A refuge or an investment?

Some of my favorite memories are childhood visits to my great aunt's house on a quiet, tree-lined street in Lakewood, Ohio, a densely-populated suburb on Cleveland's west side.

Much of the housing in that sweet, small-town community consists of large family homes, handsome brick apartment buildings and cozy duplexes. Almost every residence sports a front porch where, in nice weather, people can lounge, offer a friendly word to a passing neighbor and watch the world go by.

In the summer my parents would drive me for an overnight to see La-La, my great aunt, and Rhea, her unmarried daughter. My mother grew up on Parkwood Avenue, in the lower half of the duplex where Rhea and La-La lived.

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When I arrived in Seattle in 1986, Capitol Hill reminded me a lot of Lakewood. After one year living on the edge of the Central District, a friend leaving town offered me first dibs on her 15th Avenue walk-up apartment. When I saw the western views of downtown, the Space Needle and the Olympics in her third-floor living-room windows, I needed little convincing.

The monthly rent of $425 for a spacious, two-bedroom apartment, split between my roommate and me, seems like ancient history. I celebrated my 25th birthday there. I continued to live there while finishing grad school at the University of Washington and again when I completed a backpacking trip in Europe. The place became my refuge as I made transitions from my 20s into my 30s.

I began thinking about my various experiences of home after I read a recent report about the skyrocketing number of apartments sold for condo conversion over the last 18 months. New York consulting firm Real Capitol Analytics recently reported in USA Today how last year 70,800 apartments were sold to condo developers, a nearly tenfold increase from two years earlier.

As of June 1, an additional 43,900 units crossed into the hands of developers. The trend is accelerating in places like southern California, northern Virginia, Miami and Las Vegas. But as property here becomes more scarce and land more expensive, Seattle likely will follow suit.

My gut reaction to this development is alarm and a growing concern. While many people view the conversion of apartments into owner-occupied condos a welcome opportunity for people to become homeowners, I'm uncertain the deal is sweet for everyone.

First, the loss of rentals can lead to the displacement of working people and families unable to make a downpayment on a home, cover the mortgage or qualify for financing. The article points out that programs in Alexandria, Va., and San Diego often provide displaced renters with interest free loans and three months of rent for a down payment on a home or rental. But maintaning a property, especially in an older building where condo conversions are most common, is expensive.

Another development in the condo craze is the popularity of "flipping" real estate. In hot markets like Miami and San Francisco, new condos are traded like commodities on the stock exchange. In Miami, properties under construction are sold online based on view and cost per square foot. A website arranges sales in bulk and collects the commission, bidding up the price of a desired unit until the next purchaser comes along, finds a "value" property, and bids again. Benefits accrue to the speculator, developer and bank all before the condo units are completed.

When did "home" become interchangeable with stocks, bonds and annuities? With low interest rates and sizable increases in value, especially along the coasts, money is following the return. Now we trade houses for appre-

ciation, even if we don't intend to ever live in them. My moral barometer says there's something very wrong here.

In 1996, I decided to make Seattle my permanent home. I'd saved investments for a downpayment and gratefully accepted a generous gift from my parents. I knew I wanted to live on Capitol Hill and feared if I waited too long I'd be priced out of the market. The thought of multiple competing offers made me feel sick to my stomach, but I jumped in and eventually found a place I've grown to love. It has become the place where I can rest my head and my heart.

It might sound insane, but I get tired of hearing about how much real estate in Seattle continues to skyrocket. People keep saying it's good for you, you're already in the market. But I keep wondering if the only people it's good for are real estate agents and developers who benefit from the escalating costs of a home. My question is will I ever be able to afford anything else, even with my partner, if I choose one day to sell my cozy one-bedroom condo near all the places I love: my work, my market, my church and the beach, only a 15 minute downhill bike ride.

I enjoy living on my tree-lined street on 16th Avenue, where dog-walkers are common and people wave to you from their porch, balcony or back deck. The 1920s building with a brick walkway, fountain and lovely backyard is my home. When I enter through the garden gate I feel relief to hear the sound of the trickling water, or a light wind in the trees. I can close my eyes and think back to those summer nights on Parkwood in the 1970s with La-La and Rhea sitting on the front porch overlooking the street below. Root beer floats in our hands, we'd watch the world go by, happy in our sublime universe.

Capitol Hill resident Jack Hilovsky's column appears in the second issue of each month. He can be reached at editor@capitolhill times.com.

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