SEASIDE - Mark Youso believes condominiums and expensive houses may replace low-income housing in Seaside, to the point where some poorer people have to leave.
"Cannon Beach is slowly moving north, is my take," he said.
Youso, the president of the Clatsop County Rental Owners Association, said increasing interest rates and property taxes are making it harder to own an apartment building.
He said huge offers for riverside land tempt landlords to sell to condo developers. "That land is worth more than those old ratty places," he said. "Some of these owners can't refuse it."
Developer Adam Dion said by tearing down cheap hotels he is cleaning up Seaside. Dion recently bought Colonial Motor Inn, Country River Inn and Bungalow City, which was being used as low-rent apartments, on Holladay Drive near 10th Avenue, and promptly demolished them.
In their place he plans to build gated, luxury condos.
Opinions differ on the best future for Seaside housing. Some see a need for condos and houses for retiring baby boomers and second homeowners; others want more low-income housing.
One thing is sure: The town is booming with development.
A project featuring 58 houses priced at about $400,000 each is being constructed on Avenue S. Olstedt Construction is preparing land for about 90 houses on Lewis and Clark Road, and is a part owner. The price of those houses has not been determined.
Youso is an owner of Seaside apartments. He is looking to sell the River View Apartments on Necanicum Drive to trade up to larger or more valuable properties. He predicts rental house rates will rise more quickly than apartment rates. As low-income people have to move, they may go to subsidized housing or developments farther from the coast.
Mayor Don Larson said Seaside will probably become more of a retirement town, because few jobs pay wages large enough to attract young families. Larson said second homeowners are buying in Seaside for the investment possibilities, the relaxed, slower pace and because "people love the ocean."
A Different ViewDonn Bauske wants to construct cheaper housing.
Bauske, who owns considerable property in Seaside, is planning to build bare-bones rentals for middle-class people, including multiple-family dwellings like duplexes.
He said more people are renting because they cannot afford to buy houses. So he sees the condo trend as "insanity." He said only people from outside Seaside - mostly vacationers - can buy the condos. "The average person can't afford to live in them," he said.
Bauske said with a large number of vacant lots going on the market, land prices will decrease. There is development all over Seaside, and there won't be enough people to fill it, especially because he believes Americans like big properties, not condos, Bauske said.
He believes hundreds of mortgages in Clatsop County will be foreclosed in the next few years, because interest rates, property taxes and insurance rates are all increasing. Therefore, he predicts the real estate market will become a buyers' market within the next two years.
When the housing market becomes tough in Oregon, condos are the hardest to sell, Bauske said. Condos are taxed at a higher rate than apartments, so it does not work to rent them like apartments, he said.
Bauske advises real estate as an investment, but said investors should consider maintenance costs, the cost of construction, the decreasing value of aging buildings and rental value.
Demand Is ThereYet condos are being snapped up. Les Bick from First West Realty is in charge of selling Dion's condos and two other sets under construction. More than two-thirds of the units in a 76-unit condo hotel at First Avenue and Holladay and a 10-unit gated luxury condo at Ninth Avenue and the Prom have been reserved.
Dion said condos have the advantage of no yard work or outside maintenance. "The demand is definitely there," he said.
He estimates that he displaced 17 people or families, all of whom were helped to find new housing. He said most of the residents are living in higher-quality places. He said the police were at Bungalow City frequently. "People that live in close proximity to the property, they're all happy to see them go," he said.
Seaside Police Lt. Dave Ham said Bungalow City has been very active, with everything from drug raids to domestic disturbances. However, he said because an apartment means a number of people live in a small area, apartments usually have some criminal activity.
He said the 1000 and 1100 south blocks of Beach, Columbia and Downing streets also have a high rate of reported crime.
Dion admits if others follow his lead, it will be harder to find low-income housing. However, he believes the condos will have a positive economic impact by attracting people to Seaside, "and we all know how much tourists like to spend money."