Sightline had an interesting report recently about displacement of older (presumably more affordable) homes by new development. They looked at 19 apartment complexes built in Seattle (all of the 8+ unit developments the King County Assessor considers as built in 2016). Those developments created 1,764 new homes while displacing only 21 older homes, a compelling 84-to-1 ratio. 12 developments on former commercial sites did not displace any older homes at all.
That’s great news, but what’s this? In Bellevue, the King County Housing Authority stepped in to buy a 76-unit apartment complex that was to be demolished for 87 town homes. Rents at Highland Village Apartments average $1,200 per month, well below the average Bellevue rent of $1,930. The KHCA spent $20 million to buy the complex, located on NE 8th St between Downtown Bellevue and Crossroads. The KHCA will now renovate the apartments, maintaining rents near their current level.
The Sightline report reminds us that development generally expands supply and is mostly good for affordability. But the story of Highland Village is hardly unique. It may be more typical in a certain kind of pricier suburban community. Highland Village look like hundreds of other older multifamily developments in this region. Two stories; on an arterial but not in downtown; surrounded by surface parking; in a low-rise neighborhood where the zoning will not permit much greater height or density (and perhaps not the market either). Rents are lower because the buildings are depreciated. Older small single family houses may get more sympathetic news coverage because they appeal to boomer nostalgia, but older multifamily units are the most affordable unsubsidized homes in most cities.
Like Highland Village, many older apartment buildings are ripe for redevelopment to higher-priced homes.