By Kirstin Downey
Washington Post Staff Writer
Monday, November 5, 2007
One night in February 2005, a letter was slipped under the door of the studio apartment in Arlington County where 81-year-old Margot Gelhard had lived for 25 years.
It was written in Spanish, so at first she didn't realize it was an eviction notice. The apartment building had been sold and was going to be torn down and replaced with luxury condominiums. Gelhard said she was so distressed the day she moved that she was taken out in an ambulance and hospitalized. The building was demolished.
But construction never went forward. The former Marlaine apartment building on North Pierce Street in North Arlington is an unsightly dirt lot surrounded by a chain-link fence. It's one of at least six Washington area buildings seemingly marooned by housing economics and changing times, representing more than 700 low-cost apartment units that have gone missing from the market during the recent real estate slump.
Former tenants, neighbors and housing activists say it is a shame that these places were destroyed or left vacant when the need for affordable housing is so acute.
"It's sad that the people who lived there were scattered and had to move elsewhere, when nothing has happened for two years," said Stanley G. Karson, president of the Radnor/Fort Myers Heights Civic Association.
Hilltop House, adjacent to the Marlaine at 1200 N. Queen St., was also demolished. Together the buildings contained 142 apartments, housing about 300 people. Parkland Gardens, on North Glebe Road near Lee Highway, which is now vacant, contained another 149 units. Another cluster of buildings, on 14th Street near the Arlington courthouse, sits boarded up and overgrown.
In Gaithersburg, West Deer Park apartments, which once housed 191 families, has been vacant since July 2006. Residents were forced to move to make way for a 130-town house development, but the plans have been canceled, and the building eventually will be reoccupied as a rental property.
"The owners got caught up in the tanking market," said Louise Kauffmann, Gaithersburg's director of community development.
In Alexandria, Hunting Terrace, which is being proposed for redevelopment, had 116 units, all now empty. A low-income housing complex on West Glebe Road called Glebe Park, which is owned by the Alexandria Redevelopment and Housing Authority, has 152 units, but 102 are vacant. It has structural problems and needs a major renovation, city officials said.
Moorosi Mokuena, a housing activist in Montgomery County, said: "They are displacing tenants, telling them to live elsewhere, disrupting their economic health and their families. The bottom line is that it is immoral what these people are doing."
Real estate industry executives say the market slowdown, coming after several years of an intense boom, is to blame for properties left dangling in limbo. More than two dozen proposed condominium projects have been canceled in the past year, according to Alexandria-based real estate information firm Delta Associates, because the market for high-end units has fizzled and investor-purchasers have vanished.
"The market conditions are putting a pause in many projects," said economist Gregory Leisch, president of Delta Associates. "Construction costs continue to rise, borrowing costs have spiked up. . . . That's the urban renewal process. It's the human downside to the phase we are in now."
Property owners preparing for redevelopment generally would prefer to keep tenants until the actual redevelopment begins because they can maintain a better cash flow, but sometimes they need to "empty out the property" if the renovation or redevelopment work is substantial, Leisch said.
The local real estate market became "distorted," said Alvin Smuzynski, president and chief executive of the nonprofit Wesley Housing Development. He said real estate investors bought properties at such high prices that they need to charge top-dollar rents or sale prices for them, often with speculative, nontraditional financing. It is becoming obvious that many potential occupants could not afford the cost.
"A lot of things are not going through," said Rex Peters, director of real estate for Fairfax County's Department of Housing and Community Development.
The situation is likely to be temporary, and many of the projects are eventually going to move forward. Centreville's Sunset Knolls, with 144 vacant units, had been slated for redevelopment into townhouses, but the project stalled and the county considered buying it for affordable housing, Peters said. Now another developer has purchased the site, he said.
Similarly, he said, a 360-unit apartment complex called the Ridgeleigh at Van Dorn went into foreclosure, but it has been purchased and will again become rental housing, he said.
Leisch said he believed most of these projects will be "back on track in 18 months."
In the meantime, officials say there is little they can do about buildings that have been removed from the housing stock, unless they pose a safety hazard.
"It's unfortunate, to say the least," said Chris Zimmerman, an Arlington board member. "It's one of those frustrating things, the combination of private property rights and a volatile real estate market."
J. Walter Tejada, vice chairman of the board, shares his irritation about the way people were displaced by companies that were not committed to going forward with the projects.
"Some landowners treat people like they are just a deck of cards they are playing," Tejada said. "They don't realize the tremendous damage they cause. It's just another passing business deal to them with no effect on their lives at all."
Parkland Gardens in North Arlington, for example, had 149 apartments and housed many residents who could not afford to move to other apartments in Arlington, said former tenant Lara West, who moved out in October 2005. She said the building had been allowed to deteriorate in anticipation that it would be sold and redeveloped. She was told evictions were looming, so she found an apartment she could afford in Sterling. Her rent had been less than $1,000 a month at Parkland Gardens.
Some residents "didn't have the resources to move," including some elderly people, West said.
She says it is a pity that the apartments are vacant.
"It was a pretty convenient place for shopping and all that," she said. "It's so sad."
Beazer Homes, which bought the property, no longer has any involvement in the site, according to a company spokeswoman.
The two Arlington buildings -- the Hilltop and the Marlaine -- were purchased by Centex Homes. Karson, president of the local civic association, said the residents, including families with children, were told they had to leave by May, but the developer later gave families an extension so students could complete the school year. In March, Centex sold the vacant lots to a set of limited partnerships controlled by Lion Gables investment fund, Centex spokesman Eric Bruner said.
A spokesman for Lion Gables did not return messages seeking comment.
For some people forced to move, it has been a personal tragedy.
Gelhard, the retired Arlingtonian, soon found another apartment nearby, but the stress of the move took a toll. On the day she changed apartments, she collapsed into unconsciousness and had to be hospitalized for overexertion.
"The pressure" had gotten to her, she said. "The doctor said, 'It's too much for you.' . . . It was hard for everybody."
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