The City Forces Developers to Sell Cheap Condos. But Can You Find Them?
This piece will appear in this week's print edition of the Washington City Paper.
In mid-June, Angela Peltzer moved into her brand-new condo at 14th Street and Florida Avenue NW with views of the Capitol, the Washington Monument, and possibly the Anacostia River.
“I think I can see the new stadium,” she says.
The purchase is a coup for someone who never thought she could afford a condo, wasn’t looking for one, and ended up paying below market price.
“I thought I was so far away from it,” she says. “My career had been in nonprofits and traveling around, and I never had any money.”
But last year, after attending a women’s seminar—“something along the terms of financial management, creating wealth”—she heard a lucky tip from a fellow attendee: A new building called the Solea was holding a lottery for designated affordable condos.
Solea is a yellow and gray six-story property with an unorthodox South-Beach-meets-Soho look. Remaining two-bedroom units are currently listed at $549,900; one-bedrooms are going for $379,900.
Peltzer paid $234,000 for her one-bedroom unit. Currently an employee at the Department of Labor, she met the requirement of making between 50 and 80 percent of the area median income, $99,000.
Peltzer’s now informing all of her friends about the affordable-condo process—which is key because the average D.C. real-estate agent doesn’t know or isn’t talking about the deals. Nor is the average developer, it seems, or the average city housing official.
“None of our agents that I know of have sold one,” says Don Denton, head of the Capitol Hill Coldwell Banker office. “It’s not on our radar.”
“Generally, I would agree that they’re not well-marketed,” says Lindsay Reishman, who specializes in luxury condos. “If I were a consumer, I’m not sure I would know if they existed.”
Valda Crowder, however, is one D.C. agent who makes it her business to find out about these elusive units. She doesn’t have access to some secret database. She’s not treating developers to lunch on the company plastic. She basically sniffs them out—as early as possible.
“Usually when I see a development going up, I’ll call or look it up in the records,” she says. “Anything that’s put up near a Metro stop” is likely affordable, she says, because it may have been built on land previously owned by the city and provided to the developer with strings attached.
But even with cold-calling on new buildings, there’s potential trickery. Crowder, who served as Peltzer’s agent, suspects the sales staff may keep the receptionists purposely ignorant about the affordable units. Then desk-workers can honestly say, “I don’t know what you’re talking about,” Crowder says.
“I believe that one of the reasons they keep this quiet is they don’t want to sell them at affordable rates,” says Doug Carter, a real-estate agent who handled Solea’s initial sales and has also represented buyers.
Quietly, a lucky few figured out how to get in at the right time. Besides Solea, affordable units have sold at City Vista in Mount Vernon Square. Crowder and Carter both heard rumors of similarly priced units at Kenyon Square in Columbia Heights and Union Row near 14th and U—but the news leaked after all the cheap condos had been sold, they say.
More recently, Capitol Quarter, a 200-plus town-house community near Nationals Park, held its first lottery for workforce housing units (several more will occur as properties are completed in the coming years). During the first lottery, 58 qualified buyers vied for 18 homes.
But Capitol Quarter was a special circumstance, says AJ Jackson, a representative with developer EYA.
Unlike the typical developer, his group partnered directly with the D.C. Housing Authority, which provided a list of pre-approved buyers interested in town houses. The majority of people who qualified for the first lottery were former public-housing residents with incomes that no longer qualified them for public housing, according to Dena Michaelson with the Housing Authority. The agency walks them through pre-approval for a mortgage so they’re good to go if an opportunity comes up.
Absent of handholding from the Housing Authority, the city acknowledges the search can be perplexing.
“There was no uniform process in place to let prospective homebuyers know the location or
availability of affordable units,” writes Sean Madigan, a spokesperson with the office of the Deputy Mayor for Planning and Economic Development, in an e-mail. Lotteries weren’t required and marketing “has really been at the discretion of the developer who created the units.”
In mid-May, the mayor’s office issued new zoning regulations that could make finding these units easier.
Under the new rules—which are supposed go into effect by early fall—the Department of Housing and Community Development (DHCD) will review all buyers who register with the agency to see if they meet “certain income and household-size eligibility requirements.”
Then DHCD will notify registered people when lotteries occur. In addition, developers will be required to list their affordable units on a city Web site, dchousingsearch.org. The city will also “contract with a community-based organization to assist with outreach, housing counseling/education,” Madigan writes.
Agents, however, are not required to engage in “counseling/education.” On many projects, the developers aren’t forced to provide a commission to buyers’ agents on the affordable units, as they might be with a normal sale, so the incentive can be lacking.
Developers also have another trick: Strict viewing schedules, says Crowder.
“One building would only show their affordable units from 10 a.m. to 3 p.m. on Monday to Friday,” she says—not exactly the best time for your medium-income paper-pusher.
Despite the hurdles, Crowder says she’s had four or five clients enter into contracts for affordable condos. Two went to closing. She’s informed plenty of others about various lotteries.
Peltzer says several of the friends she’s talked to about how it works are now on the hunt.
“It’s really something you need to educate yourself about—or find someone who knows about it,” she says.
Image by Darrow Montgomery