DEVELOPMENT FOLLOWUP: Latest plan for 3257 Harbor Avenue SW expands

| Development | West Seattle housing | West Seattle news

(King County Assessor’s Office photo, mid-2010s)

Back in December, we reported on the latest in a somewhat long line of development proposals for vacant parcels grouped under the address 3257 Harbor Avenue SW. An early-stage proposal in city files at the time suggested that developer Bode was exploring a 115-unit project. Now it’s turned up on the city’s Early Outreach for Design Review website, described as a much-larger size – eight stories, “approximately 308 dwelling units.” However, on the Bode website, the project (under an adjacent address, 3303 Harbor SW) is listed as 220 apartments, and other city files still suggest 115 units. Bode designs, builds, and manages its own projects; it already has two in West Seattle, 75 apartments at 2222 SW Barton and 115 apartments at 3050 SW Avalon Way. We’re contacting them in hopes they will clarify the 3257 Harbor plan.

Daniel May 6, 2024 (4:35 pm)

Definitely refreshing to hear of new housing development coming even with current interest rates.

TJ May 6, 2024 (7:58 pm)

More apartments. Where is the concern from people over the lack of condos being built? I may be wrong but all of these buildings the last 15 years seem to be all apartments. I don’t understand why condominiums are not being built here. The rental class only grows. While not reaping the benefit of gaining equity in the appreciation. Funny how some people want more density yet don’t care that it is almost all ugly boxes that aren’t for ownership. Talk about shrinking the middle class.

bill May 6, 2024 (9:09 pm)

Reply

Given that condos are usually ineptly managed by owner boards who don’t adequately fund reserves the lack of condo development is not a bad thing. Equity is the conjectured difference between imagined appreciated value and what you paid to buy. Having been on the losing end of condo ownership I can tell you only one of those things is concrete.
K May 7, 2024 (6:54 am)

Reply

There are plenty of townhomes being built which serve a very similar need as condos. Some even have HOAs, for those who are desperate to have more bureaucracy in their lives. It’s normal in a city to have a large percentage of renters, including people of various socioeconomic classes. There’s nothing wrong with renting.
Daniel May 7, 2024 (8:43 am)

Reply

My recollection is that historically, it’s more profitable and less risky to build an apartment complex compared to a condo. Prior to like 2020, the liability duration was pretty lengthy and covered a lot, to the point where builders just wouldn’t do condos. There’s been a few bills over the last 4-ish years trying to rectify that.
- HS May 7, 2024 (9:57 am)
  
  Reply
  
  This. It’s a liability issue. And as K said, there are townhomes being developed. Also, zoning has been changing and people are building detached units on single family properties which as being sold as condos.
  - Kram May 7, 2024 (4:34 pm)
    
    Reply
    
    HS; the detached units (DADUS) cannot be sold. They can be rented but the properties are not subdivided.
    - Austin May 10, 2024 (10:48 am)
      
      Properties can be condominiumized with ADUs and DADUs. We’ve funded a few of those in Seattle in the recent past with the primary SFR, the ADU, and the DADU all being owned by different parties. It is definitely possible, because I have seen it done more than once.

Bob May 6, 2024 (11:02 pm)

Property developers only care about the equity they create by building “luxury” apartments. They’re happy to have 50% vacancy all that matters is the equity baby. They can then use that equity to build their wealth. with the tech industry lay offs and the current economic downturn, there will only be less renters for these ridiculous prices that are attractive to developers.

ECON101 May 7, 2024 (10:08 am)

Reply

Interesting theory, Bob.
But happy with 50% vacancy!!!
Got any examples?
Kram May 7, 2024 (4:39 pm)

Reply

This makes zero sense and is incorrect. Apartment buildings are modeled with a 5% vacancy rate (give or take a little). Losing 50% of an apartments monthly income would be a huge loss for the ownership group. This also hurts what you are calling equity as the building is worth less. Much less, as a 50% vacancy rate is not normal and would not perform well at market. Source: I invest in apartment buildings and understand the modeling. I assure you, apartment ownership groups want 100% occupancy at all times. That maximizes cash flow and yes, equity.
Austin May 10, 2024 (10:52 am)

Reply

You’re believing in some kind of wackadoodle fairy tale. Professionally I look at commercial and multifamily underwriting on a daily basis. A building with ongoing occupancy issues is going to have a hell of a time 1) paying their operating expenses including significant property taxes, insurance, and utilities costs, and 2) getting any kind of financing partner without a significant sponsor buy-in (aka reducing leverage) which across their entire financial system would limit the sponsor’s ability to redeploy capital into another project.Simply put, your assumption is not correct. Sorry. (Edit: I meant this reply to Bob, not Kram.)