Earlier this year the Washington State legislature passed a condo conversion bill that I had supported. The bill provided local municipalities the ability to set the tenant relocation assistance amount, extended the tenant notification period from 90 to 120 days and prohibited any work until after tenants vacated the property.
Effective August 1, 2008, the following changes to the Seattle Municipal Code, as a result of the conversion bill, take effect:
- Developers will be required to provide relocation assistance equal to three month’s rent to tenant households earning 80% or less of the median income based on household size. Previously, state law only provided $500 in relocation assistance to low-income tenants.
- Elderly (65 and over) and special needs tenants can qualify for an additional $1,500 in relocation costs, if they are otherwise eligible to receive relocation assistance.
- Developers are now required to provide (1) information regarding payment of the relocation assistance and (2) relocation information packets to tenants.
Relocation assistance is only available to tenant households that do not elect to purchase their units. Relocation funds are paid directly to eligible tenant households by the developers, who pay 100% of the costs.
The bill had two primary purposes – to reduce the number of conversions and to provide an adequate relocation assistance amount to tenants in need. Based on the state bill and the city’s ordinance, it appear those objectives will be met. The market has corrected the condo conversion boom on its own and based on the current market conditions as well as the added cost to convert, we may see fewer conversion projects in near future.
