Heads up, developers, some want ‘low end'
DAN VOELPEL; THE NEWS TRIBUNE
Published: March 28th, 2007 01:00 AM

John Bird voted himself off the island. Anderson Island. He wanted to downsize, move closer to work and scare up a social life.
But where?
All the civic anxiety in Tacoma over a glut of expensive downtown condos for sale sounded like a proposition of $300,000-plus proportions. Too costly for Bird's liking.
So he scoured the Internet and bought the first condominium in a secluded complex of 12 ultra-small former apartments amidst a forest of fir trees. In Lakewood. For $159,500.
Enlarge imageGeorge Atz shows off the kitchen in one of his new condos. Meant for people on a budget, the units still have granite countertops.

"I couldn't believe I could find something in that price range," said Bird.
And that's the point.
The Cottage Woods project, and a similar conversion complex called Colonial Terrace about a mile away, both hit the Lakewood market last month. Together they represent the newest attempt to target a niche that Tacoma's condominium developers have shunned: senior citizens living on a shoestring.
"Affordable housing is a hot topic right now," said George Atz, an investor in both conversion projects and a Keller-Williams Realty agent. "We just thought there are people out there who want to own their own place but want something more affordable" than they could buy in downtown Tacoma.
Atz and his real estate agency partner (and wife), Katina Toscas-Atz, call it a calculated experiment based partly on Toscas-Atz's 25 years selling condominiums.
"We had a vision," Toscas-Atz said. "This place (Colonial Terrace) was just a pit. The people lived in squalor. It was so bad some of our potential investors bailed on the walk-through. But we thought we could turn it into quality affordable housing all along."
They ultimately amassed a group of 13 investors to take the two aging, blighted single-story apartment complexes and turn them into a rare market product.
How about a one-bedroom condo for $99,950?
For that price, you get less than 600 square feet with limited storage in a cute brick Colonial Terrace flat built in 1958, in a cul-de-sac of 14 units, on the bus line. Partially gutted and remodeled, some with fireplaces, they feel new and cozy.
Over at Cottage Woods, built in 1968, the two-bedroom units at 770 square feet top out at $159,500. But owners get a garage rather than a parking space, a central picnic garden, more of a yard and more storage.
Covenants and restrictions set up by the investor group require occupants to be 55 and older - a last-minute change from the original plan to target any buyer.
"We realized young families need more space than what we have to offer," Atz said. The restriction also assures buyers 55 and older of a more subdued neighborhood.
While that limitation won't help first-time buyers, young families or young singles, Tacoma condominium developers still could learn a lesson here and catch some of the vision on display in Lakewood.
In technical terms, you'd call it "condominium market stratification." In layman's terms, you'd call it offering a wider range of condo sizes with a wider range of furnishing qualities in a wider range of prices.
Some of the cheapest condos in Tacoma's greater downtown market have come via apartment conversions, which sold from $150,000 to $300,000. That range of affordability has nearly disappeared.
Most developers of new units scrabble over the same niche - buyers with enough money to afford units from $500,000 to $1.5 million, according to a new consultant's report commissioned by the City of Tacoma.
I could never afford that even if I wanted to live in one. Could you?
Yet when I talked recently to three developers whose projects - all within two blocks of each other - have yet to hit the Tacoma market, they all used the word "luxury."
At the project furthest along, 505 Broadway, where the foundation work started this month, investor group spokesman Trevin Anderson called the 62 units, "the highest end" in the market so far. The project's slogan: Luxury has a new address.
At Old City Hall, where The Stratford Co. will make 41 units out of a historic office building, developer George Webb describes the project as "Tacoma's exclusive address" and hints that some celeb everyone in the country knows already has signed on to live there. The tagline: "... distinct and exclusively appointed luxury condominium homes."
In between, on a vacant lot next to the historic Elks Lodge, Portland developer Homer Williams of Williams & Dame Development Corp. says whatever his company builds into an 18- to 24-story tower will achieve a quality echelon "unlike anything the Tacoma market has seen." Williams allowed the possibility of switching to luxury apartments instead of condos because of the competition.
Is all this a bad thing?
Well, yes and no.
No, because if these three guys had chosen to slap up some quick-and-dirty, slip-shod units on their prime view parcels, this town would cry holy heck about greedy, fast-buck developers ruining our town. Right? And no one wants that.
Yes, however, because intensifying competition at the highest price levels means units will sit on the market for years before folks buy them, according to the city's study. And that stretches out Tacoma's renaissance, puts the projects at financial risk and locks out a whole range of potential urban dwellers - mostly first-time buyers and young families - who can't afford to buy in.
So, for now, Colonial Terrace and Cottage Woods in Lakewood - although reserved for senior citizens - represent bargains in small footprints. The kind of bargains wise investors should work into Tacoma's mix.
Dan Voelpel: 253-597-8785
dan.voelpel@thenewstribune.com