March 15, 2006 - For many apartment renters in the Tucson area, the current boom in condominium sales could send them out searching for a new place to live.
That's the reality for many of the residents of The Boulders at La Reserve apartment complex in Oro Valley. On Jan. 4, the Oro Valley Town Council authorized Boulder Canyon Properties to sell off each of the complex's 240-units as condominiums.
The condo sale will begin sometime in the next few weeks, as soon as the Arizona Department of Real Estate approves the plan, said Caroline Auza, designated broker for OnSite Realty. Although tenants will be allowed to finish their current lease, they may not be renewed or, if renewed, for only six months, depending on how much demand OnSite gets for the condos, Auza said.
"It shouldn't take more than 18 months to sell off the condos," Auza said. "We don't kick tenants out. We let them stay until their lease expires. We try our hardest not to upset people."
Some tenants are upset anyway.
Susan Taylor moved in to her apartment in October, but found out after she had already signed her lease that the apartments would soon be sold as condos. Although she likes living at The Boulders, she says she can't afford to buy her apartment.
"I guess they're doing it to make money, but it still feels unfair. It's almost like they're running us out of here," Taylor said.
Phil Ward moved into his apartment at The Boulders last summer, and although he is having a home built in Sahuarita, he said many of his neighbors are upset about the condo conversion.
"My best friend lives here, and he's (angry). He loves it here, and his whole situation here is perfect," Ward said.
Although prices of the condos will not be announced until the Arizona Department of Real Estate gives it approval, most Tucson apartment-to-condo conversions sell for $150,000 to $250,000, a price Ward said would be too high for a condo at The Boulders at La Reserve.
"The price range sounds outrageous. And 30 percent will be owned by investors, meaning there will still be 30 percent renting apartments here. When you don't have more of the condos being lived in by their owners, it brings down the value," Ward said.
OnSite Reality will give tenants 60 days to purchase their apartment as condos before they are put on the market, although Auza said she expects only about 15 percent to stay as condo owners. Still, some residents are excited to be given the chance to purchase their apartments.
"I'm looking to buy one, so it's good for me," said Jake Bingham, an 11-month resident at The Boulders. "It's a really nice area, and I like it here."
OnSite will hold a realtor preview for the condos on March 16, and they will be open for the public to view on March 17. Auza said that her company decided to cap the number of condos sold to investors at 30 percent, while the other 70 percent will be primary or secondary homes for their purchasers.
"The majority of investors would like to keep the current tenant, and if someone wants to stay, we will try to match them up with an investor. The ones that really want to stay express an interest and come talk to me," Auza said.
Auza said apartments are being converted into condos all over the Tucson area as part of a larger boom in demand for condos in Arizona.
"The condo market in Arizona is nuts right now. People can't go to California because you have to pay a million dollars, and condos in Vegas got expensive really fast. A condo on the outskirts of Vegas will cost $500,000. Arizona has been really hot for the past year, and probably will be for the next two years," Auza said.
Even apartment complexes that aren't converting to condos are benefiting from the condo craze in Tucson. All the apartments that have converted into condos have created an apartment shortage, particularly in Oro Valley, which had relatively few apartment complexes to begin with, said Michael Brown, assistant manager for Sundown Village Apartments in Oro Valley
"The number of units we've rented has been up three percent since last year. There is simply less out there for people looking for apartments. Normally, you have to give out freebies to get people to move in, and we haven't had to since last September," Brown said. "I'm excited to see what happens this summer. Our regional boss thinks we're brilliant."
LuAnn Godshall, leasing consultant for Suntree Village Apartments in Oro Valley, said she thinks the condo conversion at The Boulders will end up making money for her complex.
"I know there is already a shortage of apartments in the area, and it drives our rates up. It's basic supply and demand," Godshall said. "With interest rates for homebuyers what they have been, that's where we've lost a lot of our customers. Now we're starting to make some of that money back."
Oro Valley Town Councilwomen Paula Abbot was the only council member to vote against the condo conversions at The Boulders last January. She said Oro Valley needs to keep the apartment complexes it has, and she doesn't want to see 85 percent of tenants at The Boulders forced to find shelter elsewhere.
"We've said we're committed to a variety of housing choices, yet we have very few apartments in Oro Valley. We need apartments and affordable housing," Abbot said. "I don't see why this should be approved just to make a profit."
Oro Valley Mayor Paul Loomis said there was little that the town council could do to block the condo conversion at The Boulders, even if it wanted to.
"I would be very hard to say 'no, you cannot turn your apartments into condos' as the state law is written. It's a right, a property right, that the property owner has. It would be very, very hard for a city or town to deny that without breaking the law," Loomis said.
Loomis, who once protested the construction of an apartment complex near his home before he became mayor, said the economy of Oro Valley now requires more affordable housing in the form of apartments since most homes in the town cost more than $300,000.
"I would advocate more high-density, affordable housing in certain parts of Oro Valley. Oro Valley has a lot of employment opportunities that aren't high wage earners," Loomis said, citing young doctors and nurses at Northwest Medial Center among them.
Despite this need for affordable housing, the construction of apartments in Oro Valley has continually been dogged by the widely held perception in the high-income suburb that apartment complexes will breed crime in their immediate area. Although he understands the need for affordable housing in Oro Valley, Councilman Terry Parish, who is also a Pima County Sheriff's Deputy, is among those who is concerned about the effect apartment complexes have on public safety.
"I'm not a big fan of apartments under any circumstances. There tends to be college kids, alcohol, and the recreational use of drugs, and a certain criminal element comes with those types of activities," Parish said. "The people that frequent (apartments) tend to be a more transient population. They tend to be younger and as a result there tend to be more minor types of crime in those areas."
Furthermore, Parish is not convinced that selling the apartments at The Boulders at La Reserve will improve the situation.
"Condominiums are not necessarily a solution for that. While it represents an opportunity for affordable housing, it also frequently represents an opportunity for investors to offer a condominium as a timeshare that has its own types of challenges as far as law enforcement. Timeshares basically are hotels that are rented for a week at a time to people on vacation, and as we know, people on vacation don't take care of a place or act like they do at home," Parish said.