Television cameras, Rotarians and local officials gathered on the sidewalk outside the Clay Apartments in Seattle’s Capitol Hill neighborhood on Tuesday for a dedication ceremony. The unveiling of the sleek new building with modern design touches like a poured concrete exterior and a subway tile spelled “CLAY” at the foot of the elevator would not normally have raised eyebrows in Seattle, which remains the crane capital of the United States even in the midst of the COVID-19 pandemic.

Developers have launched projects like the Clay, which is home to 76 so-called “energy efficient small housing units,” or SEDUs, which peak at 330 square feet, in response to Seattle’s searing real estate market. But as these buildings open their doors, some find that the expected tenants are not there. Capitol Hill is a prime location within walking distance of Amazon headquarters, a plethora of other tech jobs, bars and restaurants galore, and a light rail station that provides easy access to the rest of the city. Those outlets are on hiatus during the pandemic and the number of vacant homes has skyrocketed, prompting Clay’s owner to contact city officials in October with an offer to sell.

The Low Income Housing Institute (LIHI), a Seattle-based nonprofit that primarily serves homeless people, stepped in to buy the Clay and raised $ 18.2 million in funding from the city, from the State and the National Equity Fund. New occupants of the building also receive 50 Section 8 vouchers and VA support for 20 homeless veterans. The deal was concluded on Friday.

“Our core funders got together quickly and put the funding in place so that we could buy the building immediately and move people,” said LIHI Executive Director Sharon Lee.

Renters, who earn 30-40% of the region’s median income, will pay 30% of their income for rent. LIHI will provide an on-site case manager and 24/7 security. A retail space on the ground floor originally intended to become a water point – the site previously housed a beloved dive bar – will rather become a community room with a computer lab, a library and a common kitchen.

Almost 12,000 people were homeless in King County, the jurisdiction that includes Seattle, in 2020 according to the most recent one-off tally, which was taken before the pandemic reduced the area’s shelter capacity and resulted in a visible increase in tent camps.

“It’s the permanent housing solution we need the most,” Lee said. “It’s not magic science. We know how people can live with dignity in a warm, warm and affordable place.

Local advocacy group Third Door Coalition believes Seattle area needs 6,500 additional units of permanent supportive housing, which costs around $ 330,000 per unit and takes at least two years to build.

The purchase of the clay cost $ 240,000 per unit and the acquisition took six months from identifying the potential sale to closing. Plus, Clay’s top-of-the-line fixtures and fittings designed to attract market-rate rents – the median Seattle studio rent was $ 1,400 per month before the pandemic – are much more luxurious than what conventional production of permanent supportive housing can normally provide.

“We have never had a building with a washer, dryer, dishwasher and convection ovens for housing with permanent support services,” Lee said during a tour of the building, where model units have been furnished for. be occupied with donations from local Rotary clubs. The turnkey property is fully decorated with fresh paint, hallway artwork, stylish lighting, and a well-stocked bookcase organized by color. The entire building is pre-wired for internet access, another rare advantage.

“They say housing takes too long. The Clay proves otherwise, ”said Emily Alvarado, director of the Seattle housing office. “If we’re more creative with permanent housing solutions now, we can deliver a permanent solution to homelessness faster than we ever imagined. “

The real estate development pipeline kicked off projects years ago that should go live since the pandemic changed the fundamentals of the market. More than 2,000 SEDUs and other micrologation units have been granted permits in Seattle since 2018. Office of Housing Capital Investment Manager Laurie Olson believes a calculation is underway and that more properties at market rates may become ripe for purchase to put them in the hands of the state.

“The construction loans are expiring,” Olson said. While she admits that the Clay deal was exceptional due to a real estate developer with a certificate of occupancy in hand who contacted her office just as LIHI had new access to a public grant, she estimates that over 40 apartment buildings under construction might be interested. on sale. Lee, for his part, is currently analyzing four possible deals.

Seattle may be alone in this new dynamic, however. Citing a recent conversation with colleagues in Boston, Olson said, “Our peers in other high-cost cities don’t see similar opportunities.”

Real estate analysts also expect less massive sales as Washington state moves forward with its reopening. Starting Monday, bars, restaurants and retail businesses are licensed at 50% of their indoor capacity, live entertainment resumes with the first big concert in Seattle this weekend, and Microsoft announced that he was welcoming employees back to the office.

“SEDUs have been hit over the past 12 months, but we are very bullish on SEDUs over the medium term as affordable pricing is crucial in Seattle,” said Chris Fiori, director and project manager for the based real estate consultancy. in Seattle Heartland. “LIHI has benefited from short term market momentum, but this is more of an aberration than something long term.”

The possibility that the Seattle real estate market will rebound quickly is clearly on Alvarado’s mind. “It was a really special opportunity, but given the current real estate market, we think there are more opportunities now than there were before and we think this window will close,” she declared. “Now is the time to look for acquisition opportunities where we can move quickly to the delivery of affordable housing. “

How many more deals could be made during the lingering impacts of the pandemic recession and public health restrictions on Seattle’s real estate market is an open question. But for Stephen LeBerth, a homeless veteran now working in construction who described his journey from a tent camp to a small village of houses to an apartment in Clay during the dedication ceremony, his future is very much. more certain.

“Excuse me, I have to get back to work,” he told the crowd. “But I saw my apartment – it’s beautiful.”

Editor’s note: We corrected the spelling of Chris Fiori’s name.