At age 75, Gabriel Szabados had been living comfortably in the Oda Apartments (41st Avenue East and East Madison Street) for 15 years. He worked as the maintenance man and caregiver, which lowered his rent from $800 to $625 per month. That is until he received a notice on Feb. 27 that in 60 days his rent would increase to $1,550. Szabados decided to move.
“I liked [Oda Apartments] a whole lot,” Szabados said. “I was really, really sad when I had to leave.”
The day before the rent increase, April 30, he moved into a friend’s house, where he plans to live for several months.
The rent notice was sent out about two months after Cadence Real Estate took over management in January. Chris Garvin and Barrett Johnston, principals of Cadence Real Estate, said they needed to increase Oda’s rents to work on the apartment’s deferred maintenance and upgrades while also meeting Madison Park’s market value.
“Unfortunately, the building had major system failures such as electrical shorts, a roof that was caving in (a tarp was on it when we purchased) and plumbing that was running brown water at times with no pressure,” Garvin said. “We were forced to make the upgrades; it was a safety issue.”
Cadence began renovating the building in early February, installing new plumbing, electrical and windows and repairing the roof. Garvin and Johnston said these repairs were necessary to restore the 100-year-old building and create a healthy and safe living environment for tenants.
Szabodos wished Cadence conducted the construction differently. “I don’t mind if a new owner comes in and says that we need to update,” Szabados said. “Then they do the upgrading and changes slowly.”
Unlike Cadence’s other buildings, many of Oda’s tenants stayed at home during the day, Garvin said: “In the past, when we have re-plumbed a building, that has not been an issue. But since I am assuming most people were home all times of the day, it was invasive to them. But we do understand that plumbing upgrades can be invasive and annoying to residents.”
As for the rent increases, Johnston said, “The timing happened that leases were expiring and new management team came in and there was a ton of deferred maintenance, and the rents were well below market. And there is a new loan on the property: There is a lot of money going into it, and it’s got to get to market rent.”
Szabados said he was also willing to pay more, but not as much as he was told to.
‘Choosing to leave’
Jim Metz, the Seattle Department of Planning and Development’s Owner and Tenant Assistance supervisor, said that Cadence has consistently raised rents by large amounts in other apartment buildings in town.
In Seattle, there are no limits on rent increases. Landlords can raise it as much as they’d like, unless tenants are under lease contracts, which had just expired at Cadence. The only requirement in the city is a 60-day notice if rent is to increase more than 10 percent.
“A lot of people get these catastrophic rent increases, and they move,” Metz said. “There is nothing illegal about that in the city. But it is a way that organizations such as Cadence clear buildings for purposes of rehabilitation.”
“We haven’t forced anybody to leave,” Garvin said. “They have just chosen to do so.”
Garvin said he does not enjoy raising rents: “That is not fun for us. But we do have to make sure the building performs in the black, not in red. It’s a balance you have to weigh. I get the frustrations of people. It’s not a fun thing to deal with.”
Cadence said that it needed to raise the rents to meet market-rate levels, which are about $1,100 for a studio apartment and $1,300 for a one-bedroom apartment, depending on the floor plan.
The City of Seattle Office of Housing considers affordable housing rent to be less than 30 percent of a person’s income. When people pay more than this standard, they are considered “cost-burdened.” A low-income individual who makes about 30 percent of the area median income in King County ($18,550) could afford to spend $463 on rent for a studio and $496 for a one-bedroom apartment. This becomes tricky when the average Seattle rent is $1,301.
Through Seattle’s housing levy, the city provides more than 12,000 city-funded apartments for lower-income Seattle residents. But none of these apartments are in the Madison Park neighborhood.
Seattle Office of Housing communications director Todd Burley said Madison Park’s high land values and lack of transit development sites makes it more difficult for subsidized housing projects to pencil out.
Developers for subsidized housing projects must raise money through nonprofits, as well as provide certain social services to their tenants, Burley said: “It’s hard to make the budget work out in an area like Madison Park.”
So far, approximately six of the 10 tenants have moved out of Oda since the new management came in.
Alice Sax was also an Oda tenant who moved out in late March. Living there for three years, Sax said she valued being part of the Madison Park community, which is home to many of her family members, as well as being her childhood neighborhood.
But when her rent was increased from $925 to $1,590, along with the inconvenient renovations, Sax decided to move.
Sax, a Seattle University graduate student, studied and took her final exams while also searching for a new place to live. Two days after she finished her finals, she moved into another building in Leschi. The move cost her $2,000, including transportation, as well as first and last months’ rent on her new place. These costs forced Sax to take money out of her savings for school.
“It was extremely stressful,” Sax said. “I was a wreck.”
“There are other landlords that will buy a property and clear the building through large rent increases, rehabilitate around people and ask for access that is very, very broad,” Metz said. “I’m not saying it’s right, but I’m saying it’s legal. ”
Metz suggested that landowners apply for a Tenant Relocation Assistant License, which would give tenants six months to organize themselves and move, as well as pay low-income tenants who make no more than 50 percent of the median income in King County, $3,188 for moving costs — half paid by the city and the other by the landlords.
“That is an obvious step that can be taken that would bring more equity and more justice to the tenant populations,” Metz said. “That is what the Tenant Relocation Assistance Ordinance is for: to provide benefits to low-income people who have to move as a result of the work that is going on in their homes. Or, if they do not qualify for benefits, to be able to have a substantial period of time to find a new home, organize themselves and move.”
In response to whether the Tenant Relocation Assistance License was needed, Garvin said, “This ordinance was not applicable to the Oda Apartments, but I am aware of it.”
The ordinance does not legally apply to the Oda situation because the tenants were not forced to move out because their housing was either being torn down or underwent substantial renovation, have its use changed (for example, from apartment to a commercial use or a nursing home) and/or have certain use restrictions removed (for example, a property is no longer required to rent only to low-income tenants under a federal program), as stated in the Tenants Relocation Ordinance.
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