REALTORS® push for condo reform
Seattle King County REALTORS® President Shane Davies traveled to Olympia this morning to testify in front of the House Judiciary Committee on a new condo law reform bill. “There are zero condominiums under half a million dollars in King County for sale that are less than five years old,” Davies told the Committee. “They’re just not building condominiums anymore.”
Washington’s Condominium Act all but guarantees that developers will face lawsuits down the line by condominium homeowners’ associations, because the law’s strict liability provisions hold condos to a different standard than apartment buildings. As a result, developers aren’t building condos.
HB 2831, sponsored by Rep. Tana Senn (D-Mercer Island), would require that a Board of Directors get authorization from its HOA members before filing any litigation on their behalf. Boards would also have to ensure that HOA members have the chance to find out whether a builder could solve their problems without legal action.
The bill proposes a common-sense approach that favors workable solutions over lawsuits, and it would remove some of the stress, expense, and headache currently preventing developers from building condos.
During his testimony, Davies emphasized that condos are the most important – and most affordable – “missing piece” in the market for first-time homebuyers and other buyers looking for an alternative to single-family homeownership. During the entire month of December (2017), just 56 condos came onto the market in all East King County. In a healthy, balanced market, we’d have four to six months of supply. The supply from those 56 condos in East King County? Just 7½ days.
What’s worse, the condos that are available have been subject to the same rising prices as the single-family market. The median sales price for those East King County condos was $464,000, which represented a 38.58% price increase versus a year earlier. To afford a $464,000 condo (i.e., keep the purchase below three times their annual income), a buyer would have to make $154,667 a year, or $77 an hour.
For most workers and families, those prices are not affordable. The only thing that’s going to bring condo prices down is, of course, more condos.
HB 2831 is an important piece of the answer that can help to get more affordable condominiums built for working families who need a place to live.
Seattle King County REALTORS® has joined other organizations including Habitat for Humanity, East King County Chambers Coalition, and the Building Industry Association of Washington in supporting HB 2831.
View the testimonies in support of HB 2831 below.
UPDATE 2/1/18, 4:08 p.m.: As of February 1, HB 2831 was voted out of the House Judiciary Committee 11-0. The bill is now expected to head to the Rules Committee and then to the House.