O’Brien, Sawant Grandstand While Apartment Owner Fixes Problems


It’s a pretty simple story. A new owner buys a building that has run down from an owner who used the deferred maintenance as a subsidy for lower rents. Often the buildings are so run down they don’t meet City standards for heal the and safety. So the new owner has to make repairs and the only way to pay for those is a rent increase. The headline here should be, “New Owner Buys Old, Run Down Building and Will Fix it Up.” But this is Seattle and it’s an election year.

Instead of offering help to tenants the new owner of 6511 Rainier Councilmembers O’Brien and Sawnant will protest in front of the new owners offices this morning in a totally pointless gesture to score some political points. The truth is that the owner, Columbia City Condos,” is doing the right thing. But you wouldn’t know that if you listened the noise coming out of City Hall.

Sadly, no help has been offered to help tenants and nothing has been offers to help make the repairs. They’ll be done by the owners and the residents will get a month’s free rent. That’s what’s really happening. But in the fantasy world at City Hall, the problems of tenants are being caused by the new owner trying to make improvements.

What Councilmember’s Sawant and O’Brien and Sawant should be proposing in the upcoming budget discussions is a fund to help the new owners make the repairs and pass the savings on to the tenants. Otherwise the new owner has no choice but to increase the rents to help cover necessary costs.

Deferred maintenance often creates more affordable units, but new owners who have to raise rents to make improvements are doing it out of necessity to make the buildings habitable. The City, if it wants to help keep rents low in buildings sold with deferred maintenance needs a program to help with needed repairs.

Here’s the statement sent out of the press ahead of the protest:

Statement from Carl Haglund of Columbia City Condos on his desire to fix up the old building he recently purchased at 6511 Rainier Ave.
“We sincerely apologize for the condition of the building that our company recently purchased. The company’s intent, ever since buying the building two months ago, is to make this a desirable place to live.

But some of the units are in a worse state of repair than we understood. Even though Columbia City Condos didn’t let the building deteriorate, we take full responsibility moving forward as the new owners.

We have decided to give the current tenants free rent during the month of October. This should give them some time and money, should they understandably decide to relocate.

A slumlord would continue to rent these really cheap apartments in their current condition, whether or not they need repairs. I want to make it clear this is not who I am, nor is this how Columbia City Condos operates. We are in the business of providing safe housing at market rents.

I recently purchased the building and was told prior to doing so that the building had passed the city’s own Rental Registration and Inspection Ordinance. But clearly that process is broken because I found when I took possession that multiple families were living in each of the units in conditions not suitable for Columbia City Condos. This is surprising now that I have seen the condition of the units. I was as shocked as anyone at the condition of the building after taking over.

Columbia City Condos is not kicking anyone out. We have to charge market rents, and our repairs will include exterior repairs as well.

We intend to keep this as workforce housing.

Most of these renters are very hard working people who are working night and day to send money back home. Many are larger families in the apartments.

We are going to do repairs to keep it clean comfortable workforce housing, and will try to accommodate larger groups so that it remains affordable when split among different adults.

Our intention is to take responsibility, and turn this around.”

Facts about 6511 Rainer

  • The conditions were present when Columbia City Condos bought the property at the end of July of 2015. The new owner has only had possession of the property since then.
  • Haglund was on out of the country during August, and is learning some details about this situation along with everyone else
  • The prior owners rented out apartments for as little as $550 per month. This is not sustainable, and is obvious given the flagging condition of the units.
  • Rents were raised with the required 60-day notice to 1,175 for 2-bedroom units and 900 for 1-bedroom units.
  • Of 13 units that received 60 days notice – 10 tenants are choosing to stay since we allow very large groups of tenants to occupy the units and this works for those families
  • As a part of the purchase agreement, the building was to pass the inspection that certified the building met the City’s housing standards.
  • We were just as shocked as everyone else when we saw the condition of the building; the purchase of the property was finalized while we were out of the country for 5 weeks.
  • Only 2 requests for work orders received from the time of the purchase until 10/1/15.
  • We deeply apologize for the conditions at the building that we did not create; our team is working full time to resolve the conditions at the building.
  • We will not implement the rent increases until the work to meet inspection is finished.
  • Although the building repairs don’t meet the threshold for relocation assistance, we hope the free rent for a month gives the tenants some time.
  • When new owners take over a building in this kind of disrepair it takes time to get it into better shape. The assertions being made by Councilmember Sawant are false and leave the impression that the conditions of the building have gone on under the current owner. That’s not true.
  • It’s unfortunate the Councilmember Sawant is scoring political points instead of working to improve the conditions in rental units all over the city by advocating for resources to make improvements to meet the new standards without having to raise rents. She has made real attempt at seeking a solution with Columbia City Condos, and has instead decided to use it as political fodder for her grandstanding

Mike Scott: A Crisis of Hyperbole

Over at the City Builder page on Facebook there’s been a fair amount of confusion about the idea that we’re not in a rental housing crisis — at least in terms of price. It’s worth watching the video and reading the original blog post on his site.



Economics, Not “Social Justice,” is How We Solve Housing Problems

I was sitting a meeting about affordable housing last week hosted by Seattle City Council candidate Lorena Gonzalez. The emphasis was “social justice” and housing. Gonzalez, after listening to a discussion about housing prices and City policy, concluded that the best way to understand and deal with rising housing prices was to look at the issue through a “social justice lens.” There may be people in Seattle who know that that means, but I don’t. In Seattle the words “social justice” have come to mean roughly what the words “family values” mean in Bartlesville, Oklahoma; code language to sort “us” from “them.” Social justice is rhetorical stick used to beat back perceived enemies and keep allies in ideological lock step. It’s useless for solving any problems; if we want to address price and other issues we need to use economics. Here’s a real life example.

Here’s what Tim Harris, founder of Real Change Seattle’s groundbreaking homeless newspaper, had to say on Facebook about my comments in the KING5 story featured above:

Has there ever been a developer slime that Roger Valdez won’t defend?

I get that it’s Facebook and not exactly a high flying intellectual forum for discussion. But I generally expect Harris’ comments to sharp, funny, but thoughtful. The truth is the whole story misses a key point raised by another person in the comment thread.

It’s odd, there was no mention of the rental inspection legislation that is coming down in the next few years and how that might impact renters, landlords and the safety of units across the city.

Exactly. The issue with this property has a lot to do with legislation requiring landlords to keep up their property or face serious consequences. That’s a good thing. The legislation, if we give it the benefit of the doubt, was designed to find exactly the kind of conditions at this property and get them fixed. After agreeing with this point, I followed with a comment.

I have never will speak of you without respect–because I do respect your work. Don’t expect anything from you but you’re smart enough to know the facts. Get them.

As far as I am concerned Tim Harris is one of the smartest and most talented and well read individuals I’ve met in the city over the last decade; principled, determined, and unafraid of taking tough stands and calling people out. He and I don’t agree on many things, but we’ve had good conversations in the past. That’s what makes his quick, knee jerk response so unfortunate; people listen to Tim Harris.

Anyone who spent time digging into this sad story about this property would find the irony that Councilmember Nick Licata, a champion of rental inspection legislation would show up, have a photo op in front of the building attacking the new owner for raising rents on a building with terrible conditions, call for rent control legislation, and then take off, leaving the tenants and the landlord with nothing but a news cycle of bad press.

Here’s part of the text I sent to reporters covering the story and it states what’s really going on here:

The previous owner deferred maintenance of the building, not spending money to keep it repaired. This meant lower rents, but a the expense of the quality of life of the residents.

Now a new owner has purchased the building and intends to bring it up to the standard required by the City for rental housing.  That costs money, and will mean higher rents.

What Councilmember’s Sawant and Licata and Sawant should be proposing in the upcoming budget discussions is a fund to help the new owners make the repairs and pass the savings on to the tenants. Otherwise the new owner has no choice but to increase the rents to help cover necessary costs.

Deferred maintenance often creates more affordable units, but new owners who have to raise rents to make improvements are doing it out of necessity to make the buildings habitable. The City, if it wants to help keep rents low in buildings sold with deferred maintenance needs a program to help with needed repairs.

It may feel good to look through the “social justice lens” because it shows a simple story of an evil, greedy landlord raising rents on horrible apartments and victims who are immigrant families. But when you look at the math and the policy, it’s an equally simple story. If you’re going to raise standards on rental housing someone has to pay for that. That someone is going to be renters both in the long run and the short run. If we want to avoid owners subsidizing rents with deferred maintenance, then we need to use public resources to make the repairs. It’s that simple. Otherwise we’ll see more sales of older run down buildings to new owners doing the right thing and fixing up the buildings but having to raise rents.

Investors and banks are not charitable organizations, if they loan money to buy a building they want a return. When a run down building turns over, eventually rents will have to go up to improve the quality of the building to meet the City’s standards. Rental housing is a product and is sold based on supply and demand and costs. If the new owner fixes the roof, she’s going to have to find the money to do that work from her operating budget. Where does the operating budget come from? Rents.

Forming a mob against landlords and developers won’t help the tenants in these buildings. It won’t. All the social justice lens does is needlessly polarize people into good people that “believe” in social justice (whatever that means) and cold hearted people that do the math. Holding press conferences in front of substandard buildings pushing for bad policies that have no relation to fixing the building won’t help the tenants. It won’t. Doing the math, raising the standards in our community so people don’t have to trade low quality for low rents is something that would actually help poor people having to make that trade off today. But that doesn’t fit the social justice narrative.

And to answer your questions Tim Harris, no there isn’t a developer or landlord I won’t defend from the social justice mob when the mob is wrong on the facts and wrong on the math.



Commercial Linkage Hearing: Lots of Love for Fees, Little Support for Upzones

Last night I attended the public hearing for the so called Affordable Housing Impact Mitigation Fee or Commercial Linkage fee associated with the Mayor’s Housing Affordability and Livability Agenda (HALA) Committee recommendations. The commercial linkage tax was agreed to by commercial developers because it has made financial sense for those developers to pay a fee for additional development capacity. In fact, over the years most of the participation in the City’s Incentive Zoning program was from commercial developers. For a variety of reasons commercial development can better absorb fees for some additional floor area, while residential developers haven’t found incentive zoning to be much of an incentive at all. There was lots of support for the new fee last night, but not much for residential upzones, the key component of the “Grand Bargain” struck as part of the HALA process. It’s why I am skeptical the Bargain will hold together under the steady opposition of social justice, anti-growth, and neighborhood activists.

Oddly, if one didn’t know better, one would have thought that jobs and new housing were like toxic waste; something dangerous, deadly, and a mess that needs to be cleaned up. Throughout the proceedings speaker after speaker stood up and said, “I support the fee,” and followed it by reasons why new housing and job growth were bad things that the fee could somehow offset. That’s just bad economics. New housing is good all by itself. Speakers continually talked about the “housing crisis” and “displacement,” both things that we’ve got evidence are not really happening. Rents aren’t “skyrocketing” and displacement, quantitatively, is very small compared to new units being built. I got up and left after about an hour and a half of listening to this. I’m guessing the hearing last night is just the beginning of lots more fee boosterism with no upzones.

And remember the upzones come at an additional cost which may not really be offset by the additional capacity created. There are lots of problems with this “Bargain.”

Design Review: Room for Improvement 


Last night I attended the first of two community meetings hosted by the City of Seattle’s Department of Planning and Development (DPD) on proposed improvements to the Design Review process. Many people, both developers and neighborhoods, are not happy with Design Review. Builders often feel like the process is expensive with very little benefit and neighbors feel like they don’t have enough control over the outcome. Can the process be improved?

I’m skeptical. The problem with Design Review is fundamental: it’s impossible to mandate, or even define perfectly, “good” design. So many of the elements reviewed by design review boards are qualitative. Windows, doors, paint colors, and massing are all important visually, but do they really matter if people can live in the building? Some argue that community involvement makes buildings better and therefore should gain support from neighbors.

But that’s rarely the case. People who oppose new development generally don’t oppose it because of windows or paint colors but because of all the new people. Density is people after all. Would moving windows around on microhousing have made opponents suddenly say, “oh, well, now I don’t hate microhouding anymore!” Unlikely.

The process for reviewing the process includes one more meeting on October 14, from 6:00 – 7:30 p.m. at University Heights Community Center, 5031 University Way NE.

According to DPD staff the Council is likely to act sometime next summer. We’ll be watching the process carefully  until then. Our bottom line? As long as design review exists it should be predictable and add as little time and cost as possible. The City Council needs to balance production needs and affordability with design, and, generally, production and affordability should win.