Tag Archives: 606 apartments

Tax break was ‘absolutely critical’ to Bremerton apartment project

12096541_10206510262029092_907327638897249611_nThe 606 Apartments in Bremerton was the first project to make use of the city’s mutli-family tax exemption program, as I noted in a Sunday story.

PJ Santos, whose Lorax Partners company developed the 606, was off on vacation last week when I put the story together, but called Monday to give me his thoughts on the program.

Put plainly, Santos said the apartments couldn’t have been built without the incentive, which exempts to value of new apartment buildings from property taxes for up to 12 years.

“The project would not have happened if we didn’t have the abatement,” Santos said. “It was absolutely critical to make it viable.”

Rents in Kitsap are much lower than in Seattle, but construction costs are just as high. Santos aid the tax exemption, which saved 606 owners roughly $25,000 in 2016, made the project pencil out.

He noted cities are still able to tax the improvements as new construction once the exemption expires. But the delay in taxing the full value provides a much-needed boost for building Bremerton.

“It helps kick start development,” Santos said.

You can read more about Bremerton’s multi-family tax exemption here.

Average apartment rent in Kitsap reaches $1,077

12096541_10206510262029092_907327638897249611_nKitsap’s rental market remains tight, but rents and vacancy rates seem to be steadying.

Average rent at large apartment complexes was $1,077 a month in the first quarter of 2016, a $6 increase from the fourth quarter of 2015.

Rent was up about $116 from a year ago, a 12 percent change, according to numbers provided by Tom Cain of Apartment Insights Washington.

Vacancy rates ticked up for the third straight quarter, reaching 4.22 percent.

The opening of the 71-unit 606 apartments in downtown Bremerton likely played a role in increasing vacancies. Bremerton’s vacancy rate jumped from 2.64 percent in the fourth quarter of 2015 to 4.53 percent in first quarter of 2016.

Poulsbo/Bainbridge Island remained the tightest submarket, with a 2.91 percent vacancy rate.

In his quarterly report, Cain noted the shortage of homes for sale in the region has been a boon for rental owners.

“The tight home sale market and moderate level of new apartment construction will help keep pressure on rentals,” Cain wrote. “We expect the market to flourish this year.”

Here’s a graphical look at Kitsap rental trends: