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From her terrace overlooking South Lake Union, Helen Goehring has watched construction cranes and new high-rises mushroom on the horizon in Seattle’s latest economic boom.

Goehring, 82, knew many city residents were facing steep rent hikes, forcing some to move.

This month she and about 200 fellow residents at the Panorama House apartment building on First Hill learned they too will join the ranks of the displaced. New owners plan to thoroughly renovate the 1962 building — meaning higher future rents — so residents must leave by early next year.

The Panorama’s sale comes as Seattle’s mayor and City Council seek ways to keep older market-rate apartments affordable.

In Seattle, September’s average apartment rent climbed 10.3 percent from a year ago, to $1,485, according to market research firm Dupre+Scott. The average apartment rent in King and Snohomish counties was $1,293, up 8.9 percent.

“The only way I could remain in the neighborhood is dramatically downsizing” from a two-bedroom unit to a studio,” Goehring said. “That’s really hard because it means letting go of my treasures — my antiques.”

The odds are against the Panorama residents, many of them elderly, finding comparable apartments near downtown Seattle that fit their budget. Across the Puget Sound region, vacancies remain low, rents keep rising and apartment buyers are swarming for deals.

Rents reported by several Panorama residents were far below the $1,500 average rent for new leases in First Hill apartments.

Recent sales of other old Seattle apartment buildings also have displaced longtime tenants. These buildings are affordable often because they are in poor condition or lack modern amenities.

“The preservation of what we’ve called ‘naturally occurring affordability’ is a huge challenge in a hot real-estate market,” said Seattle City Councilmember Sally Clark, who chairs the council’s housing-affordability committee. “There isn’t enough subsidy to go around for all our priorities.”

The record pace of apartment construction — some 8,400 units will open in King and Snohomish counties this year, and 11,250 units next year — is skewing the average rent higher, said local apartment expert Mike Scott. In part that’s because the new apartments tend to be steel high-rises with luxury-condominium finishes and amenities like gyms, theaters and game rooms that aren’t typically found in older apartments.

“The rent has gone up, but the product is so much superior to what they were doing 10 years ago,” said Jon Hallgrimson, executive vice president at commercial brokerage CBRE.

Even rents in Seattle apartments built before 2011 are up 7.8 percent annually, which is four times higher than the overall inflation rate. And three-quarters of owners at buildings with 20 units or more said they plan to raise rents another 4 percent by March, according to Dupre+Scott’s recent survey.

The rising rents have attracted big investors. Seattle-based Security Properties and an undisclosed East Coast institutional investor paid $74 million, or over $413,000 per unit, for the Panorama House earlier this month.

There are very few large apartment buildings still owned by local families, said Tom Cain, of Apartment Insights Washington.

“When I got into this business, there were no people from out of state coming to buy apartment buildings,” Cain said. Now, “It’s more bottom-line oriented. Institutions own and manage them.”

Gracious living

“Looking toward gracious, leisurely living?” That headline in a 1955 ad in The Seattle Sunday Times appeared above a rendering of Panorama House.

In 1960, construction began on the $3.5 million high-rise project. Its 179 units were generously sized — most are 2- or 3-bedroom units — although residents must use a common laundry facility in the basement.

Compare that setup to the South Lake Union apartments now under construction, like 2030 Eighth Ave., where just 14 percent of the 355 units will have more than one bedroom, according to public records. Those units, however, will have washers and dryers in each unit, along with luxury finishes.

Panorama House attracted residents who stayed for 10, 20, even 50 years.

Elderly residents appreciated being a short walk away from hospitals and doctors’ offices on First Hill. Sister Anne Herkenrath, a decadelong Panorama House resident, worked a few blocks away at St. James Cathedral.

Then there was the sense of community: regular bridge games. Annual Christmas parties with carolers, wine and cheese in the lobby. Neighbors picking up items for each other from the store.

In January, Goehring’s doctor called and told her she needed to get to the hospital for emergency surgery. A neighbor drove Goehring, who doesn’t have a car, to the ER, then stayed with her and later went to the airport to pick up her daughter in the middle of the night.

Over the summer, Herkenrath comforted photographer Annie Grasegger, a dying 88-year-old resident whom she’d befriended outside the Panorama House. After Grasegger died in June, the nun tended to her Japanese maple and ginkgo plants.

Location and community attracted people to Panorama House, but the rents may explain why they never left.

Retired bank-trust officer Betty Kill, who’s lived at Panorama House for 11 years, moved there from Wenatchee to be closer to her daughters. She could forgive the erratic heating and electrical systems near her unit, she said, because the rent “has always been so reasonable.”

Panorama had been built by Seattle developer Mart Bert and Dr. Cornell Hoff, a pathologist. Hoff died in 1972, with his stake passing on to his wife, Lorry. (She passed away in 2009, as did Bert.)

Goehring, Kill and other residents said it was their impression that Lorry Hoff — who lived in the building too — wanted to keep the rents affordable to the middle class.

“She didn’t want the rent raised to the point where they couldn’t afford to stay here, as long as the building was profitable,” said Kill, 89.

Then, on Sept. 5, the building was sold. Three days later, the new management notified residents they’d need to move out early next year due to extensive improvements. Security Properties plans to spend $15 million to replace the original electrical system, remove asbestos and add washers and dryers to all units, among other things.

“Everybody is in absolute shock. It’s unbelievable,” said Donna Cable, 85, who moved in about a year ago. “We have no idea where we’re going to move.”

They’ll find rents for new leases have soared across Seattle. According to Apartment Insights Washington, for a one-bedroom, one-bath unit, Ballard’s 21 percent annual increase, to $1,550, led all Seattle neighborhoods. The city’s two least expensive areas, North and West Seattle, saw asking rents rise 8 and 6.6 percent, respectively.

Bellevue led the region with the highest asking rent of $1,665, a 6.9 percent annual increase, according to data from Apartment Insights. Redmond had the steepest hike, 12 percent, to $1,457. Federal Way had the lowest average rent among the county’s biggest cities and the lowest rent hike, up 5.2 percent annually.

Displaced tenants

Relatively few tenants in Seattle are displaced by development projects each year, but the numbers have grown with more intense redevelopment in popular areas.

In the past five years, the city has tracked projects displacing 886 households. Almost 60 percent have received financial aid with moving.

In 1990, the city enacted a law that requires property owners planning demolition or major rehabilitation of a building to help the affected tenants. Owners must apply to the city for a tenant-relocation license, give tenants notice of the plans and provide financial assistance for low-income tenants who apply and qualify. If they qualify, families receive about $3,200 from the city and the developer.

City Councilmember Clark said tenants need to know their rights: They have only 30 days after receiving the forms to apply to the city for help with moving expenses, and a city hearing examiner has denied many appeals based on tenants’ not submitting paperwork on time.

Tenant activists recently sued Volunteers of America, the nonprofit owner of the 114-unit Theodora in Wedgwood, seeking to stop the alleged displacement of subsidized residents and sale of the property to Seattle-based Goodman Real Estate, which plans to rehabilitate the 1965 facility and build market-rate apartments.

Volunteers of America said it first offered the property to nonprofit developers, who said they couldn’t afford to run the property as low-income housing.

In Goodman Real Estate, the nonprofit found a for-profit developer “willing to not only invest in and preserve this historic building, but also keep the housing affordable — at the exact levels the city is trying so hard to increase,” according to a letter Volunteers of America sent to city officials. “Affordability in Seattle is a complex topic.”

Goodman Real Estate said it’s committed to ensuring all of the Theodora’s residents continue to receive subsidized housing and relocation aid beyond the city’s requirements.

At Panorama House, Security Properties applied for a tenant-relocation license on Sept. 17. It indicates 157 of the 179 apartments were occupied, city officials say.

Security, which has developed or acquired over 65,000 residential units, says it’s going beyond what’s legally required to help residents: Every household will receive $3,000 for moving expenses, in addition to whatever they are eligible for under the city’s tenant-relocation law.

The apartment developer also has a relocation specialist who will help residents find new digs, coordinate with movers and stay on top of city deadlines for financial aid.

In a statement, Security said its management is “deeply committed” to the long-term preservation of affordable housing. The company says it owns more than 10,000 affordable apartments and is working to develop 1,100 more.

Herkenrath, the Catholic nun who lives at the Panorama, said getting angry doesn’t serve any purpose.

“I think they’re trying very hard to make this changeover as easy as they can given the circumstances,” she said.

Silver lining

While moving out will be traumatic for some residents, the building’s sale offers a happy twist for local social-service agencies.

Half of the Panorama’s sale proceeds will go directly to the Redmond-based Biella Foundation, which Mart Bert set up in 1989, said Jim Wolfe, Bert’s nephew and co-manager of the partnership that sold the building.

With less than $4 million in assets, the foundation gave just over $211,000 in grants last year for disaster relief, education and social services. Its assets now will skyrocket to more than $40 million.

“Oh my goodness,” said Goehring, when told this by a reporter. “That makes me feel much better. It’s important for people to know that.”

Wolfe acknowledges the difficulty that Panorama residents are experiencing. “Nobody likes to be moved around,” he said.

Goehring and Herkenrath say they can’t bring themselves to start looking for a new home until the New Year.

“As far as what I’m going to do, I don’t know,” said Herkenrath. “I’m praying about it. Something will come.”

Sanjay Bhatt: 206-464-3103 or On Twitter @sbhatt