By Harry Saltzgaver - Grunion Gazette - July 27, 2006
A controversial fee for those converting apartments to condominiums was approved Thursday by the city’s Planning Commission, but it still must clear final City Council approval.
The condo conversion fee first went to the Planning Commission on June 15. The concept was to charge about 1% of a condo’s purchase price to go into the city’s new Housing Trust Fund. But staff members said then that tracking sales of individual units would be very labor-intensive, and commissioners asked for a report about what other cities are doing to collect such fees.
The result was an either-or recommendation from staff members to the commission. One option was to charge a flat $4,000 fee for every unit whenever a property owner applies for a condominium conversion.
That approach didn’t take into account units that would sell for less than $400,000, though, and puts all of the burden on the original property owner, according to Patrick West, director of the Community Development Department.
Last Thursday, the Planning Commission bumped the percentage up to 1.5%, but added several exemptions, including conversions to create affordable housing (one of the goals of the Housing Trust Fund). Suzanne Frick, Planning and Building Department director, said only conversions begun after June 20 would be liable for the fee.
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Friday, July 28, 2006
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I spent last weekend showing condos to an out of town buyer with a small budget. Her maximum purchase could not exceed $300k. We looked at property in Long Beach, Carson, Bellflower, Downey and Lakewood. The only unit that was even remotely acceptable was a condo conversion in Long Beach. It was new, fresh, light and bright and affordable. All of the existing units that we also viewed were not any of these.
When builders build or convert,all costs including profit need to be built into the price per unit. This new condo conversion fee will be passed along to the ultimate consumer in the form of an increase in purchase price. We have few enough buyers in the market and way too much inventory available. I wonder if this fee will cause some of the newly converted units to become cost prohibitive? I also wonder if the city considered the declining Long Beach Real Estate Market when they make this decision.
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