The vote for the condo-conversion bill, with support from various stakeholders, did not come to be. Frank Chopp, Speaker of the House, wouldn’t allow the bill to come to the floor for a vote, per the PI. Apparently, it didn’t make the cut off date to pass legislation. Read the full article - Efforts to protect tenants fail.
Recently, Seattle and much of the its Puget Sound neighbors have seen a proliferation of condo conversions. This has been a boon to first-time home buyers as conversions have been among the most, if not only, affordable in-city housing available.
The media, of course, focuses on the negative aspects of conversions - the displacement of tenants, particularly the elderly and low-income tenants. And, they have a point. Current laws only require developers to provide a 90 day notice, and for low-income tenants, $500 towards moving costs.
That imagery and special interest groups help get several bills into the legislature this year. I favor more compensation to displaced tenants but the early version of the bills were drastic - increased assistance payments to $2,500, implemented conversion caps, increased the notification period to 120 days, and banned construction work during the 120 day notification period.
According to the Seattle PI, the legislature and community interests have come to a compromise on legislation to place restrictions on condo conversions. The compromised version is watered down from the initial bills but still provides more assistance to dislocated tenants. Some of the changes include:
For more info: Substitue House Bill 2014 & Substitute Senate Bill 5031
Related post: Cost of Conversions
The Washington State Office of the Insurance Commissioner (OIC) released a report on the use of inducements and incentives by Title Insurance companies operating in Washington. The OIC’s investigation found a number of Title companies that use these methods to steer business to their respective companies. The beneficiaries of these inducements are, for the most part, real estate agents.
The full report can be found on the OIC’s website or clicking here (PDF). Under state law, companies may provide incentives up to $25 per person per year. The report found, however, that several companies routinely exceed this amount, sometimes by thousands of dollars. Unfortunately, per an OIC press release, the OIC will not pursue enforcement or punishment of the wrong doers. Instead, they will implement an educational campaign. I think that’s a wrong decision. Certainly, addressing the problems and educating Title company personnel is the right step forward, but blanket forgiving serious violators sends the wrong message. Without enforcement the rules are meaningless.
Fortunately, these types of inducements are also regulated and enforced on the federal level via the Real Estate Settlement Procedures Act (RESPA). RESPA has teeth and resources that the OIC lacks, so I would hope that they would look into the violations identified by the OIC and issue appropriate remedies.
The question, then, as an agent, have I benefited through such incentives and inducements? I have never received a kickback, a free lunch, a trip or tickets to a sporting event. But, there has been occassions where a title company representative provided bagels at a staff meeting or bought a cup of joe. In that respects, then, yes I’ve benefited, but they’ve been well under the $25 limit.
John L. Scott, along with a few other real estate companies share ownership in a title company, however, I do not include that company when providing clients a list of suggested title companies. When requested, I provide clients with recommendations for mortgage lenders, escrow and title services. However, I base my recommendations on the professionalism of those individuals, their knowledge and their ability to manage & close the transaction smoothly. That, to me, is far more valuable than a double tall mocha.
Kickbacks, rebates, incentives and inducements are serious issues in this industry. Violations increase negative perceptions which hurts the industry as a whole and provides unfair competition, especially when a few agents receive substantial subsidies at the expense of consumers. To that end, I support any steps that’ll clean up this practice.
A while back I wrote a post about the human cost of conversions with the new owner/developers only needing to provide 90 days notice and $500 to displaced tenants. It looks like the increasing number of conversions, and thus, more displaced tenants, who undoubtedly are unable to afford to purchase the snazzy conversions, are getting noticed by the politicos. From the PI’s Forced Out Tenants article:
(State Senator) Fairley’s plan would ban construction, remodeling or repairs during the required advance notice period for conversion or until at least 12 hours after the last tenant moved out. It also would increase the minimum payment to $2,500, then adjust it each year for inflation.
It would allow cities to cap the number of apartments that could be converted to condos each year and extend the notice period from 90 to 120 days.
I personally don’t fully support the current proposal, but I applaud steps to protect tenants and to fairly compensate them when they’re displaced due to a conversion. Conversions, after all, is a business venture so it does need to be economically feasible to the developer and to provide needed housing units for would-be home owners.
Spotlight on Queen Anne:
Single-family houses and condominiums in the area that includes Queen Anne had a median price of $483,000 in June, up 13.7 percent over the past year, according to the Northwest Multiple Listing Service.
A friend of my regularly rents art work from the Seattle Art Museum, and it seems home sellers and stagers are too:
Museum officials say they’ve seen a spike in their art-rental business thanks in part to home stagers, who redecorate houses in hopes of boosting sales prices and increasing the odds of selling.
The Farm Bureau sponsored property-rights initiative I-933 is going at it alone:
powerful allies from 1995 either are sitting on the fence, decided to remain neutral or have embraced Initiative 933 only half-heartedly
First Methodist Church on 5th Avenue gets a reprive:
Church leaders have turned their focus to another local developer, Nitze-Stagen, which would build a thinner tower leaving room for the 1910 church featuring a red-tiled dome, brick walls and stained glass.
Another ornate church on Capitol Hill is getting a new life as upscale condominium homes.
No sense reinventing the wheel…just head on over to Marlow’s 360 Digest regarding Redfin CEO Glenn Kelman’s recent field trip to hallowed-halls of Washington DC. Kelman spoke at a hearing before the US House of Representative’s Subcommittee on Housing and Community Opportunity on the “Changing Real Estate Market” (ie attacking the privately owned MLS’).
The prepared statments can be found on the subcommittee’s website.
