Should you worry about rent hikes if your low-income complex goes to monthly leases?
A Richland renter created a small stir on Reddit recently with a post asking if they should be worried if apartment managers are renewing leases on a month-to-month basis instead of once a year.
The renter wondered if the change from longer-term leases at Copper Mountain Apartments could result in more frequent rent hikes that could force them to move.
“I really hope they don’t price us out in the next year and turn it into a regular apartment complex,” the renter wrote. “Market” refers to properties that can legally charge whatever the market will bear.
Copper Mountain, in Richland’s Badger South community, serves people who earn 60% or less of the area’s median income, or $55,440 for a family of four in Benton County.
The 276-unit property is required to serve low income renters under a financing agreement with the Washington State Housing Finance Commission. The state agency provides loans and other financing for affordable housing and related projects.
The Tri-City Herald asked the commission about monthly leases. They aren’t a concern, it said.
“Copper Mountain has income and rent limits in place until 2055, so the building can’t be converted to market rate for several decades yet. The restriction cannot go away unless the property experiences a foreclosure. All the units at Copper Mountain are restricted to people earning no more than 60% of area median income,” it said.
Income-restricted properties have upper limits on the amount of rent they can charge.
For a two-bedroom unit in Benton County, the maximum rent is $1,248 per month for a household earning up to 60% of the area income.
Tax credits
Copper Mountain’s builder, Inland Group, agreed to rent and income limits when it used tax credit financing from the housing finance commission.
In 2018, the agency agreed to provide $35 million toward the $44 million cost to build the complex and clubhouse at 2555 Bella Coola Lane.
It offers a mix of 1-, 2-, 3- and 4-bedroom units with rent on one-bedroom units starting at about $1,000 a month.
The Tri-City market average of $1,175, according to a spring survey by the University of Washington’s Center for Real Estate Research.
By law, income restricted apartments may charge up to a set maximum under a formula based on the income level served and number of bedrooms. For a 60% complex in Benton or Franklin counties, the rent cap ranges from $970 a month for a studio up to $1,774 for a five-bedroom.
Raising rent to those levels can be a hardship for renters on limited incomes, the housing finance commission said.
Month to month
Month-to-month leases are common, the commission said.
The Internal Revenue Service requires properties to sign new tenants to leases of at least six months. Once the initial term is over, owners can opt to renew on a month-to-month basis. Most do, the agency said.
Income limits are set by the federal Department of Housing and Urban Development or HUD.
In Benton County, 60% of the median family income is $43,260 for a one-person household, $49,440 for two, $55,620 for three, rising to $81,540 for an eight-person household.
In Franklin County, it is $38,820 for a one-person household, rising to to $73,200 for eight people.
Copper Mountain is managed by FPI Property Management, a national firm based in Folsom, Calif. Officials at the property and at the management company could not be reached to address the tenant’s concern.
More properties
The finance commission has supported development of more than 100,000 “affordable” units across more than 1,140 properties in Washington state.
Locally, it’s various financial programs have collectively supported nearly 2,600 units in 26 Tri-City housing projects.
Rent restrictions vary depending on when the project was approved, the target audience (seniors, farm workers, formerly homeless) and the type of financing it received.
Aptfinder.org is a resource for identifying properties that accept housing vouchers or that operate under the state’s tax credit and bond program. Most, though not all, have lengthy waiting lists.
Affinity at Southridge, Kennewick, Inland Group, 150 units.
Bishop Skylstad Commons, Pasco, Catholic Housing Services of Eastern Washington, 59 units.
Bishop Topel Haven, Pasco, Catholic Housing Services of Eastern Washington, 42 units.
Columbia Park, Richland, Boise Housing Corp., 138 units
Copper Ridge Apartments, Kennewick, Inland Group, 230 units
Desert Rose Terrace, Benton City, Richland Housing Authority, 25 units
Desert Villa & Desert Villa East, Kennewick, Vitus Group, 154 units
Heatherstone, Kennewick, Westlake | Associates, 223 units
Kamiakin Apartments, Kennewick, PacifiCap Properties Group LLC, 233 units
McMurray Park Phase II, Richland, J. David Page Stephen W. Page Development, 98 units
Meadow Park Apartments, Kennewick, Evergreen Housing Development Group LLC, 152 units.
Nueva Vista, Kennewick, Housing Authority City of Kennewick, 32 units
Nueva Vista Phase II, Kennewick, 28 units
Orchard Hills Apartments, Richland, Community development Services Inc., 141 units
Parkview Apartments, Kennewick, Westlake | Associates, 107 units
Pinecrest Apartments, Pasco, J. David Page Stephen W. Page Development, 53 units.
Quail Ridge Apartments, Kennewick, Paul Garcia Investments, 50 units.
Rio de Vida, Prosser, Catholic Charities Housing Services (Yakima Diocese), 50 units.
Saint Anthony, Prosser, Catholic Charities Housing Services (Yakima Diocese), 60 units.
Sandstone Apartments, Kennewick, American Capital Development Inc., 119 units.
Tapeyac Haven, Pasco, Catholic Housing Services of Eastern Washington, 44 units.
Three Rivers Retirement Apartments, Richland, 41 units.
Varney Court, Housing Authority of the City of Pasco & Franklin County, 38 units.
The Vineyards, Pasco, Pacific Communities of Idaho LLC, 45 units
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