Seattle Condos: Are Conversions Hurting the Rental Market?

As many other major markets, the condo conversion waive has hit Seattle in a big way over the past two years.  Since late 2004, there has been a 450% increase in the amount of apartments converted to condos!  Of course this topic is very controvercial and each city attacks it differently. 

Many cities in California have imposed caps and restrictions on the number of apartments acquired for conversion.  San Diego and San Francisco to name two.  Seattle condos, especially conversions, are in abundance but what do these conversions do to the rental market.  In Seattle there is no rent control so as the apartments availability dwindles, guess what happens to rents…they go up.  Affordable housing issues then come in to play.  The city has recently passed some legislation to protect renters, but many feel it will not be enough.

Once a building’s owner decides to convert their building to condos, do not receive much assistance from the builder or the city. Owners must only provide 90 days notice, and construction, remodeling or repairs can begin soon after notification. Assistance for relocation is limited to $500 per unit for low income renters.  This is part of the new legislation but there was no cap placed on the number of apartments that could be converted to condos! 

San Francisco has taken the steps they feel necessary to mitigate risk in diminishing affordable rental housing.  Seattle seems to fair more on the side of the builders in this aspect.