Earlier quoted context omitted.
This...is not wrong. Pioneer Square in Seattle used to have a lot of flop houses, part of it being the original "skid row" (logs skid to the saw mill, really muddy and not a desirable place to live). My grandfather in Spokane unwittingly ran a rooming house we cousins called the "empty arms" (inherited from his sister), which housed a lot of people who were just barely getting by. Seattle's flop houses are mostly gon…
Publix in Seattle is a perfect example. A developer bought them out, them combined every 2-3 SROs to make a (still small) luxury apartment. I do not begrudge the developer. If you were to propose the opposite (taking an existing set of luxury apartments, and subdivide them into more rent paying units), it would probably be more profitable, but you would never get the plans approved.
I'm not sure it would be in this market. Catering to people with money is pretty profitable. Catering to lower income tenants...even with more scale on your side, might not work out, especially with the extra overheads involved (with Seattle's strict eviction laws, for example). Most small-scale landlords in Seattle are trying to get away from even moderate income housing that might require them to fund moving costs because of future rent increases (as well as rising eviction costs...it doesn't make much sense to rent to anyone but a very well funded and low risk techie).