Upscale subdivisions, luxury condominiums, SROs, apartments, retail space and office space have been recent topics in this column. Along with these mainstream segments of San Diego’s development industry, I’ve also had a quarter-century interest and involvement in efforts to convert apartments to condominiums. As a real estate activity, it is on the rise, offering a partial answer to the affordable housing question.

My first introduction to condominium conversions was in the late 1970s. My friend Marvin Pilchen and I acquired the 108-unit Westwood Village Apartments in La Mesa. It was a 20-year old slightly faded and definitely aging two-story garden apartment complex. But its basic “bones” were good. It was low density, of basic structural integrity, had plenty of parking and a good mix of generously sized one- and two-bedroom units and was in an easy-to-locate safe neighborhood.

The city of La Mesa, which traditionally is open-minded about innovative development, approved the project. To make a long story short, the project was gutted and the units and exterior completely refurbished. It sold out in 90 days. The good news is 75 percent of the existing tenants bought their own apartment. The typical two-bedroom 1,000-square-foot unit sold for $34,000. Needless to say, for most of the buyers, a Westwood Village unit was perhaps the best investment of their lives.

The following year, our group converted the 106-unit La Bonita Apartments into condominiums. How about a two-bedroom 1,100-square-foot unit on the Bonita Golf Course for $42,000, completely refurbished?

A long time has passed since those buyer bonanzas, but the concept of the condominium conversion remains dear to my heart.

In most major urban centers in America, the conversion of aging apartments into condominiums is the primary vehicle for resuscitating neighborhoods. If you travel to Boston, New York, Washington, D.C., Miami Beach, San Francisco and Chicago, among other cities, you begin to realize that without conversions the housing stock severely deteriorates. That is because apartments rarely provide sufficient cash flow from the operation of a property to enable an owner to expend substantial funds to rejuvenate the structure. Only by changing the tenure of the project can you achieve its resuscitation.

In San Diego County, the average apartment project is more than 40 years old. In Europe and on the East Coast, that’s considered brand new. Then again, projects there are made of bricks and concrete to withstand inclement weather. Ours are made of West Coast materials, wear out faster and need to be resuscitated more regularly.

A visitor strolling through some of the recent condominium conversions in this county would be hard pressed to discover that most are senior citizens in disguise. The projects have undergone major surgery, with change-outs of windows, doors, appliances, countertops, cabinetry and bathrooms. Exteriors inevitably are refaced, roofs are replaced, entry treatments created and, very often, new recreation and community features are added.

To view the phenomenon in person, the curious can drive by Arbor Hill in Oceanside, Village Green in Escondido, Pacific Pines in Encinitas, Bernardo Pines in Rancho Bernardo, River Colony in Mission Valley and soon, the 256-unit Lucera in UTC. In addition, several dozen conversions of smaller projects are taking place throughout North Park and Hillcrest. Such local stalwarts as Pacifica Properties, Premier Properties and American Property Enterprises have led the way in the local conversion industry and deserve great praise for their efforts.

As a most poignant example, Arbor Hill is a 25-plus-year-old project that was aging poorly. It needed far more than a facial and a massage. Pacifica Properties performed major surgery, replacing almost everything except the studs, and added a wonderful gated entry treatment. The completely refurbished one-bedroom units were offered for $138,000 and two-bedroom units for $177,000. In San Diego, that’s a giveaway. But don’t run — they’re sold out, of course. Sales averaged 10 condominiums per week, somewhat indicative of the burgeoning demand for ownership housing.

Two other important elements to the conversion business should be considered: the promotion of home ownership and the dramatic enhancement of property taxes.

Russ Valone, my partner and the CEO of MarketPointe Realty Advisors, recently completed an analysis of the pricing of condominium conversions compared with the pricing of new condominium units. On average, the conversion units sold for 25 percent less than the new units. The importance of this is that the conversion unit is proving to be the greatest source of entry-level housing in the county. Our discussions with the converters indicate that the vast majority of the buyers are young singles and couples for whom this is their first home.

In a county that has a dismal 55 percent ownership record — compared to 70 percent in the rest of the nation — the conversion of renters to owners is imperative. Numerous studies have shown that neighborhoods in which owner occupancy is dominant have lower crime rates and, of equal importance, far higher levels of school performance at all grades.

The second important factor is property taxes. When converted to condominiums, the typical apartment project increases its property taxes 300 percent to 400 percent. To wit, most often the project, as a rental, has been owned for eight to 10 years and was purchased for significantly less than today’s value. Therefore, its property tax is very low. When the property is purchased at today’s value, converted, upgraded and sold to a condominium buyer, the property tax is increased to 1 percent of the sale price. If cities are looking for ways to enhance their revenues, one of the easiest ways is to promote conversion of apartments to condominiums.

No doubt the naysayers will protest that the conversion of apartments into condominiums decreases the rental supply and therefore increases the housing crunch. That is an error in the thought process. After all, the inventory of multifamily housing does not change when its tenure is changed. The only difference is that the same population can now own rather than rent and that must be seen as a positive contribution to the economy, and to society. Obviously, those residents who do not buy will move, but the supply of rental units is increased by the persons moving out of a rental unit into their condominium.

On balance, the scales tip toward conversion as a most efficient way to rejuvenate our multifamily housing supply and aging neighborhoods; provide young San Diegans with ownership tenure at reasonable prices; and provide greatly enhanced tax revenues to our cities.

Alan N. Nevin is director of economic research with MarketPointe Realty Advisors (www.marketpointe.com), a consultancy providing real estate and demographic statistics, feasibility studies and litigation support to the California land use industry and legal professions.