Hot Ticket
One Virginia county tries to protect its affordable apartments from converters. Barbara Favola, a member of the Arlington, Va., board of supervisors, always believed that the best scenario for keeping housing affordable was a residential market saturated with rental properties. While this doesn’t always make apartment owners happy, it keeps the supply and demand in renters’ favor.
Unfortunately for Favola, what’s happening in her county is the exact opposite. Arlington, a suburb of Washington, D.C., is in the middle of one of the biggest condo conversion markets in the country. The conversion trend is sapping the metro area’s rental supply, especially in the affordable market. Washington isn’t the only area facing this issue, though. As conversions grow in popularity, other localities are trying to limit them. In California, a flood of conversions have led areas like Orange County and San Francisco to consider limiting or actually limit conversions.
While the converters and apartment owners are profiting from a strong market, many apartment residents are losing their homes as a $1,000 rental suddenly becomes a $300,000 condo with a mortgage payment beyond their means. Arlington tried to address this problem through homeownership programs and facilitating the purchase of condos by nonprofits. Neighboring Alexandria, Va., provides a number of $30,000 no-interest loans to help renters of converted apartments buy their units. Fairfax County, also in Virginia, is designating a penny of the real estate tax to a fund that it hopes will keep some affordable rentals from becoming condos. Whatever the solution, localities have to act fast if they want to keep units financially within reach of residents. “When they do convert them, there are damn few tools to keep them affordable,” Favola says.
