Why all the apartment-building? Low vacancy rate in West Seattle, says new research

| Development | West Seattle news

That image from Gatewood photographer/pilot Long B. Nguyen captures in-the-works and relatively-new apartment projects in The Triangle area – in the foreground, the former “Hole,” now Spruce, which you might have noticed has risen above street level; in the background, newer projects including Link, which opened in 2011, and at the top-center of the photo, Nova (WSB sponsor), which started leasing in 2012. Those represent just a fraction of the 3,000+ apartments (by our ongoing calculations) that are under construction/on the drawing boards/newly finished, and some wonder why so much – here’s one answer: The vacancy rate remains low. According to this new report from Dupre & Scott – who specialize in “apartment market research and advice” – forwarded to us by a WSB reader, the “gross vacancy rate” in West Seattle right now is 4.5 percent. That’s lower than the Puget Sound-wide rate Dupre & Scott found, 5 percent.

Diane March 24, 2014 (2:06 pm)

cool photo; I don’t think this is news to most of us who are renters; not only is there no place affordable to move to; due to low vacancy rate, many apt owners have taken advantage by raising rents; for some, owners have raised rents so high that renters have been displaced from longterm homes; all these apts being built will for sure be a help to renters; although, once the vacancy rates start going up due to too much inventory, I expect apt projects to start flipping into condos, just like they did in last real estate bubble; but in West Seattle, we’re probably a year or so away from the next condo-flipping craze (which also displaces longterm renters; happened to me in my very first apt after moving to Seattle area, 15 yrs ago)

kgdlg March 24, 2014 (2:57 pm)

TR thanks for posting this information. I often find that the demand part of the development equation is not fully understood by all of us experiencing the building boom right now. It is so hard, because it feels like in order for Seattle to have a healthy economy, businesses need to be hiring and inevitably, new people move here because of this hiring. I myself came here 10 years ago for graduate school and stayed afterwards because I knew there would be career opportunities for me here. And we all need places to live. Like Diane, I wonder if rents will soften with over supply at some point, or whether the condo conversion will begin anew. My limited understanding of condo construction is that it is easier to convert than to build condos from the get go due to liability re: water intrusion etc. I can see this having a longterm impact on the continued development of rental housing, if we begin to see many of these buildings flip to condos.

skeeter March 24, 2014 (4:28 pm)

Normally one would think that building new apartments, and therefore increasing housing supply, would lower rents. Not always the case. I’ve seen research that when newer/more expensive apartments are built at least a portion of the existing apartments will proceed to remodel/repair etc so that their units will compete with the more modern units. The landlords of the existing apartments then increase rents to cover the cost of the remodels.
This is what is happening in Bellevue. Lots of new apartments have been coming online the past couple years. But the rents are increasing even as supply increases. I know West Seattle isn’t Bellevue, but same idea. I expect that even as West Seattle grows it will become more and more expensive and lower-priced rentals will be increasingly difficult to find.

Peter March 24, 2014 (4:34 pm)

Kgdlg, just to clarify, condo developers are responsible for water intrusion and other building defects for four years from the date of the last sale, that applies regardless of if the building is new construction or a conversion. So no, conversions are not a legal way for developers to avoid that liability. In fact conversions are a much much higher risk for developers and buyers due to often unknown underlying building conditions. Trust me on this one, my knowledge of the subject is comprehensive.

Peter March 24, 2014 (5:13 pm)

Correction to my previous comment: condo developers remain liable for four years from the first sale, not the last.

Wes C. Addle March 24, 2014 (5:24 pm)

I’m looking for a low rent West Seattle apartment right now. Too bad one with a W/D and parking for two doesn’t exist in WS.

Jeffrey March 24, 2014 (6:31 pm)

Land owners taking advantage of supply and demand? The HORROR!

The absolute horror!

I hear the sounds of rent control. Unfortunately or fortunately depending on your side of the fence, your elected officials are Pavlovian when the campaign cash dinner bell rings.

Clyde loves the Pavlovian bit especially sense humans are seemingly just as apt to respond to the dinner bell as dogs and iguanas.

Ah… human folly.

Jesse D March 24, 2014 (8:52 pm)

I wonder if rents are high or if they are just returning to normal? During the housing bust, with so many town houses and condos dumped on the rental market, it was extremely affordable to rent compared to owning. Now that the properties that were being sat on instead of sold are working their way onto the private home market, it seems like things are finally getting back to normal.

SaraS March 24, 2014 (9:43 pm)

Funny to see my apartment complex, Link, on the map above. Also funny to see these stats – with vacancies so high, is that why in my 2nd year here they raised my monthly rent for a “urban 1 bedroom” (basically a studio w/ a sliding door) up to $1400/month? RIDICULOUS.
I’m out of here as soon as the lease is up.

Having read this post, I am aware that I haven’t had neighbors on either side for probably more than a year. HMM.
Do I need to quote Jimmy McMillan??

Codad March 25, 2014 (11:11 am)

Wow! I am amazed how much these apt cost a month. SaraS is paying $1400 a month for a 1 bed. I have a mortgage on a house in WS that I purchased in 2010. I pay $2100 a month for a two bed, plus studio, 1 bath, living room, kitchen, den, laundry room and garage. Plus a yard on a 4k foot lot. I purchased my home in 2010.

kgdlg March 25, 2014 (1:08 pm)

Peter, thanks for info. SO, does that mean that the original developer is responsible for defects 4 years from date of original construction or 4 years from date of conversion or flip to condos? (assuming a new entity buys and flips them? Just curious? I have always imagined that many of these apts with their granite counters, etc. would flip to condos once that market returned. But maybe the liability is just too great given the water issues here. Also, I have heard there is ridiculous amount of foreign money in the apartment development business right now, specifically Chinese funds being invested in exchange for citizenship…

http://www.voanews.com/content/foreign-investors-buy-their-way-to-us-citizenship/1737041.html

Neighbor March 25, 2014 (4:44 pm)

Can’t wait for the Whittaker with a Whole Foods in the neighborhood. It’ll relieve some of the pressure on rent increases and provide amenities all of us neighbors can use.

Diane March 25, 2014 (7:54 pm)

there are 1000’s of other apts that will be completed before the Whole Foods project
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Oregon 42 is due to open soon; 100 apts
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the Conner Homes/now owned by Equity double block project at the junction; 200+ apts
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the Hole/now called Spruce; 200+ apts
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the Conner project and the Hole went through design review 6+ yrs ago
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there are many more apts being built right now in WS, and many many more apts going through design review
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I don’t know of anyone fighting or debating more apts in the Whole Foods project, but it is likely at least 2 yrs until completion, even if it were approved today

Sorry, comment time is over.