Owners of a low-income apartment house in downtown Seattle say the city’s pro-tenant laws have left their property at the mercy of drug addicts and criminals. Represented by Stoel Rives, the owners have filed suit in King County Superior Court, claiming the ordinances passed by the left-wing majority on the city council from 2018 to 2021 have “functionally commandeered” their property for use by too many people who don’t pay rent.
The property is the 254-unit Addison, near the King Street Station at 308 Fourth Avenue South. This is not public housing, which is generally for tenants with 30 percent or less of area median income. The Addison is for tenants with up to 60 percent area median income. In 2022, it was charging a maximum rent for studio apartments of $1,358, and for one-bedrooms of $1,455 — prices well below market for downtown Seattle.
In 2010 the century-old building, which was originally a hotel, was sold in a limited partnership to private investors seeking tax credits. With financing from the Washington State Housing Finance Commission, and an issue of bonds underwritten by Citigroup, the investors paid $12.5 million for the building and put another $26.5 million into upgrading it. They say that value has now been wiped out.
The Addison opened in 2015. For four years, its owners say in their lawsuit, the Addison “became a reasonable and affordable place to live.” It was full, or almost so. Because it could screen the people it admitted as tenants, it had few evictions. And it operated in the black. Then came the new ordinances, which the owners say, “made it virtually impossible to operate low-income housing in Seattle.”
Under the Fair Chance Housing Ordinance, adopted in 2018, apartment managers were forced to accept applicants with criminal histories. Under the Roommate Ordinance, they were forced to accept as tenants any relative or friend an existing tenant invited in. Through these two ordinances, the lawsuit says, “the city has forced GRE Downtowner (and Seattle’s other housing providers) to accept as tenants dangerous criminals who often refuse to pay the rent they agreed upon.”
The only way to get them out, the lawsuit says, was through eviction. Because of these ordinances, evictions at the Addison increased from 17 in 2017 to 34 in 2018 and 63 in 2019. But in 2020 the council passed the Covid-19 Eviction Moratorium, which stopped evictions (except for immediate threats to personal safety) for two years. The council also passed the Winter Eviction Ban, which forbade cold-weather evictions in December, January, and February of every year.
Here are the number of evictions, and the adjusted net cash flow of the Addison, 2019-2023:
The reputation of the Addison was ruined. On Yelp, Shaun S. wrote in November 2022, “This is a junkie haven. One tenant smokes meth in the lobby area, walks around half naked. Don’t move here.” In October 2023, Zoe E. wrote, “Fire alarms always going off. Area is super dangerous… Do not live here.” In September 2023, occupancy at the Addison fell to 55 percent as disgusted tenants moved out. In November 2023, the Addison defaulted on its mortgage.
“No rational for-profit developer” would create such a property in Seattle today, the lawsuit says.
Alas, if you look up the history of “the projects”, you’ll be struck by how history rhymes.
It seems very reasonable that the city’s supposed tenant-friendly laws negatively impacted finances and safety at the Addison. It will be interesting to see how the lawsuit plays out…
One thing – this article’s headline is, “Why a Downtown Low-Income Apartment Building had to Close” However, the Addison has a website that is advertising for residents; it does not seem to be closed.
The courts won’t bail out the building’s owner(s) on their regulatory takings claim. They should sell it, take the loss, and move on.
This is just one example of many cases like this. Single family landlords or ones that have modest sized buildings that offer below market rent face the same issues with destructive and dangerous non payers along with a plethora of tax payer funded low income housing providers are in the same boat. It was just another day in the Housing Extortion Court this morning for landlords where they got default awards when tenants that didn’t show up in court. Just the cases that were heard today including non profit housing providers, the total of unpaid rent just today was close to $150,000.00. Can only guess how much rent is involved in the cases that were continued. and the commissioners awarded default judgements. Default judgements don’t mean anything when these tenants and HJP continue to get additional hearings, get the default voided and they stay for another year to continue to destroy the property accrue more unpaid rent and start the cycle all over again. Owners that own modest single family homes or small buildings that charge affordable rents are fleeing the market. Many offer up cash for keys just to get these people out. It is difficult to sell with a non paying tenant occupying the property. Who in their right mind would buy rental stock in Seattle or even King County? It will be interesting to see what new legislation will roll out of Olympia in the next session. Will the entire state become as bad as Seattle?
We sold a rental condo property in 2020 when the renters just stopped paying. There was no recourse. Fortunately, we owned the condo, but still had to pay monthly dues and taxes.
I do work at the Addison. Replacing old wood windows with updated ones. I can tell you that 99% of the units in the Addison are NOT fit for anything living ! 1 of the tenants told me he hadn’t paid his rent in 3 years. His unit was so filthy you seriously couldn’t see an inch of the counter tops and the floors were absolutely disgusting, covered wall to wall with garbage. One day I was their I had to be escorted to a unit by an armed guard. We couldn’t get into the unit because the guard said he man living there would nail 2x4s across the inside of the door to stop the building management from entering. We have to spray ourselves down, head to toe with bed bug spray every time we go there. I have been in a few units that were very well taken care of, but this is not the norm there. Another unit that was empty had human fecal matter on the floor and a huge jar full of urine on the kitchen counter! When you walk into the lobby you would never know what the living situation is like in this building, at 1st appearance it looks like a normal well kept building until you enter the living spaces. I was blown away the 1st time I entered one. There is a sister building to the Addison also that is just as bad, we do work there also but I can’t remember the name of the place
Reading your reply made me feel ill and indignant on your behalf, it sound like you’ve worked hard make this a decent dwelling for those tenants. Sounds like the definition of a thankless job. In Washington state, and in Seattle in particular, we’ve made it very hard to evict anyone, even under the most egregious circumstances.
Seattle needs to start voting Republican if they know what’s good for them, unfortunately only reasonable middle class people would do that, and Seattle is full of nothing but rich and poor extremes. Liberal elites or poor socialists, both vote only Democrat.
So these people took handouts ( tax credits) and now complain they have to follow laws that protect tenants.