Rent (out Of) Control

Rent (Out of ) Control

by Ken Garber

The vast amount of new rental propery building in the area, particularly between Ann Arbor and Ypsilanli, wili slabilize the overall rental market through free competition. 

- Lou Belcher, March 25, 1974, explaining why he opposed the rent control proposal on the ballot that year.

   Belcher, a Republican, won a seat on the Ann Arbor City Council in 1974, and went on to serve seven years as mayor. He served to be a better politician than prophet. New construction, sluggish since 1974, has not solved the problems of high rents and low vacancies. These problems are worse than they were thirteen years ago - much worse, by some accounts. The current situation has led to a new effort to put rent stabilization (rent control) on the ballot in 1988.

   In 1974 the rental vacancy rate was critically low at 3.5%. It is now about 2.2%, according to the University of Michigan Housing Office's most recent figures. Belcher's "free competition" has led to no competition. "In general, it seems to me, the way the market is now the landlords can charge as much as they want and they're going to get it," according to Jen Faigel, a staffer at the Ann Arbor Tenants Union. Statistics confirm that rents have been rising more and more rapidly in the last six years. Median rent is now $414, up 60% from $275 in 1980. In the last two years, according to a study conducted by the city's Information Services Department, rents have been increasing at an average rate of over ten percent a year. Much larger increases are common. "I'm hearing about rent increases averaging 25 to 35 percent a year" says Faigel.  A lot of people ask, "Isn't there a law to limit how much my landlord can raise the rent?"     

   There isn't yet, but work has begun. A core group of volunteers is meeting to draft a rent stabilization ordinance for presentation to the voters sometime in 1988. About five thousand valid petition signatures will be necessary to place the ordinance on the ballot. In drafting the law, proponents are adapting exisling rent control laws from other communities to fit Ann Arbor's needs.

   Rent stabilization will be highly controversial, to say the least. Many acknowledge our current housing crisis but resist any tampering with the free market. Michael Appel, a graduate student who is working on the rent stabilization effort, believes that some restriction of market forces is desirable, since housing is a basic necessity. "What rent stabilization says is that we will not allow the market to continually raise rent levels, since housing is such a fundamental community need," he sustains. This is not a new or radical concept. Utility rates, Appel points out, are strictly regulated. Nor is profit to be eliminated; Appel stresses that landlords will be guaranteed a fair return on their investment." Rent stabilization tries to balance the right of tenants to have affordable housing in their community."

   Although rent stabilization laws have been approved by voters in dozens of cities as diverse as Berkeley, Baltimore, and Boston, nobody in Ann Arbor believes winning here will be easy. "There's a chance," says Faigel. " I think it's a real uphill battle but it can be successful." Although 60 percent of Ann Arbor residents are tenants, most do not vote. Besides mobilizing renters, Faigel believes, proponents must convince homeowners that rent stabilization will work. "They're a very large swing vote that needs to be targeted," she says. Appel believes that can be done, since many homeowners are disturbed by Ann Arbor's conversion into an exclusive enclave of the rich: "Are residents of Ann Arbor comfortable living in a community where long term residents of that community can no longer afford to live?"

   The 1974 rent control initiative, although it won 42 percent of the vote, got little support from homeowners. The main reason, according to Julie Steiner, an activist at the time, was the huge sum of money spent by landlord interests. 'They had a tremendous amount of money, remembers Steiner who now directs the Sexual Assault and Awareness Center on campus. "It seems to me they did weekly mailings. Every resident of Ann Arbor got at least one mailing during the campaign." Records show that the landlord interest group, Citizens for Good Housing, spent $46,000 to defeat rent control, an unheard of amount for a local election (in contrast, Jerry Jernigan spent $27,000 this year in his successful campaign for mayor, the second highest total ever spent by a candidate for office). The Human Rights Party, which promoted rent control in 1974, could only raise a few thousand dollars.

   Jonathan Rose, a local attoney who helped draft the 1974 law (and a revised 1975 version, which also lost) agrees that money won the election. "The landlords were a lot more sophisticated about advertising than we were," he says. "They used the ad techniques of Madison Avenue to sway the voters." Rose also believes the law may have been too strict to win. 'The way the law was drafted was too idealistic - they may have taken too big a bite the first time. We should put forth a moderate ordinance this time. Whether we can get homeowner support or not I think depends on

(see RENT CONTROL, page 23)

Rent Control (from page 4)

how the law is written." Regardless of the details of the law, local landlords are likely to fight just as hard this time around. "It would be a bloodletting of the first magnitude," says Jim Morris, former president of the Ann Arbor Apartment Association, the principal landlord organization in town. Morris, who supported the affordable housing millage which lost at the polls in April, agrees that the poor are being gradually excluded from Ann Arbor. Yet he doesn't think rent slabilization is the answer. " I haven't seen a single case where it's worked," says Morris, adding that since 1974," rent control has become less rather than more of a solution because of all the failures." Morris claims that rent stabilization is fundamentally unjust, since all tenants are helped, whether or not they're in need, while all landlords and taxpayers foot

(more next page)

RENT CONTROL (from page 4)

the bill. He points out that the student populantion is increasingly wealthy, and that rent stabilization could largely benefit students, producing "a basic shift of wealth from the have nots to the haves." Larry Fox, staff member of the Housing Law Refonn Project of the University of Michigan Student Legal Services, agrees that the student body has become very affluent in recent years. He sees high rent as partly to blame. "High housing costs compound high tuition, so qualified students are going to Eastem Michigan, Wayne State, or Michigan State," says Fox. One way of having a more heterogenous student population is to make it more affordable for poorer students to live here."

   In any case, students would not be the principle beneficiaries of rent stabilization; Fox points out that only about one-fifth of the city's off-campus renters are students. There are still large numbers of working-class poor, senior citizens on fixed incomes, and working single parents who rent in Ann Arbor and are finding it increasingly difficult to continue living here.

   Rent stabilization proponents say that they hope to have a finished ordinance by September and welcome community input throughout the summer. A petition drive will be initiatied in the fall, with a goal of placing the law on either the April or November ballot. Interested citizens should attend the next meeting Wednesday, June 17 (see CALENDAR) or call Larry Fox at 763-9920.