Breaking down barriers to small condominium construction
Washington REALTORS® (WR) has made the improvement of condominium construction financing a top priority in 2021.
Demand for new condominiums continues to exceed available supply, especially for first-time homeowners and those seeking to downsize.
According to NWMLS, the median price for a condominium was $430,000 in 2020, for the 6,884 units sold in King County. The Seattle and Eastside medians are 30% higher, but still significantly more affordable than the $725,000 price for a single-family home. Condo purchases represent 20% of all residential sales in King County.
New legislation, SB 5024, provides that condominium buildings under 10 units and two stories receive an exemption from the requirement to conduct multiple building envelope inspections. The 10 unit – two stories threshold allows for the same construction inspection methods used for a single-family home without the extra requirements that add costs to building condominiums.
SB 5024 also improves the condominium construction process by allowing a portion of deposit funds to be used for certain unit construction costs, which will improve the financing process.
“This bill helps make it easier to develop and finance condominium construction so that more affordable housing can be built,” said Eddie Chang, 2021 VP Governmental & Public Affairs for Seattle King County REALTORS®. “This bill also removes some red tape for small condo projects and relieves some of the financing burden to help make housing more affordable.”
Senators Mike Padden and Jamie Pederson, along with WR lobbyist Bill Clarke and REALTOR® members Eddie Chang, Michael Orbino, and Bill Riley have worked to move this issue forward for consideration. SB 5024 has passed through its Senate committee and will be eligible for a floor vote in the State Senate next week.
Update as of February 12: SB 5024 has passed Senate Chamber and is now in the House.