Tenants at Crestwood Place received a notice in November saying the new owner of the affordable housing building in Rainier Beach was renovating their units and would pay each household $1,500 to move out. If they didn’t take the offer, the letter said, they might get nothing.
The offer was illegal, and even though the city intervened, it scared some renters — those who didn’t speak English or have a strong knowledge of local tenant regulations — into leaving for a worse deal than Seattle law calls for, said residents who stayed.
“They’re not talking to them at all in their language, or sending them any paperwork in their language,” said Benecia Callier, who has lived in the building for 10 years. “A lot of the immigrants have just left.”
The situation offers a worst-case scenario for those who are watching an unprecedented number of affordable housing buildings be sold to the private market to keep nonprofits afloat.
Since last year, Seattle housing providers have listed at least 20 buildings and more than 1,100 units for sale or transfer, driven by a storm of financial challenges. Some of those must stay priced for low-income renters, but Crestwood and others can be converted to market-rate apartments.
The city has spent tens of millions in the last few years plugging nonprofits’ budgets, but organizations say the bailouts haven’t been enough.
New Mayor Katie Wilson said she’s working to stabilize the sector to stem the sales of buildings. In the meantime, she said her staff will better communicate Seattle’s tenant laws so the situation at Crestwood Place doesn’t happen again.
“Building owners have responsibilities to their tenants, and they should not be attempting to skirt the law,” Wilson said in an emailed statement.
Reid Jones, who runs the company that bought Crestwood Place, and Guide Property Services, which he hired, did not respond to a request for comment for this story.
Until now, the consequences of selling affordable housing to private investors were not clear. But at Crestwood Place, residents have reported deception, illegal tactics and harassment in attempts to get them out, and they worry their pocketbooks and bodies won’t be able to take a move.
‘That is not enough money‘
On Nov. 19, residents at Crestwood Place received a letter from Guide Property Services, which had just taken over managing the 26-unit building, giving them 11 days to respond.
If they agreed to relocate within three months, Guide would pay them $1,500, but they’d only get that after moving out and passing a unit inspection.
If they didn’t accept, the letter said, they “may not be eligible for any relocation assistance.”
“I think it’s wrong. I think it’s ridiculous,” said Lola Allen, 84, one of the residents. “I use a walker. I use a wheelchair. How am I going to get out of here and go find me some place to live with that length of time?”
Amira Lions, who has lived in the building for 15 years, said her first reaction was: “That is not enough money to relocate.” Moving out is expensive — first and last month at a new place, movers, application fees — and she would have to front all of that herself. And the inspection would be done by a new owner who could have different expectations than the company she originally signed her lease with.
Guide provided her a list of nearby affordable housing properties to help “ensure a smooth transition.” It showed that a two-bedroom apartment at one cost $950 per month, less than the $1,410 she was paying at Crestwood. She was cautiously optimistic.
But when she looked it up online, she found it was more than twice as much. When she asked Guide about the discrepancy, she said the property manager told her they didn’t have any relationship with any of the properties they listed. Lions said she felt tricked.
“I believe that when you try to deceive someone, it’s because you would inherently believe that you are better than them,” Lions said.
And when she looked on the city of Seattle’s website, she saw that the new landlord’s offer fell short of what she was due. So she filed a report.
On Nov. 26, the city issued a violation to Jones, the owner of Crestwood Place, saying the notice his property manager sent to tenants a week prior violated the city’s Tenant Relocation law in multiple ways.
First, low-income tenants are entitled to $5,354 if they are required to relocate, not $1,500. They must be given 120 days of notice, not three months. And they must receive that money before they are required to leave, not after, and not contingent upon an inspection.
The city also cited a law that “an owner shall not harass or intimidate tenants into vacating their units.” The city instructed Jones to rescind the notice or his company could face legal action and be fined up to $1,000 per day.
Affordable housing crisis
The nonprofit Mt. Baker Housing, which owned Crestwood Place until late last year, had kept rents below market for tenants like Lions, but there are no restrictions preventing the new owner from raising prices. While many of the buildings in last year’s sell-off must remain affordable under contracts with public funders, such requirements have expired for a number of buildings, including Crestwood Place.
Mt. Baker Housing Executive Director Hannah Bryant said the nonprofit had multiple conversations with Jones during the sale process, informing him Crestwood residents were low-income people whose children’s education and access to transportation could be significantly impacted if they were forced to move.
“It’s very disappointing to hear that that would be the story of this building. It’s absolutely the last thing we would want to happen,” Bryant said.
What’s happened at Crestwood could be a harbinger of what’s to come as affordable housing providers face a three-pronged financial crisis they say is forcing them to offload projects bleeding cash.
First, their expenses shot up during the pandemic, breaking the financial projections buildings were designed with. Second, they aren’t able to charge rents high enough to cover their costs because they’re competing with the private market, in which rents have flattened. And lastly, a significant portion of low-income tenants stopped paying rent on time. Many landlords say the pandemic-era protections against evictions convinced many renters they could stop paying indefinitely without consequences.
The strategies to remedy the sector’s problems are as varied as the ailments.
Tacoma recently exempted nonprofit and public housing providers from eviction bans in an attempt to get rent payments back to prepandemic levels, and some organizations are pushing Seattle to do the same.
Under former Mayor Bruce Harrell, Seattle had been providing housing providers with light-touch financial infusions, hoping to weather the storm until market conditions allow affordable housing landlords to raise rents.
And current Mayor Katie Wilson has proposed an idea to provide affordable housing providers more money in exchange for housing homeless people — an attempt to solve two problems at once.
Bryant said Mt. Baker Housing had not wanted to sell Crestwood Place, but said that as long as nonprofits faced systemic financial challenges, those would trickle down to the low-income families they serve.
Lions worries about other tenants in buildings like hers that were sold and are now exposed to the harsh realities of the private market.
“I’m wondering how many tenants are affected in this way, being lowballed and being coerced into abandoning their apartments before they have to,” Lions said.
Physically not an option
Since Crestwood Place was sold, longtime tenant Callier said the new owner has scheduled and canceled unit inspections multiple times, collected rent from her two days earlier than it was due, and neglected to clean up garbage and furniture piling up near the dumpster after multiple tenants moved out.
“They tried to make it as untenable as possible to live here,” Callier said.
When a Guide Property Services employee came by to formally rescind the earlier offer, as required by the city, she said he told her verbally the offer to voluntarily move for $1,500 was still on the table.
“It was inappropriate, it was low. Everybody in here is low income, and we’re also older, and a lot of people in here are sick,” Callier said. “It just kind of hit me wrong like ‘Hi, I’m your new landlord. Get out.’ ”
Callier will soon have to move anyway. Jones is moving forward with remodeling 11 units at Crestwood Place. After receiving the violation in November, he applied for a tenant relocation license with the city the next month, which will require him to pay more in relocation assistance than he initially offered.
But for Callier, the cost of moving is just one of her concerns. She has lupus, heart issues and degenerative bone and joint disease. She had a few strokes at the end of last year and is still recovering from surgery. That makes the physical process of moving itself daunting.
“I’m really nervous that I’m gonna have to leave before I get well enough,” Callier said. “Physically, it is not an option at this point.”
