplied by county government) it has become possible to establish small new towns with a decent quality of life within 100 miles of expensive urban cities.

Our pioneer ancestors did not have the luxury of access to big city healthcare 90 minutes drive away, cultural entertainment via coax or satellite. Internet enabled businesses and high value added agriculture create opportunities not possible 20 years ago. Cities could help support the economy of new small towns with longterm purchase agreements for locally grown food, light manufactured goods and telecommute services.

It is naive to insist we can build our way out of a jobless recovery with eco-enlightened urban density, paid for with new taxes on the already economically vulnerable. A vicious circle; more need, more taxes to address the needy.... money flowing thru a system that enriches the politically connected wealthy and their elected servants. The pioneers took themselves out of that eastern equation. It was hard ... darn hard, but at least they became the stewards of their own collective fate. Question is - does this courage exist today in an entitlement focused population. Sustainable living points the way forward if we are able to trust small community values.
Posted by Mark-in-Seattle-too on April 11, 2014 at 6:11 PM · Report this

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