The words "condominium conversion" can evoke a range of emotions in apartment renters -- a reality developers began to discover during the 1970s as the conversion movement picked up steam and tenants began to fight back.
Attractive price discounts to resident-buyers has helped ease the transition at many projects, but some developers -- partly as the result of intensive tenant organizing and new laws protecting tenant rights -- have gone even further out of their way to accommodate residents during the conversion period. Among the examples of this approach to conversion and the success it has in heading off tenant backlash are several large projects in Northern Virginia.
One in Annandale, Woodburn Village, at Rtes. 50 and 66, is being converted by Almist, Inc., a Northern Virginia company. Residents there said the condominium process at the first, 196-unit converted section there has been smoothed by the company's willingness to communicate about what it was doing. Conversion at a number of other major projects here in the past, by contrast, has been marked by tenant resistance and delaying tactics.
Julia Friedman, a laboratory technician who is buying a unit at Woodburn with her husband, said the converters started explaining what they intended to do "from the moment we walked into the first meeting." She said the company "went to great lengths to make us as comfortable as could be," adding that while a number of residents were confused about what was unfolding, the company's representatives "didn't make anyone feel dumb. They proceeded very slowly, and there have been no shocks, no surprises."
The element of no shock is important, as more and more developers are coming to realize.
"Our commitment to communications is two-fold," said Almist President Ron Kirby: "It cuts down on difficulties with residents not knowing what's going on, thereby eliminating rumors, which can cause all sorts of problems. If you start a communication program and continue it in a straightforward way, you defeat the few negative individuals you might have."
Lois Niknadovich, a Woodburn Village buyer who works for a large home-building firm, agrees that knowing what is ahead can prevent unnecessary ill will. "The communications program did not influence me to buy, but if it had been negative, I might not have bought."
"Communications with tenants is probably the hardest lesson for developers to learn," said Suzanne Ives, who works with area development groups. "You're talking about people's shelter -- their homes."
You're also talking about people's pocketbooks, and the primary factor in whether tenants as a whole are satisfied or bitter over a conversion is how many are able to buy into the conversion themselves or continue to rent there.
A recent study by Arlington County showed that a total of 7,827 units -- or about 20 percent of Arlington's 40,000 apartments -- had been converted by mid-1981, and that about 75 percent of the conversions involved low- to moderate-income rentals. This presents a potentially serious displacement problem and a sensative situation for developers.
The study showed a variety of approaches, from providing relocation benefits along county guidelines to offering a wide range of discounts, financing and renting options that a high percentage of residents are able to stay.
Geneva Cox, an Arlington County housing specialist, said that the 655-unit Arlington Village apartments has the best record so far of preventing displacement. A total of 41 percent of the residents there will be able to stay because of substantial discounts for resident buyers, long-term rent guarantees for the elderly and a limited-equity cooperative ownership for some of the units.
Several complexes pay particular attention to the needs of the elderly. In Arlington these have included the higher-rent Hyde Park and Chatham apartments, Cox said. And the study also showed special concessions at the moderate-cost Taft Towers and Tanglewood Apartments and at the Cardinal House.
At Parkfairfax, International Developers, Inc. offered the usual discounts to tenants wanting to buy, and created a "founder's program" for people who had lived there for 30 years or longer -- an additional $2,000 was deducted from the discounted price. Later, it was found that a number of people over 70 had lived at Parkfairfax for over 10 years and they, too, were given an additional $2,000 off the discounted price.
In some jurisdictions such as Fairfax and Arlington counties, major condo developers have worked with local authorities on voluntary guidelines. These include relocation and financial assistance for displaced tenants and providing special services for the handicapped and elderly. Long-term leases for the latter groups are one way to avoid dislocation for those unable to buy.
At Woodburn Village I, the first section there to be converted, about a fourth of the tenants had bought units by this fall, while the average in the Washington suburbs is 18 percent, according to management consultant David B. Wolfe. Discounts at Woodburn ranged from $6,000 to $10,000 per unit, depending on size. Prices for one-bedroom units started in the low $40,000s; in the low $50,000s for two bedrooms and the upper $50,000s for three-bedroom units. Prices for outside buyers ranged from $50,000 to $68,750.
Tenants were also given the choice of purchasing their apartments on an "as-is" basis. Residents of the first section to be renovated were offered a fixed interest rate for the first three years at 12 7/8 percent on a 30-year mortgage. When it became apparant there was still money available, a lottery was held for the lower rate for residents in the second section who wanted to purchase in the first section of converted apartments.
Those tenants not in a position to buy were offered leases with terms of up to three years, based on their length of residence. Rents would be comparable to prevailing rents. However, only 20 percent of the units can be leased because of limits imposed by the lender.
Almist president Kirby said they are eager to work with tenants who want to buy and help them find ways to purchase their units. In one case, a co-purchase arrangement was suggested for two people who individually were unable to afford an apartment.
Donald Lay, of the Fairfax County Housing and Community Development office, said the project's developers have kept the county informed about the conversion process and have sent in copies of newsletters and notices. There have been no complaints about the development, he said.
"I'm impressed with their communications. It appears very open, sincere, and they seem very proud of what they are doing," Lay said. "Whatever groundwork has been laid has been a success in terms of measuring outcry or fear over the project."
Not everyone is entirely happy at Woodburn Village I. Veronica Joliat, a legal secretary, objected to a grassy area being torn up and later covered with gravel after repair work. She also said that she thought VA financing with no down payment required would be available, but later found out it wasn't.
Roger Nord, a real estate lawyer, was critical of the early handling of the conversion, saying that at the first meeting with developers there was no firm information about relocation assistance, and it was not clear if FHA or VA financing would be available.
But Nord concluded that overall there were no major mistakes made in the conversion and that he is "satisfied."
The availability of information was a large part of the effort to satisfy residents.
In its introductory material, Almist stressed its intention to provide moderately priced housing and to help interested residents buy. Tenants were told of the timing of conversion, scope of interior and exterior work, marketing and financing plans. Brief biographical sketches of members of the development team were included -- architect, civil engineering, construction, customer service and relations, financing, legal counsel, management consultant, project manager, public relations and sales.
To prepare workers for the renovation process, an internal memo set out guidelines for entering occupied units. At the head of the list was the requirement that three days advance written notice be given for routine visits. Efforts were made to schedule visits so residents on night shifts would not have their sleep disturbed. Smoking, carrying of food, using toilets and sinks in units were prohibited.
When renovation began, residents received a series of written notices explaining what work would be done, the expected length of the job and other information they might need or want to know.
They were informed in writing at each step of the development, and in one instance when workmen mistakenly began work on a stone wall bordering one couple's terrace, they received a letter of apology from the project manager's office.
Hospitality suites were set up in three vacant apartments to be used when a repair required the resident to be out of his or her apartment for any length of time. The units are furnished, have appliances, linens, dishes, cooking utensils, telephones and televisions.
"We are willing to do anything to make life easier," said project manager Jack Moran. "Whatever accommodations to make people's lives comfortable. To date, I can't think of an instance where we have thrown up cost as a limitation to doing something to help tenants."
"It is self-serving; these people are the best potential for sales, and it would be foolish to take an adversary position," Moran added.
The developers at Woodburn Village I also publish a periodic newsletter recapping events and information, inviting comments and participation by residents as well as answering specific questions.
Management consultant Wolfe of Community Management Corp. set up a residents advisory council and started a series of seminars explaining the public offering statement on tenant/homeowner rights, establishing a workable condominium budget and condominium unit purchasing and financing.
The developers ran into a special problem this summer when the air conditioning in the second section not owned by them had a major breakdown.
Kirby said: "We assisted the owners and rental managers with repairs and offered vacant units in Section 1 for people with health problems or small children. About 10 or 12 people used the units. It was during very hot weather, and we had two pregnant women who were near their due dates. Being without air conditioning then can be pretty uncomfortable. We are part of the community so we gave a helping hand."