Seattle is losing apartments. Small landlords blame overregulation (White Center, Rainier: renter, insurance)

[margaretBartle]

https://kuow.org/stories/seattle-is-losing-apartments-small-landlords-blame-overregulation"
Excrpts:



“Every small landlord that we know in Seattle has an exit strategy to divest and leave the city,” said MariLyn Yim, a co-founder of the group Seattle Grassroots Landlords."


Yim cited well over a dozen permanent tenant protections enacted by Seattle and Washington state since 2020.


Seattle's landlord scene has become distinctly less "mom and pop" and a lot more corporate.
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What I don't understand is, who cares?
They are talking about duplexes and small apartment buildings. What difference does it make if we loose most of the small apartment buildings? If they all get torn down and replace by 150-unit sidewalk-to-sidewalk ugly builinngs like what they are building in Ballard and along Aurora Avenue?


We've already got these sacrifice areas called "Urban Billages" where the tree canopy and wonderful old Seattle landscaping is gone. So why not just have it all be 15 story builidngs with hundreds of units owned by global finance funds?

[jabogitlu]

It sounds like you're extremely unhappy here. Have you considered moving to another place, instead of venting on message boards? Might be better for your health overall.

[texasdiver]

Except just on this same board there is another thread titled "Downtown Seattle has more residents than ever"

I guarantee very few of those new central Seattle residents are living in single family homes with a mortgage. They are mostly renters.

And these "Seattle Grassroots Landlords"? I expect a bunch of them are investor types who have have bought up single family homes and renting them out. They aren't landlords of actual legitimate apartment buildings.

Seattle needs to come to grips with the fact that it is a major city. Higher density is not an evil thing. It is part and parcel with being a world class city.

Sidewalk to sidewalk apartment buildings, with no front lawn!....the horror!

[StealthRabbit]

Seattle's landlord scene has become distinctly less "mom and pop" and a lot more corporate.
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What I don't understand is, who cares?

Not every renter wants the live in a multi-tenant apartment. (Noise, dogs, parking, access, safe escapes, privacy....

Pricing must increase a lot to cover lost rents during COVID, increased
lending rates, Taxes and insurance, tenant risks, and legal needs to compensate tenant protection. Every commercial lease will include management cost overhead. Seattle property valuations make financial viability of owning rentals a losing proposition.

Expect many landlords to sell and find an easier way or region to put their investments.
This will result in significant additional costs, and less choices to renters.

Some of our population might care about this. A housing crisis will likely bleed over into social unrest, which will add to local economic woes.

Stay tuned.

[jabogitlu]

No, this is a normal function of the market. The highest and best use of that land has changed. In practical terms, that exactly means the underlying financials no longer make sense.

This is the same market mechanism that transitions ag land to industrial or commercial land.

What Seattle needs to be doing is upzoning broadly, so that small op landlords who can still cover a 4-unit mortgage (and hell, even the smaller ops who can cover a 12-unit or 20-unit mortgage) aren't completely removed from the market.

In short, what you're talking about is narrowing of investment possibilities, not skyrocketing risk from some as-yet-undefined cabal of renter interests. To maintain a healthy local economy, we should be making decisions that broaden investment possibilities, and not making decisions that restrict those possibilities.

The real regulatory risk is from permit review. We need to abolish design review and roll that entire process into an administrative master use permit. And we need to guarantee a permit window (12 months or less) with financial risk for the city so the developer can recoup holding costs and opportunity cost if permits aren't either granted or denied.

[Hemlock140]

The city ban on evictions during Covid caused a big loss of revenue for many of these small landlords, and even after that ended they have not been able to collect that back rent. Selling is the only way to recover the costs and move on. All of the other "tenant protections" are more of an annoyance, this particular one has been fatal to many. Meanwhile, with the upzoning already in effect for 27 neighborhoods and city-wide pending, many of the smaller rental apartments and houses will be bought by developers, for new construction. Then, of course, there will be more available rentals, but the rents will be a lot more than under the small landlord. Creating more housing this way does nothing for the poor and homeless, it's just more gentrification.

[jabogitlu]

No, what you mean is that rents in new construction are higher than in older construction.

If, controlling for that factor, you have some kind of proof that small shop landlords charge less rent than investment groups, I'm all ears.

[Hemlock140]

Originally Posted by jabogitlu

No, what you mean is that rents in new construction are higher than in older construction.

If, controlling for that factor, you have some kind of proof that small shop landlords charge less rent than investment groups, I'm all ears.

Here is one indication.

https://www.king5.com/article/news/l...b-907e4f6ccdf0

[jabogitlu]

I'm surprised you'd offer this case for a proof. It's a very neoliberal flavor idea that a property management and analysis tool used by many major market participants is collusion. If this is collusion, then the hospitality and hotel industry better get ready, because there's a massive lawsuit coming for them too.

The real enemy of unit prices is artificially constrained supply and land held far below its carrying capacity to benefit wealthy homeowners, who currently have an outsized political voice in the city, county, and state. Artificially "downzoned" land in central Seattle has pushed up land prices to the point that investors and developers with access to smaller pools of money can't even begin to build housing, because they can't access sources of funds at scale.

The collusion lies with existing single-family homeowners (specifically framing them as the homeowner-occupant, not talking about investment companies who deal in SFRs) who work together across the region to promote scarcity and push up their home values. We have an entire economic housing model built on value-in-use pegged on inflated salaries of tech workers. That's not sustainable over the long-term as we can see now with San Francisco and its softening land values.

[margaretBartle]

Originally Posted by jabogitlu

The real enemy of unit prices is artificially constrained supply and land held far below its carrying capacity

What is "carrying capacity"?


Seattle and its suburbs have very many acres of land that NEED additional development to create the necessary population to support the grocery stores and retail stores that create a desireable neighborhood.



Going into existing nice neighborhoods and trashing them out is not in the city's best interests. Allowing denser development in areas like south Seattle, and the burbs like White Center and Lake City, where there are few retail cores, and none within walking distance, would help everyone. The Link LIght rail station near Rainier Beach could hold tens of thousands of units, and it would make the neighborhood bettr for everyone.