Sale of four multifamily properties located in King County closed Dec. 2
WASHINGTON, D.C. – December 3, 2013 – (RealEstateRama) — When a portfolio of nine privately owned Section 8-assisted housing complexes located in five counties scattered across Washington state was offered for sale last spring, the King County Housing Authority spearheaded a collaborative effort to purchase it. The housing authorities of Bremerton, Grays Harbor County, Yakima, and Chelan County and the City of Wenatchee participated in assuring the preservation of a total of 337 homes within the various communities.
The unusual collective strategy – which represents the most wide-ranging state initiative to date to preserve existing subsidized housing – was necessary because the seller wanted to dispose of the portfolio as a single sale. Failure to acquire even one of the nine properties would have resulted in failure to preserve any of the properties. The current owner, who was also the initial developer and long-term owner of the properties, worked with the housing authority to try to assure long-term preservation of these apartments as affordable housing.
“Preserving existing subsidized housing is the most cost-effective way to maintain the supply of affordable rental apartments,” said Stephen Norman, executive director of the King County Housing Authority. “Working with the state Department of Commerce, King County government and housing authorities across the state, we have been able to protect 337 low-income households, the vast majority of them senior citizens, from being forced from their homes – and at the same time, have preserved for the long-term, crucial local housing resources.”
All of the properties are senior housing communities with the exception of two smaller family properties in King County. Four of the complexes are located in King County (147 units), one property is in Hoquiam (24 units), one is in Yakima (51 units), one is in Bremerton (30 units), and two are located in Wenatchee (85 total units). On Dec. 2, the acquisition of the four King County properties was completed. The non-King County buildings will close in separate transactions between the end of December and March 2014.
The four properties acquired by KCHA are: Bellevue Manor in Bellevue (66 units), Patricia Harris Manor in Redmond (41 units), Northwood Square in Auburn (24 units), and Vashon Terrace in Vashon Island (16 units). They are home to 107 seniors, more than 80 percent of whom are aged 70 or older, and 40 families with children.
KCHA is acting as lead purchaser on behalf of the other local housing authorities for the five properties situated outside of King County. The combined purchase price for all nine developments is $28.7 million. At closing, KCHA’s interest in these purchase agreements will be assigned to the appropriate respective local housing authority.
The preservation of these complexes is important because of the populations they serve, their highly desirable locations, and the federal funding they leverage.
The average annual income of residents in the seven senior communities is approximately $10,000. The average annual income of residents in the two family communities is around $14,000. Statewide, the demand for housing affordable to low-income households greatly surpasses the supply and the need is growing, especially for seniors.
Each of the complexes is well-sited, located within walking distance of transportation, shopping and other amenities. The Bellevue site is one-half block off Old Main Street.
The Section 8 contracts that will be preserved through these acquisitions provide about $2.3 million in annual rent subsidies for these units, keeping them affordable.
Between 1965 and 1990, the federal government subsidized private developers to build and operate rental housing for low-income families and disabled and elderly households living on fixed incomes. These developers executed long-term rental subsidy agreements under the Section 8 program. The initial contracts on each of the nine properties in this portfolio have already expired; subsequent short-term contract renewals are due to expire soon. A number of these sites, if bought by private developers, could quickly be demolished or redeveloped as condominiums or high-end rentals.
KCHA purchased the four King County properties using a tax-exempt loan. These properties will continue to be managed by Westwood Management, the current property manager of the complexes.
King County provided $1 million for high priority safety and structural repairs for the four King County properties. These improvements are expected to begin in early December.
“This is an important opportunity to preserve 147 units of federally subsidized low-income housing in King County,” said Joe McDermott, chair of the King County budget and fiscal management committee. “The purchase of these properties will provide a long-term source of affordable housing for low-income seniors and families with children, for which there is a dire need.”
The state legislature provided a $4.5 million housing preservation grant from the Housing Trust Fund to assist with the acquisition of the five non-King County properties.
“This will help seniors live with dignity,” said state Rep. Hans Dunshee, chair of the House capital budget committee, which approved the expenditure. “If they lost their housing because it got too expensive, they couldn’t take a second job to pencil it out. Now they can sleep at night in a safe, stable place to live, which is what anybody would want for their mom or dad, grandma or grandpa.”
King County Properties
Property Address City Units Type
Bellevue Manor 143 Bellevue Way Bellevue 66 senior
Vashon Terrace 17206 97th Pl SW Vashon Isl 16 family
Northwood Square 518 8th St. NE Auburn 24 family
Patricia Harris Manor 16304 NE 81st St. Redmond 41 senior
Non-King County Properties
Property Address City Units Type
Charter House 1307 Wheaton Way Bremerton 30 senior
Harbor Manor 11 10th St. Hoquiam 24 senior
Emerson Manor 702 N. Emerson Wenatchee 35 senior
Wenatchee House 22 S. Buchanan Wenatchee 50 senior
Naches House 314 Naches Ave. Yakima 51 senior
Rhonda Rosenberg, Director of Communications
King County Housing Authority