Monday, May 01, 2006

Perfect Time to Loosen Condo Conversion Rules?

From the Sacramento Bee:

Responding to developer demand, the city of Sacramento is contemplating easing rules so more property owners can convert apartments to condominiums. The city's current ordinance, adopted in 1980, makes it nearly impossible for owners of apartment complexes to offer their buildings for sale as condos, real estate experts say.

Thousands of new condominiums have been created throughout the region in recent years through such conversions. But within the capital city, none has been approved since 1991. "The developer community sees condos as a source of more affordable, entry-level housing," said Desmond Parrington, an associate planner with the city. "It's that market now that's particularly hard-pressed..."

In an effort to protect renters, the current ordinance requires that the apartment market have an average vacancy rate of at least 5 percent before conversions can occur. That provision isn't unusual; both Roseville and Folsom maintain similar rules. But developers say some of the city's other rules are more onerous. If there are any low or moderate-income tenants in a property targeted for conversion, for example, the owner must offer to sell them a unit at a price that won't require them to pay more than 35 percent of their annual income for a mortgage. "When you're talking about someone who is low income, you're talking about a condo being offered at $100,000 or less," Parrington said.

1 comment:

Happy Renter said...

Yup,Best way to make housing more affordable to add to the growing inventory. They can crash the market in a year if they try hard enough.