The demolition of one Seattle apartment building offers a look at the housing challenges and rising costs for working-class residents.

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With their old brick apartment building near Lake Union scheduled for demolition, longtime neighbors Cortney Clayton and Meaghan Howell scrambled to find new homes in Seattle’s hot housing market.

They ended up in more expensive places, miles apart, after somewhat stressful searches.

Her hunt “came down to the wire,” Howell said. And then she had to make a snap decision. “If you don’t want it,” her new landlord told her in a matter-of-fact way, “I have eight people who do.”

Clayton and Howell liked 1309 Dexter Ave. N., with its hardwood floors, glass doorknobs and close-to-downtown location. But the 1927 building was also near the epicenter of Seattle’s Amazon-fueled boom. Its 22 units gave way to the wrecking ball and plans by a California developer for a seven-story, full-block design with 282 apartments and 259 parking stalls.

Sold 15 years ago for $1.8 million, the property fetched $16.7 million this past summer. “It’s really the value of the dirt versus the value of history. And often the dirt has so many zeros after it,” said Kji Kelly, executive director of Historic Seattle, a preservation group that’s been calling attention to increasing demolitions.

As teardowns displace tenants like Clayton and Howell, a kind of organic affordable housing is lost. It’s not the subsidized kind for low-income people. It’s the kind priced for moderate-income workers like Clayton, a flight attendant, and Howell, a breakfast server and afternoon bartender. And rents in new apartments average about $6,000 more per year.

In King County, the average one-bedroom apartment built since 2010 rents for $1,787, according to apartment-market research firm Dupre+Scott. For one-bedrooms in properties built between 1900 and 1944, the average is $1,298.

That’s partly because new buildings have more amenities and modern design, said Mike Scott. (Shea Properties, the owner of 1309 and 1319 Dexter, did not respond to requests for an interview. Records submitted to the city said the new building on those parcels would offer a “diversity of sizes and rent levels.”)

In all, 2,104 housing units in Seattle have been demolished since 2012 to make way for new buildings. Permits to demolish an additional 1,647 units are pending or under review.

Upzones recommended by Mayor Ed Murray’s housing task force would only accelerate the trend, said John Fox of the Seattle Displacement Coalition.

Murray’s task force recognized the need to preserve more housing, particularly for low-income residents. It called for new tools: public funds to buy and renovate apartments at risk of demolition, and tax exemptions that encourage landlords to preserve rather than sell buildings.

New King County Assessor John Wilson is proposing tax breaks for homeowners, as well as landlords, for preservation. “What I heard from South King County to Bellevue to Belltown was that affordable housing was a top priority and we just can’t afford to wait,” he said.

But in the time it takes to implement these strategies, hundreds, possibly thousands of homes could be reduced to rubble. And each demolition creates a domino effect that leaves the displaced competing for affordable rentals, often in older buildings increasingly likely to get knocked down.

Moving on

Howell spent 10 years at 1309 Dexter. She was paying $905 for a studio when she moved out in June. “The location was perfect,” she said about the 10-minute bus ride to her job at the Women’s University Club downtown.

The building also seemed to foster some spirit of community. People let their cats roam the hallways, she said. Clayton let Howell use her washing machine.

Howell found a 700-square-foot apartment in a small building in Ballard for $995. But she now pays for water-sewer-garbage and heat, adding $100 to $150 to her monthly housing costs.

“I don’t have many amenities, as they say. But it’s fine for me,” she said, “because I didn’t have other options.”

While she’s four miles farther from her job, she feels lucky because her new place is bigger and she likes Ballard. “I now have more social things, restaurants and stores, I can walk to,” she said.

Clayton’s situation was complicated by romance.

She was paying $1,400 for a two-bedroom, top-floor unit at the old building, where she lived nine years. Then she met Jeff Howes, a software systems administrator.

Howes was living farther north on Dexter, in a four-bedroom house with two roommates where he paid $800 for rent. But that house was sold to make way for new condos. Howes moved in with Clayton last year.

The savings were short-lived. They spent about $300, Clayton said, just on applications for apartments. “I did not want to move anywhere on Dexter,” Clayton said of the canyon of apartments that now dominate the street, along with a new Facebook office building and the new headquarters of Pemco Insurance. “I’m not into paying for a rooftop deck,” she said of the new apartments with names like True North.

Howes works at home and wanted a place with a view. He and Clayton finally found one, an 1,800-square-foot beauty in Queen Anne, renting for $3,400. The couple put up more than $10,000 in first and last month’s rent plus security deposit.

“It was the very top of my budget,” Clayton said.

Holding the line

Wilson, the assessor-elect, is calling for a new 10-year tax exemption for owners of affordable rentals, whether in small buildings or “in-law” apartments, also known as accessory dwelling units.

If landlords know they have a 10-year tax exemption, Wilson said, they’ll be more likely to invest in upkeep and upgrades.

Under his plan, rents in such properties would be set so tenants making about $20 an hour, or less, would pay no more than 30 percent of their income for housing.

Wilson’s plan would require changing state law, which means lobbying both King County’s elected leadersand legislators in Olympia.

Murray is on a similar path. He’ll unveil a tax-exemption proposal in December or January, according to spokesman Viet Shelton. The mayor, too, is rounding up allies for changing state law.

Murray’s staff aims to create a kind of early-alert strategy to identify neighborhoods and buildings where the risks of demolition and displacement are most dire. The need is escalating. Dupre+Scott projects 38,000 new units will be built in the next three years.

“We’re trying to go as fast as we can, but there is the Seattle process we have to respect and adhere to,” Shelton said.

The mayor does not plan to propose a new source of funds for preservation, as his task force recommended, said Robert Feldstein, the mayor’s top policy adviser.

The city now buys and preserves some apartment buildings. But those acquisitions are for low-income rentals, primarily very-low-income rentals, said Steve Walker, the city’s housing director. They’ve preserved 192 units in the last six years.

These approaches may prove helpful for low-income housing where the greatest need exists. But, like Seattle’s historical-preservation laws, they may not help residents of a building like 1309 Dexter.

“The oldest, most decorous buildings have mechanisms that can protect them,” said Kelly, of Historic Seattle. “The troubling thing for preservation is all those buildings that provide character to neighborhoods but are not eligible for protection.”