Property-tax bills are soaring on Seattle’s old-school apartment buildings, where tenants can least afford to pay higher rents. This is how gentrification happens.
Bob Weisenbach is an old-school Seattle landlord. He still rents some apartments, with wood floors and bay windows on Capitol Hill for less than a thousand bucks a month.
Some of his tenants never move. He’s got one who has lived in his building for 35 years and whose rent he keeps in the three figures because she can’t pay more.
“You don’t think I don’t know I could get more money?” he says when I point out his apartments are easily priced hundreds of dollars per month below one of the hotter markets in the nation.
“My philosophy is if you don’t gouge people, then they’re happy, they stay and it’s less work for me,” he laughed.
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But a few weeks ago, Weisenbach, 79 and a retired architect, got a letter from the government that has him questioning how long he can keep up the old-school routine.
For one 20-unit building he owns, at 301 Summit Ave. E., the property-tax bill increased 27 percent this year. Over two years the surge was 36 percent. All told, the bill for this one building is $15,000 more.
“That’s $750 more per unit,” Weisenbach says.
“I about fell out of my chair,” he says.
He’s actually fortunate. Nearby I found two drab, mid-50s apartment buildings — one at 525 E. Roy, the other the spiffily named “Cabana Manor” at 712 Summit — that had insane property tax hikes of 57 percent over the past two years. Most every other apartment building I looked at on Capitol Hill, especially the older ones, has seen tax boosts in the 25-percent to 40-percent range.
It’s a perfect storm, with the passage of so many levies by voters combined with escalating building values.
The irony is that while the tax levies are aimed at helping working-class folks — by paying for more subsidized affordable housing, for example — the taxes are hitting the hardest at this older apartment stock, which is Seattle’s last storehouse of naturally affordable housing.
Weisenbach said he’s owned his buildings so long that until now he’s mostly been immune to the ebbs and flows of Seattle’s roiling real estate.
“I don’t fly high when everybody else does, and I don’t panic when the bottom falls,” he said. “I kinda dance to my own drummer.”
Last year, when average rents rose about 8 percent, he raised his 2.5 percent.
But now his 2017 property tax bill alone is higher by about $600 per unit — $50 per unit per month. By itself that’s a 5-percent increase on rent of $1,000. That wasn’t advertised during the political campaigns when they said this tax or that was “only $12 a month for the average homeowner.”
“I don’t have much choice but to pass most of this on in the form of higher rent,” he said. “The tenants are going to get a big shock.”
Weisenbach said another irony is that both he, and probably most of his tenants, all voted for the various tax levies. Maybe nobody realized how hard it would come back on those least able to afford it — working-class tenants.
“I’m going to write each of my tenants a letter, explaining the extreme size of this year’s tax bill,” Weisenbach said. “I’m worried it may drive some of them out of the building, which probably means out of the neighborhood, or out of the city.”
This is how gentrification happens: It comes from all angles. Weisenbach said he’d rather see an income tax than more property taxes, which have become “absolutely brutal on tenants.” But in the meantime, the working class is falling off the ladder, or rather being pushed. First by Seattle’s rocketing free market and, now, as an afterthought, by our government’s taxing response.
The landlord says new school has already moved in at his old-school buildings.
“I do now have a couple of new tenants who work at Amazon,” he said. “I could probably double their rents, and they wouldn’t even notice.”