City officials and apartment complex owners say the "condo craze" has come to Carson City. And the city planning department is crafting an ordinance that allows for apartments to be converted into condominiums, a first for the city.
Sam Terry, a partner in a Carson City company that would like to convert its high-end apartments to condos, said Monday apartment owners and renters can benefit from the conversion.
"With the same amount of money they're paying for rent they can be paying for a mortgage, with about 5-10 percent down," he said.
According to Carson City records, a half-dozen apartment complex owners have requested the city develop a code for conversions. Terry said in his talks with the city and other owners, up to four apartment complexes could make the conversion.
The city would require that condos be brought up to current building standards. That means newer apartment complexes would have a more cost-effective conversion than older complexes.
"Right now we don't have a condo conversion ordinance in Carson City," said Jennifer Pruitt, Carson City senior planner. "So if they wanted to convert apartments into condos we wouldn't have a mechanism for them."
She said it could be several more months before an ordinance is approved. In some cases, Carson City's existing condo developments were built using the planned-unit development process. There are fewer than 10 condo developments in Carson City, the senior planner said.
Terry said those who own their own home most often take better care of it, which enhances the value of the neighborhood.
"There's a big push to bring affordable housing to Carson City and by doing a condo conversion you're effectively bringing affordable housing into the city," he said. "You've eliminated the land cost. Land is real high right now."
With land and housing costs as high as they are now, buying a condo could cost about $100,000 less. The average cost of a Carson City home was $358,000 in the third quarter of 2005. Terry said one of his high-end condos could sell for $250,000. A more affordable 1,000-square-foot condo could start at $220,000.
"That encourages first-time home buyers and the elderly, who don't want the hassle of dealing with yards and maintenance issues," Terry said.
Apartment owners on average will invest $5,000-$10,000 in each apartment conversion, he said. As many as 60 percent of the renters are lost when an apartment complex converts. But often up to 25 percent of the condos are bought and turned back into rental spaces.
According to Carson City's draft ordinance, the developer of a conversion condo project would have to post notice of the sale 90 days before requiring a tenant to vacate.
Carson City supervisors must also approve the tentative map before the intent to sell notice is posted.
Reno and Sparks prohibit the conversion of existing apartment complexes into condos when the apartment vacancy rate falls below 5 percent. Carson City could adopt a similar provision, but it would have to contract with a firm to calculate the vacancy rate. Real estate professionals contacted on Monday didn't know of a company that calculates the city's vacancy rate.
n Contact reporter Becky Bosshart at firstname.lastname@example.org or 881-1212.