Urban Refugees: The 1978 Housing Crisis

In the middle of an intense housing crisis, Seattle City Council established a six-month moratorium on condominium conversions with Ordinance 107500 on July 17, 1978. The voices of the real estate industry, builders, citizens, advocacy groups, City Council, and Mayor Charles Royer all help tell the story.

The Back Story

The Boeing Bust of the early 1970s dealt a major setback to Seattle's economy. The end of the space-related Apollo project, the cancellation of the government supersonic transport program (SST), and an overall recession in the aviation industry forced Boeing to reduce its workforce by 60,000 between 1970 and 1971. This economically devastating local event, coupled with the 1973 global oil crisis, forced an overall downturn in investment and construction; during these years, Seattle had the highest national unemployment rates since the Great Depression, peaking at 12%.

Since builders could not procure financing, the building of new rental units in Seattle thus stopped through the mid-to-late 1970s.  Meanwhile, new arrivals in the city were able to buy into a deflated housing market, reducing the overall number of homes on the market available for purchase. Concurrently, state and national housing and condominium laws - notably Section 234 of the Federal Housing Act of 1961 - made it possible for apartment building owners to convert their units to condominiums, which could then be sold off one by one. This further reduced the availability of rental apartments and displaced tenants who did not have the economic means to buy.

[Condo advertisement Seattle Times September 19, 1974Condo advertisement Seattle Times September 19, 1974
Two notices for condominiums in the Seattle Times classifieds, September 19, 1974, D7.

 

This housing crisis in Seattle came to a head in the late 1970s. Certain areas of town, including the University District, had no apartment vacancy rates; North Seattle, West Seattle, Fremont and Wallingford all stood below 1% vacancy.

These maps from a July 1, 1978, report for Mayor Charles Royer, document the steep rise in condominium conversions.  The maps show conversions prior to 1977, in 1977, and in 1978. By 1978 conversions had almost doubled.

Map 1 prior to 1977Map 2 1977Map 3 1978
Box 13, Folder 10, Charles T. Royer Legal Subject Files (Record Series 5274-03), Seattle Municipal Archives

 

The May 17, 1978, Public Hearing

The work program for the 1978 Urban Development & Housing Committee (UDHC) of the Seattle City Council was to "consider and make recommendations on matters relating to comprehensive planning, zoning, neighborhood and business district revitalization, housing, special review districts, historic preservation, urban design, and environmental procedures."

Spurred on by the housing crisis, which was beginning to gain media traction, the UDHC held a public hearing on May 17, 1978, to listen to the opinions of members of local and state government, citizens, social advocates, business owners, and industry members. The topic at hand was the condominiumization of apartment buildings; that is, the conversion of apartments into condominiums that could be owned as property.  As such, tenants who could not or did not want to buy their apartment were displaced, and hard-pressed to find new housing opportunities. The vacancy rate for apartment buildings was reported at between 1% to 1.5%. The joint public hearing was the first time in Washington State that city government and the State Legislature held a joint hearing on urban policy.

The hearing in City Council chambers, chaired jointly by Councilmember Michael Hildt and State Representative Bill Burns, was well attended and lasted over three hours. Over 200 people were in attendance (including many elderly tenants), making it one of the largest crowds to attend a City Council meeting at City Hall. (However, much of the rest of the city was focused on a playoff basketball game between the Sonics and the Portland Trail Blazers that evening.) Statements from the offices of Seattle Mayor Charles Royer, State Representative Will Knedlik (Chairman of the Landlord Tenant Subcommittee in the House of Representatives), and Senator Al Williams were made as well.

City Council Chambers
City Council Chambers, Municipal Building, 1962.  Item 78835, Seattle Municipal Archives

 

Of the 57 people who testified, 42 favored legislation restricting conversions, and 15 (mostly building owners and developers) opposed regulation. City Hall staff member Younghee Kim, summarizing the events of the hearing in an internal memorandum to Michael Hildt and members of the UDHC, noted: "Another point repeatedly made by groups both opposing and favoring regulation was that the City should address the causes of housing displacement rather than the symptoms." (Memo dated May 31, 1978, 5274-03 13/10 Office of the Mayor Charles T. Royer, Legal Counsel Files, Record Series 5274-03 Box 13/10)

Though the issue of housing availability and the practice of turning apartments into condominiums had received some prior attention - letters to City Hall, for example - this hearing was the starting point of an active and systematic two-month political process, from meetings with constituents, to research and reports, to procuring legal counsel, as well as the evolving and growing media coverage.

Different viewpoints surrounding condominium conversion and the housing crisis can be heard in the recording of the hearing.

Apartment Owners, Real Estate, and Builders

The hope of emerging from the economic stagnation of the early 1970s, spurred on by the legalization via state and national housing and condominium laws to convert apartments into condominiums, help explain why the number of apartments converted to condominiums or slated to be converted in Seattle nearly doubled between 1977 and 1978.

Most industries affiliated with real estate - builders, rental owners, homeowners - were in favor of condominiumization for primarily free-market economic reasons. They took the stance that the housing shortage in the rental market was not a result of condominium conversions (around 1.2% of the apartments available), but rather of the overall economic downturn and high inflation.

But individual testimonies at the May 17, 1978, hearing also show variation, understanding, and a willingness to work with the City and with tenants. The statements of realtors, builders, and apartment owners vary in nature from defensive, to understanding, to conciliatory - viewpoints understandable in the context of an economy that was beginning to pick up.

Terre Harris, Director of Technical Services for the Seattle Master Builders Association, spoke measuredly, noting that there needed to be a balance between allowing conversions and sales on grounds of free enterprise, and protecting those who could not or were not interested in buying. He concurred that the Seattle Master Builders Association would work with the city to find a reasonable solution to the problem:

"The problem is a fragile one. The free enterprise system is the foundation upon which this country was built. How do you, on the one hand, tell an owner he can convert, and on the other, another owner, when all else is basically the same, that he cannot. The condominium offers a very viable alternative for home ownership for those who for whatever reason can't or don't want to afford a single family detached home. On the other hand, how do you answer that problem, and at the same time protect the interests of those who for whatever reasons - economics or preference - choose not to buy, and still have the right to a decent and affordable place in which to live but who are displaced by condominium conversions. This is especially true in the case of the elderly and those on fixed income. Super restrictive legislation can only have a negative impact on our community. Whatever evolves from this hearing and subsequent hearings should answer all the facets of the problem, and not just that which is most in focus at this time. Seattle Master Builders offers again our time, our energy, our experience in working towards that, a reasonable solution."

Bruce Lorig, a Seattle apartment complex owner and real estate consultant, chimed in about tenant displacement, but underscored heavily that causality lay with inflation, not with the owners. Since apartment rental rates had stayed well below inflation, he argued, there was an economic need for many apartment building owners to convert their units into condominiums.

"The primary cause is inflation. And the responsibility of inflation is the Federal Government. In recent years, we have experienced very high inflation rates. Building costs have increased. It has been accompanied in dramatic increases in the value of older buildings, and I think we are all aware of the price increases in single family homes here in the City of Seattle. During this inflationary period a very unique thing has happened in the apartment industry. Rental prices have not gone up proportional to inflation. The statistics are available, but they generally show, in Seattle and across the country, that rents have risen about 2% per year over the past five years. That's considerably below the rate of inflation. The apartment industry has generally held down rents and is really a good example of a competitive free market system serving a consuming public very well. However, this situation cannot continue. The economic pressures are getting very intense. Eventually the price paid for housing must reasonably equate with the value. And I think we are already aware that price increases are coming."

And Clifton C. Albright, President of Albright Realty, underscored the benefits of condominium conversions: the creation of condominiums enabled people to get into the real estate market who might otherwise not be able to. He conceded that there would have to be legislation regulating which buildings could be converted, protecting especially low-income tenants.

"There are many benefits to the city for the conversion of condominiums. It stabilizes the area because of pride of ownership. The buildings are improved, and things of that nature. It also raises the tax base, and that is something the city is always looking for, is more money to be able to use. No housing is being taken off the market, they are just being substituted for buyers. It also provides permanent housing for the people that want to buy. Condominiums and apartments are energy savers. And condominiums and energy savings will be with us forever.

"Now, what can we do for the tenants? New construction requires that we have one for one parking. I think the buildings that are being converted where they would affect the low income and the elderly would be buildings that have no parking whatsoever. I think that should be something that the council might want to consider. We can give people more time to move. I think it is too bad where people feel like they have to be pushed out of their unit because I know that it would be a traumatic experience. We can make it easier to find housing, and I was at a meeting yesterday where members of the building industry and the private home owners association were meeting together to see what we could do to try to [do], to feed information back and forth, because people do have housing available. And we can have controls for older buildings. There are many buildings that are being converted to condominiums that should not be converted and they are appealing to the low price market, but they really are not appropriate for condominiums. And that's all I have to say and thank you very much."

Ruth Campbell June 1978r Campbell July 1978
Displacement of the elderly was one of the biggest problems of the conversions. Ruth Campbell, 85, voiced her concerns at the public hearing. She and her husband were forced to move twice in one year, and faced a third move due to a condominium conversion. The Seattle Times ran articles on Campbell on June 21st and July 17th, 1978.

 

Some real estate owners, such as Felix Reisner who had just converted six of his units to condominiums, were heckled by the noisy audience. Not infrequently the crowd had to be reminded to be civil and respectful of the speakers.

The majority of the crowd at the hearing that day clearly expressed affiliation with the tenants who faced eviction and relocation, even though many industry speakers conceded the need for regulation. In the months that would follow, Mayor Royer's office would field numerous meetings with members of the real estate industry.

Social Advocacy Groups and Concerned Citizens

Though tenant needs were acknowledged by business owners at the hearing, and there was considerable effort to present a stance of amenable cooperation with legislative action and the City of Seattle, much moving testimony came from advocacy groups and citizens (especially young families and the elderly).

More than two dozen individuals testified in a crowded room about their situation and worries: de facto eviction, sometimes consecutively, from apartment units which were put up for sale by the owner. Without the means to buy, and the rental market at a historic low inventory, many young families and seniors felt displaced. Hundreds of individuals and families were faced with the tough task of finding - and being able to afford - alternative housing.

At the hearing, several concerned tenants pointed out that they were left with no choice in the matter, which some felt violated their basic rights.

Mrs. Fred Young framed her argument in terms of being stripped of choice, and noted that, even if she and her non-ambulatory husband had the financial means, they would not choose to buy.

"There are two things that are really very pertinent where I am concerned. One is that all the talk I've heard here tonight, and all the things I've read, no one has mentioned the fact that always in America we have had choice. I have been married 60 years, my husband and I have always lived where we wanted to live provided we could afford it. This condominium thing is completely doing away with the citizen's choice, because if you are not wealthy, and if you do not have a great deal of means, you are limited to as what you can pay for provided you are honest and pay your bills. I think Americans, and particularly in this beautiful city of ours, I think we should have the liberty of choosing where we live and how we live. There are many young people who want to live in houseboats. There are many, I happen to know many young girls who are working, who have wanted to buy little homes. They bought them in the city, they bought them over across the lake. There are many people who want to live on a farm. My husband and I happen to want to live in an apartment. He is 92 years old, he hasn't many years left because he is no longer ambulatory. We do not want to own an apartment or own a condominium. We haven't the money to do so if we did wish to. But we do have the means, because we have saved all of our lives, we do have the means to live in a decent apartment house. And this condominium fad that has come on, just recently, we were told that if we wished to stay where we are, we could buy the little apartment we have - we have no dining room, we do have a living room, two bedrooms, and two baths. Not large, but they are comfortable for us. We could buy it for $66,000. [whistling in audience] We don't have $66,000 to buy property. If I had 66,000, I wouldn't be buying property. I'd be doing a few other things that I am not doing at the present time."

One tenant - Margaret Thornton - even described herself as an urban refugee in light of being displaced from her rental apartment in Seattle.

Advocacy groups, including Seattle Emergency Housing Services and the Seattle Tenants Union, were equally well represented at the hearing, calling for an immediate moratorium on condominium conversions. In other words, as a stop-gap between actual condominium legislation and the present, advocates wanted an immediate halt to protect tenants' rights.

In this vein, Cory Schaetzel from Seattle Emergency Housing Services pointed out:

"Seattle Emergency Housing Services supports a moratorium on condominium conversions which are displacing Seattle citizens into a housing market where they cannot compete. Seattle's 1% vacancy rate, increasing rents, and inflated purchase prices impact all Seattle's residents. But the greatest hardships are borne by low and moderate income people who depend upon rentals for shelter. Seattle Emergency Housing Services completed a survey of affordable rental housing for low income families in March of this year, and concluded then that there was a rental crisis in Seattle. Since March, the situation has worsened. At Seattle Emergency Housing, we receive 200 calls per month from families in need of our services who...we are unable to assist due to lack of space and rental resources. 100 of these callers are in need of emergency shelter. Many are living in cars, or campers, or are crowded into substandard housing with other families. We urge the city to recognize the plight of low and moderate income residents in Seattle and enforce a moratorium on condominium conversions which are displacing Seattle citizens into a housing market unable to absorb them."

The displacement issue of tenants because of condominium conversions was one of the first time the fledgling Seattle Tenants Union (TU), which incorporated as a non-profit organization in 1977, received political and media attention. Its charter was to fight for tenants' rights in the face of "widespread substandard housing conditions and lack of decent, healthy, affordable housing.

At the hearing, Sharon Feigon from the TU noted the following:

"It is clearly evident with our work that Seattle tenants are faced with an intolerable situation. We receive calls daily from tenants who have received rent increases of 25-50%, sometimes as high as 100%. Other tenants are presented with 20 day notices, which is all the state landlord-tenant act requires, to vacate their homes. They are thrown into the streets to seek affordable housing which does not exist. In the past year, over half the calls that the Seattle Tenants Union received about evictions were for evictions without cause. The elderly, families with young children, low, and even average income tenants simply cannot afford higher rents, let alone the costs of relocating. Older tenants, on fixed incomes, and often even physically unable to search for new housing, are irreparably devastated by these kinds of evictions. In the past week, I have spoken to many tenants in this kind of situation.

"The city has not formed any consistent and comprehensive policy to safeguard rental housing. Instead, an incompatible assortment of conflicting policies have deepened the city's housing crisis. On the one hand, Seattle has stated a commitment to provide low-cost housing and the protection of our neighborhoods. On the other hand, revitalization of neighborhoods such as Pike Place, Pioneer Square, Denny Regrade and Broadway have shown, at best, neglect of our needs. At worst, the rapid construction of condominiums and high rent buildings betrays an unstated policy of the less affluent of America's most livable city. Revitalization must be made beneficial to the neighborhoods now being revitalized."

City Hall: Crossfire, Constituents, and Legislation

What is apparent from the repeated tenant and advocacy testimonies - and what would have become very apparent very quickly to the UDHD and, by extension, Mayor Royer's office - is that a relatively small percentage of displaced tenants, facing eviction and displacement, could be very vociferous and effective in their organizing. After the May 17 hearing, the Office of the Mayor held meetings with industry and tenants and had advisory sessions with consultants and lawyers, culminating in a six-month moratorium on condominium conversions with the passage of Ordinance 107500 on July 17, 1978.

STime condo article
The Seattle Post-Intelligencer published "The Condo Question" after the ordinance authorizing the six-month moratorium had passed. "Seattle might have a housing emergency," it reported, "but it will be hard to prove, in numbers, that condo conversions have caused or exaggerated a housing shortage." Seattle Post-Intelligencer July 16, 1978.

 

The Senior Advocacy Coalition held regular meetings to discuss the problem of condominium conversions.

signin sheet August 14, 1978
Sign-in from Senior Advocacy Coalition, August 14, 1978. Signatures include Ruth Campbell, Sharon Feigon, and Nick Licata.
Box 13, Folder 11, Charles T. Royer Legal Subject Files (Record Series 5274-03), Seattle Municipal Archives

 

The TU and other groups continued to meet after the moratorium was passed to ensure appropriate and effective legislation would protect tenants' rights after the six-month moratirum was lifted.

Flyer 1978
Seattle Tenants Union Flyer, August 1978.
Box 13, Folder 11, Charles T. Royer Legal Subject Files (Record Series 5274-03), Seattle Municipal Archives

 

Outwardly, the Mayor's Office took a firm stance that they held to the belief that everyone had a right to decent, affordable housing. The Mayor emphasized this in a statement read by staff member Bob Royer, his brother, at the May 17 hearing.

"Seattle is thought of as being a city of single-family houses, but the fact is, that nearly a third of our people are tenants in multi-family housing. The increasing number of conversions to condominiums from rental housing has made a substantial number of our citizens uneasy, and growing numbers of them are communicating their concerns to the mayor. Among the fundamental responsibility of society is the provision of shelter. The mayor is concerned that a great many people who lose housing through conversions are having, or will have, special problems in finding decent, affordable replacement housing. Today's hot market is a sellers' market. The middle-to-low income groups and those on fixed incomes often can't afford to buy the space they now rent. Subsequently they cannot find other housing.

"It is a compelling coalition forming, as you can see from the people in the hall. It is a coalition of the elderly to whom we owe so much, and of the young, the new families, just beginning, on whom we, in the city, depend so much. It is a potentially powerful coalition and one to which government, as well as the private sector, must respond. The mayor believes that it is best to respond early, as you have done, and positively. This is an issue around which confrontation can quickly develop.

"We long ago discarded the notion that the full benefits of citizenship depend on the ownership of property. It is in everyone's interest, landlord and tenant alike, to ensure that a range of housing opportunities exist for a range of incomes and people. Accordingly, the mayor is delighted that Councilman Hildt and Representatives Burns and Charnley have taken the initiative on this issue. Early diagnosis and treatment of this problem is the best approach."

The Mayor's office realized, however, that reaching a compromise between tenants' and industry needs would be a balancing act. another public hearing was held on August 29, 1978, after a series of meetings by the Condominium Task Force. As the date approached when the moratorium was to end, Councilmember Hildt held another public hearing on August 29. The Condominium Task Force met during August and different proposals were solicited from the different groups. Ruth Campbell was on the Task Force, as well as representatives from the Seattle Apartment Operators, Seattle Master Builders, Evergreen Legal Services, and the Seattle Tenants Union. Agreement could be reached on right of first refusal, a notice period, relocation assistance and certain disclosures. The major groups (Board of Realtors, Tenants Union and the Mayor) disagreed on the issues of controls regarding when conversions would be permitted and how strict the controls would be on the process.

The Urban Development and Housing Committee voted not to extend the moratorium on September 14, 1978. On October 3, 1978, City Council passed Ordinance 107707 effectively allowing the moratorium to expire, as planned on November 6, six months after it was enacted. Apartment tenants were required to receive 120 days' notice and first right of purchase in condo conversions. UDH Committee Chair Michael Hildt believed the ordinance would "prevent abusive practices and greatly improve tenants' chances of either purchasing their aparments of finding replacement housing." He admitted that the problem of those who lost their housing was not solved. "The committee has left unsettled the plight of displaced teants, many of whom are elderly, low-income persons."

The discussion on housing continued into 1979, but with little resolution. At an April 1979 Council meeting, Councilmembers Hildt and Rice stated that rent contol had not worked out well in other cities, a point some in the audience disagreed with. Some members of the public suggested the City become involved in apartment rents.

In May 1979, King County Council approved an ordinance controlling condominium conversions, requiring developers to give tenants up to four months in which to decide to buy their units or move out. The law also required developers to pay renters who opted to leave $350 or the equivalent of two months' rent, whichever was greater, in relocation aid. Reflecting the national scope of the problem, King County Council sought and received federal funds to provide financial assistance to enable low-income elderly persons to purchase condominium units as well as funds to purchase condominiums for low-income elderly to rent through the Seattle King County Housing Authority.

In 1980, Initiative 24 was placed on the November ballot. It proposed the City regulate residential rent increases through a new board and restrict certain evictions, condominium sales and housing demolitions. It failed by a vote of 80,587 to 163,140.

Cat Condo
Seattle Times, July 29, 1979

 

A recording of the entire public hearing held on May 17, 1978 is here.  Please cite: Event 4620, Seattle City Council audio Recordings, Record Series 4601-03, Seattle Municipal Archives

Much of the research for this exhibit performed by UW Information School student and volunteer Johanna Jacobsen Kiciman.