City / Economy
Battle Between Vulnerable Tenants and Goodman Real Estate Gets To the Heart of What Kind of City Seattle Wants To Be
by Ansel Herz
on Wed, Apr 2, 2014 at 4:11 PM
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."