New houseboat development on Lake Union is buoyed by demand

Over the past century they've morphed from rickety structures once derided as "the cesspools of Seattle" to romantic and much desired "Sleepless in Seattle" homes.

But one thing many people thought was set in stone about Seattle's houseboats was that there could be no more added to the 500 or so that line Lake Union and Portage Bay.

Now comes Fairview Landing, a brand-new community of floating homes that will add eight houseboats to what is arguably the city's most iconic neighborhood. Being developed at 2369 Fairview Ave. E., the project replaces a deteriorating 40-slip boat marina.

How could this happen?

"There's a belief that you can't put new houseboats in — I've heard that for years," said Elaine Eigeman, an agent for RE/MAX Metro Realty who's sold floating homes for 25 years. "It's not true. What is true is the codes are so difficult that most people don't have the property to do that."

Two who do are Bob and Molly Cadranell, the long-time Lake Union property owners developing Fairview Landing. How and why they've succeeded illustrates why there aren't more floating homes to meet what Eigeman says is a huge demand that's driving prices into the stratosphere.

Indeed, the romance of living in an artsy, funky, free-wheeling community where owners can moor their boats next to their homes has led to prices of $1.5 million plus. That's what several buyers have paid for floating homes with glorious open-water end moorages around Lake Union. The ones closer to shore command $400,000 and up.

So great is the demand that all eight of the Cadranells' new slips have been sold to buyers who'll build their own floating homes. Fifteen buyer hopefuls are on a waiting list should one of the original eight drop out.

A colorful history

The first houseboats on the lake were built as rough housing for millworkers' and fishermens' families. That was around 1900.

During the Depression, a large number were added as temporary housing for poor and homeless people. Often cobbled together, they moored rent-free wherever they could find a spot and dumped their raw sewage into Lake Union. Thus the "cesspools of Seattle" comment, uttered by a Seattle politician intent on exterminating them.

By the 1960s, they'd become cheap housing favored by artists and students.

Today's residents are mostly young professionals, empty nesters — and in one case, out-of-towners who saw the movie "Sleepless in Seattle" and bought its real-life set.

"There are fewer and fewer of them available for sale each year because people are holding onto them, so they really are Seattle's special waterfront treasures," said Rick Miner, a Coldwell Banker Bain agent who sells them and lives on one.

Before Fairview Landing, the last significant houseboat development was Roanoke Reef two decades ago. It wasn't an easy build.

A developer had begun work on an over-the-water apartment building along Fairview Avenue. The state said it violated its shoreline master plan, and the battle was on.

Seven years of court fights later, the developer lost, and the Roanoke Reef floating homes community was built instead.

That, and other legal battles involving houseboats, basically showed all comers that any shoreline development would be closely watched for compliance with various government regulations.

The rules cover everything from height to fire and safety codes to shoreline issues involving wildlife habitat. The city requires all houseboats to be adjacent to approved floating-home moorages and to be hooked up to sewer and water services.

"So many people think they can just find a space for a floating home, but they can't," Miner said.

(Besides houseboats, the city also allows house barges, which aren't required to be tied to a specific place. However these barges are limited to those that existed as of June 1990, and they number fewer than 40. They're generally smaller and less expensive than houseboats.)

Over the years, there have been rumblings that adding new houseboats would become prohibited, and it was during one of these times that the Cadranells got serious about redeveloping their 40-slip marina, Cadranell Yacht Landing. It had been in the family since 1970 and sat over underwater property measuring 162 feet by 138 feet. (Lake Union is one of the rare lakes that has private ownership of submerged land.)

"We were at a point where land use was changing all around us," said Molly Cadranell.

Lake Union's early development had been mostly industrial, and the city continues to encourage marine-connected commerce for its shores, she said.

"Environmental regulations also were changing, so it was harder and harder to work with boats on the water — or over the water," Molly Cadranell said. "We took a look at the economic side of it, and it made sense to have a change of use instead of putting money into new docks, which needed to be replaced."

Ellen Mohl, a commercial real-estate agent who has researched the Cadranell property, thinks the family made the right decision.

"There's a dearth of places for houseboats in the city, so in terms of financial return, I think it's very smart on their part," Mohl said. "That's the best use for that property."

Still, developing a houseboat community was easier decided than done because its so regulation-intensive. Over the last few years, Molly Cadranell figures the family has spent "hundreds of thousands of dollars" on environmental studies, shoreline studies, planning studies.

Take the issue of shoreline. Decades ago, Lake Union was significantly smaller. When the water level was raised in the early 1900s, it not only submerged landowners' property, but city property, too. This means a significant swath of Fairview Avenue East is underwater; the current above-ground lanes represent only a portion of the true width of the avenue.

As a result, private property owners who have underwater holdings along Fairview don't own the adjacent shoreline. The city does. So unless they also own property upland, across Fairview Avenue, they don't have spaces for parking. And the city requires developers to provide parking.

The city also requires any new houseboat communities to have a wide swath of open water on each side of the new dock and its houseboats, as well as water sightlines from these homes.

"People say dogmatically that there won't be any more of them, and the reason they say that is because it's like a needle in a haystack to find upland parking and open water and sightlines," explained Eigeman. "I'm not going to say never, but I'm going to say rarely will it happen."

As long-time landowners who own property on both sides of Fairview, the Cadranells could meet all the requirements, and no rezoning was necessary.

Gone is the old boat moorage. In its place is a new concrete dock, complete with grate-covered "portholes" to let light shine down for the sea creatures below.

They've also planted the shoreline with native habitat and added special underwater gravel should a salmon on its way eastward through the Locks decide to spawn there. (Unlikely, Cadranell conceded.)

Much of this work was mandated by various shoreline regulations.

Those who bought the eight new houseboat slips, for about $700,000 each, now own a cube of space in the water and a share of the condominium dock.

Unique opportunity

One who's building a home there is Gil Wood, president of Auburn-based Timberland Homes. A longtime boater and friend of the Cadranells, he jumped at the chance to be part of the new community.

"There aren't many opportunities to have this kind of a view and a new house, too," Wood said. "Living there is going to be fun."

Wood's firm is building his houseboat and several others, including one for the Cadranells. Each home can have a footprint no larger than 29 feet 6 inches by 37 feet 6 inches and be no taller than 21 feet from the waterline. Those are city regulations.

They'll sit on concrete and Styrofoam bases, and some will have underwater basements, thanks to a lake depth along that dock that ranges from 10 to 30 feet.

"There's no crawl space, so that's a bit of a challenge," Wood joked of those without basements, but otherwise the new homes will be much like regular landlubber abodes. Each will be two stories, about 2,000 square feet, and when all is said and done, Cadranell estimated the owners will have $1.1 million to $1.6 million invested.

Is it worth it?

Eigeman said houseboat buyers tell her it is. Many wait months or even years before finding a floating home to call their own.

"One way to look at them is as the smallest parcels of waterfront in the city — and they're right in the city," Eigeman said. "That's where their value comes in, and no two are alike."

Elizabeth Rhodes: erhodes@seattletimes.com