Article
Courtesy of AARO BULLETIN
ISSUE JULY- AUGUST 2006
By Barbara Basler
The notice was typed on plain white paper and slipped
under each tenant's door last summer like a friendly announcement of a
neighborhood party: The Cambridge at 3900 apartment building is for sale and
might be converted to condominiums. We cannot accept phone calls from tenants.
No cause for alarm.
"I felt sick when I saw that," says 87-year-old
Ella Edemy, who has lived in the building on North Charles Street in Baltimore
for 26 years. She and her late husband moved there when they retired and sold
their home, "and we never expected to move again."
"When I picked up that piece of paper—it was such a
blow," says Dena Grenell, 75, who has lived in the 229-unit high-rise for
19 years. "This building is like a small, friendly town where we all know
each other. No one ever dreamed it would be turned into condos."
But months later, the Cambridge at 3900—where a number
of tenants are age 60 or older—was sold, and in April it became the Halstead
at Guilford condominiums, where what was a $1,300-a-month two-bedroom rental now
sells for $355,000. In the process, the large, tight-knit community of older
tenants is unraveling, leaving many people in their 70s, 80s and 90s facing the
end of their known world.
Not only will they miss the good friends and helpful
neighbors who live down the hall, but also all the amenities of the leafy
neighborhood near Johns Hopkins University, where they can walk to shops,
doctors' offices and restaurants.
"When I found this place, I thought good luck was
shining down on me," says one tenant in her 90s, who asked not to be named.
"But this? Can you imagine me taking out a mortgage at my age?"
In towns and cities across the country, developers have
been buying up buildings with tens of thousands of rental apartments, fueling
the biggest wave of condo conversions in two decades. The wave began in 2004,
and by the end of 2005 more than 260,000 apartments had been taken out of the
rental market to be sold as condos, according to the National Association of
Realtors.
While the condo market is cooling in many places,
"trends don't change instantly," says Walter Molony, a spokesman for
the Realtors association. Numerous conversions are already in the pipeline, and
a cooldown doesn't mean conversions won't continue in some areas.
In Manhattan alone, some 60 conversions are now pending
that would "condo" 7,000 rental apartments. In Minneapolis, the annual
number of converted rental buildings soared from four in 2000 to 86 last
year—and 42 more were converted by mid-June this year. "We are losing
affordable housing at an alarming rate, here and across the country," says
Christine R. Goepfert, an attorney with the local Housing Preservation Project.
Housing experts say that no matter how stable a rental
building appears—whether in Miami or San Diego or Seattle—tenants are always
vulnerable to a sale or conversion. It's simple economics: Healthy urban
economies create pressure for close-in, convenient housing. Where undeveloped
land is scarce, developers look for older buildings to convert to condominiums,
and many of these are buildings where renters have put down roots and stayed and
aged.
Converting rental properties to condos can allow some
buyers priced out of single-family housing to own their own homes. Many older
tenants living on fixed incomes, however, cannot afford to buy their apartments,
triggering wrenching moves.
"Moving was a nightmare," says Marion Sjodin,
75. She and her husband have already left the Cambridge for a smaller apartment
in a suburb several miles away. "We miss our friends ... it's so sad."
"We know from studies that moving has a huge impact
on physical and mental health," says William Apgar, a senior scholar at
Harvard University's Joint Center for Housing Studies. "For seniors to face
an unknown future, to have their lives disrupted this way, literally makes some
ill. And where do they go—some marginal building? Move in with their kids or a
relative? Go to a nursing home? This is incredibly stressful."
In Baltimore, the city's Commission on Aging and
Retirement Education sent a social worker, a grief counselor and a housing
advocate to the Cambridge to help its older tenants through the conversion
trauma after one of them jumped to her death from the 11th floor.
"She was still not over the death of her husband
several years ago," says one resident who knew her. "And when we got
the news the building was going condo, she talked about it all the time and just
seemed to come unraveled."
In fact, news of the conversion caused "real panic
among some of the older residents," says Ann K. Murray, 58, a 22-year
resident of the building. Some started looking for other places immediately and
moved as soon as they found anything—forgoing their legal rights.
"It was the stress and uncertainty, they just didn't
want to live with it," Murray says.
There are no federal laws governing the conversion of
rental units to condos, and state and local laws vary widely. In a few
cities—Baltimore is not among them—conversion laws give renters the right to
buy at a lower, "insider's" price, and some tenants have made a
healthy profit by selling their rights to outsiders. But "turning a
90-year-old into a financial wheeler-dealer is not the model" in most of
the country, says Harvard's Apgar.
And for older tenants even the best laws fall short of
what they really want—which is for their community to remain as it is.
Generally, condo conversion laws require owners to notify
tenants, offer them the right to purchase their units and give them adequate
time to relocate. Maryland law offers fairly extensive protections—from strict
notification rules to some reimbursement for moving expenses.
Now, amid the dust and noise of the renovations in the
building's lobby, the remaining tenants are mulling over their options. They
have contacted their Baltimore City Council member, Mary Pat Clarke, who is
helping them tap city experts to understand their rights. "I'm working with
the ones who are hanging in, and trying to help others find new places,"
says Clarke. "This is horrible for them. It's a very, very sad ending for
the community they had here."
"Mary Pat has held meetings, explained things to us,
made sure we understand deadlines," Grenell says. "After all these
months we are finally getting information we can use."
Arthur Solomon, chairman and CEO of the DSF Group, the
Boston developer that now owns the Baltimore building, says, "I am 66 years
old … I know as you get older it's tougher and tougher to make adjustments.
This is an issue we are very sensitive to." DSF "went above and beyond
what we have to do legally," Solomon says, including providing "nine
or 10 pieces of communication" to the older tenants.
What was key for some residents is that Maryland law
requires developers converting rentals to condos to set aside 20 percent of the
units as rentals for tenants who are age 62 and older, or disabled, and of
moderate means. Those residents can qualify for a six-year extension on their
lease, and just months ago Baltimore passed emergency legislation increasing the
household income cap for extended leases from $47,000 to $59,000.
Many older tenants have applied for the extensions,
knowing they are competing against their friends: If too many qualify for the
extended leases, those with the shortest tenure, even if it is 10 or 15 years,
must move.
"We're all very emotional about this," says Dena
Grenell.
Still, says a tenant in her 90s, "I'm hoping against
hope I get to stay another six years. I have no family. Where else can I
go?" And if she has to go, she will find herself paying more money for less
space in a tighter rental market.
How
can people avoid finding themselves in a situation like this? While still
active, Apgar says, boomers need to create their own housing solutions. For
instance, tenants could band together to buy, with financial help from a
nonprofit group, their rental building with the agreement that any time
residents decide to move, they will sell their rights to live there at a price
that perpetuates affordable housing. Without such changes, Apgar says, the next
huge wave of conversions "will hit aging boomers, and you'll see the
Baltimore story repeated over and over again."
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