(The Center Square) – When it was built in 1911, the Addison on Fourth apartment complex was described as a diamond in Seattle’s International District. These days, the diamond is in default with Freddie Mac, and the value of the property has dropped from $40 million to $10 million. It’s not enough to cover the outstanding debt.
“The road to default is paved with good intentions,” said George Petrie, CEO of Goodman Real Estate. “Housing is complicated; those with modest incomes are suffering the most and the root cause is well-intentioned legislation.”
Petrie and Audrey Riddle, housing director for Goodman Real Estate, were the keynote speakers at the Rental Housing Association of Washington’s annual meeting, which was held on Tuesday at the Meydenbauer Center in Bellevue.
It’s no longer a question of whether there is a shortage of housing, the “only question is the magnitude of the problem,” said Rental Housing Association CEO Sean Flynn at the meeting’s opening session.
The Addison on Fourth was a part of the solution. One of the oldest and most historically significant buildings in the district, it has a steel frame and distinctive terra cotta cladding. After a light renovation in 1969, it had served as affordable housing for more than 40 years.
Goodman Real Estate has invested $26 million in a complete renovation to extend the building’s useful life for another 100 years. The renovation added 14 more apartments, for a total of 254 units, plus artist and musician studios, enhanced common areas, and a gym.
“And then the government influence,” Petrie said. “It’s difficult to overestimate the friction government puts in place and what it takes to overcome it.”
He noted that the increasing pace of changes in landlord-tenant laws was affecting his company’s ability to protect tenants’ rights to the quiet enjoyment of their units without interference.
“Legislation has encouraged unrestrained selfishness,” Petrie said.
One of those changes was the Fair Chance Housing Ordinance in Seattle, which went into effect on Feb. 19, 2018. This ordinance blocked screening for a criminal background, with a few exceptions.
Riddle noted that the law’s good intention was to provide more options for those leaving incarceration. She noted that the outcome at Addison was an environment where residents were forced to live in a community plagued by crime.
Petrie said he checked a sample of 7,000 company records in areas where screening is allowed and found 300 background checks had turned up a past arrest record. Only 30 of those were denied tenancy due to violence or threats to children.
Riddle led a presentation on eight indicators that the project was not meeting the company’s goal of providing safe, clean, affordable housing.
“Legislative measures, despite good intentions, have failed,” she concluded.
The fall symposium featured four tracks providing updates on Rental Operations, Investor Development & Supply, Housing Policy, and Public Affairs & Advocacy. This was the first such gathering since the merger of the Rental Housing Association of Washington with the Spokane-based Landlord Association of the Inland Northwest.
