Conservative media around the globe are taking turns blasting the City of Seattle for acquiring new housing providing “panoramic views of the Puget Sound and the Space Needle” in its purchase of three new Capitol Hill apartment buildings, saying the city got taken in its payout of nearly $48 million for the three properties.
“The apartments work out at an average of $300,000 per unit – two to three times higher than what it costs to build,” the Daily Mail reports. “From homeless tents to penthouses with views,” Fox News hissed in its report on the deals, claiming developers say the price is “two to three times higher than what it costs them to build.”
But the most recent apartment building real estate deals in the neighborhood show that the city’s math might be right on and that the Daily Mail and Fox takes don’t add up.
Last month, one of the largest holders of West Coast apartment properties announced it slapped down more than $68 million for two nearby buildings. American Capital Group’s acquisitions added the 59-unit 700 Broadway building and the 91-unit Vantage Park building to the company’s $1.5 billion collection of nearly 80 properties with 16,000 units across ten states.
The back of the envelope math on ACG’s latest acquisitions? A $450,000-per-unit price tag.
To be fair, the buildings the city is acquiring generally feature smaller units and aren’t located on quite as prime real estate as 700 Broadway’s northern Broadway views. 700 Broadway, by the way, sold for only $20.25 million in 2012. A 65% appreciation in nine years isn’t bad for a mixed-use building once considered one of “Seattle’s biggest turds.”
One thing both the Daily Mail and Fox News agree on: Seattle is getting a better deal than Los Angeles’s $580,000-a-unit Weingart Tower plan to build new furnished apartments in the Skid Row neighborhood.
- 420 Boylston Ave E — $16 million: Developer Johnson & Carr purchased the Boylston Ave E property and house most recently used as an office building in August of 2018 for $2.35 million to build the seven-story “small efficiency dwelling unit” project. The property was subject to a “housing bonus covenant,” the instrument used to guarantee a portion — in this case, two — of its units would be reserved for low income renters under the city’s Mandatory Housing Affordability program.
- 225 Harvard Ave E — $21 million: The eight-story development went through design review in 2018. Highpoint Investments purchased the property for $1.2 million in 2019. It, too, was subject to a “housing bonus covenant.”
- 506 10th Ave E — $10.975 million: Developers Prestige Partners and Valere Development purchased the property previously the location of a single family-style home for $700,000 in 2015 with plans for the five-story building.
Meanwhile, the City of Seattle’s prices also are in the ballpark of what the Low Income Housing Institute agreed to pay in its late 2020 deal to acquire the just-constructed Clay Apartments at 15th and Howell 602 E Howell. That deal came in at $18.2 million — around $240,000 per unit.
While the affordable housing provider and the city made deals keeping per unit pricing in the mid $200,000s, the open market for Capitol Hill tends to fall closer to ACG’s deal for the 700 Broadway building. In 2016, Chicago-based Equity Residential plunked down $25.9 million for the Packard Building at 12th and Pine, paying about $425,000 a unit.
UPDATE: An area developer has provided CHS with a list of recent building sales they feel are better comparisons for the projects purchased by the city. The developer’s takeaway: the city paid above market — but only when considering the prices paid for older buildings. “The reason why the city, and the county, paid so much is because they were focused on acquiring only new construction buildings,” the developer writes. One simple reason: The new projects don’t have any existing residents who would have been displaced in the deals. Here’s the developer’s table of recent comparison sales showing a range of $229,000 to $400,000 per unit in the “small unit” buildings.
$5 A MONTH TO HELP KEEP CHS PAYWALL-FREE THIS SPRING
🌈🐣🌼🌷🌱🌳🌾🍀🍃🦔🐇🐝🐑🌞🌻
Subscribe to CHS to help us hire writers and photographers to cover the neighborhood. CHS is a pay what you can community news site with no required sign-in or paywall. To stay that way, we need you.
Become a subscriber to help us cover the neighborhood for $5 a month -- or choose your level of support 👍
a little context on the style of the units makes a big difference too. Self contained units can range from 2000sf luxury 3/2 penthouses to 200sf single room occupancy units with a 3/4 bath and kitchenette. Paying 300k/unit for the tiniest of units may still be a bit steep, but if its cheaper than what the city and nonprofits can build from scratch for, then do it.
Instead of building congregate shelters and drug treatment facilities, Seattle is providing brand new apartments for mostly out-of-town drug addicts that will destroy them and continue to trash the city. We are prioritizing housing for them over the working people needed to staff local businesses, teachers, families, LGBTQ and BIPOC members that have been priced out of the neighborhood. Some will argue this is appropriate, but at least we need to acknowledge that there is a trade off.
I completely agree with your statement.
From what I’ve read elsewhere, these units will go to folks who have achieved a level of stability after living in tiny home villages and the like. So many, if not most, will be employed.
The unfortunate reality of it, is that the addicts and the mentally unstable are the ones that have been causing the most visible and severe problems for everyone in our neighborhoods… Because they affect all of us, and not just themselves we do notice them and prioritize them in a way that we don’t with people who are responsible for themselves, who don’t and shouldn’t like it that they’ve been pushed down to Renton or Georgetown to find spaces for living and for their businesses that they can still afford, but do it nonetheless.
*citation needed*
Mayor’s office says 60% showed up homeless. The homeless industrial complex has tried to hide this inconvenient truth for years.
Hm, Capitol Hill has been
severely gentrifiedundergoing progress for nearly two decades years. With the replacement of the older buildings/houses and the very little affordable housing added with these hilarious “housing bonus covenants” (read: Yesler Terrace) came the displacement of hordes of people; I’d say “we prioritized housing” for out-of-town people who can afford the insanely inflated market rate. Furthermore, I regret to inform you that the working and LGBTQIA you purport to care about began being priced out ages ago – unless you haven’t heard, the wages ain’t been keeping pace with the inflated cost of living (hence the gentrification of the CD, where the Black and Brown families you mentioned *actually* lived). Talking about BIPOC being priced out of Capitol Hill in 2021 is kinda funny. I think most of the Black people around the CHAZ had to make a trip of it; I know I did!It appears that the Daily Mail and Fox News, two far right tabloids, are upset that Seattle is doing something to solve the single problem that these tabloids use to criticize Seattle and so they’re grasping at straws to criticize the solutions.
The “Seattle is Dying” false narrative sells a lot of testosterone pill advertisements and they don’t want to lose that cash flow. It seems like just yesterday that Fox News (via Fox Business) was calling Seattle a “Socialist Hellhole”.