27, 1968
Page Six
1-HE MICHIGAN DAILY
Tuesday, August .
Page Six THE MICHIGAN DAILY Tuesday, August 27,1968
V#
SHA
gains
s trength
for
landlord,
lease
reform
i
By JOHN GRAY
In the winter of 1968 Ann Ar-
bor apartment owners faced two
things that they hadn't seen for
a long time: a shortage of ten-,
ants and an organization of stu.
dents actively attempting to force
them to change their leases and
improve their service to the stu-
dent community,
The Student Housing Asso-
ciation, a committee of Stu-
dent Government Council, and
its sister organization, the Stu-'
dent Rental Union (SHA-SRU)
reacted in January to what it,
felt to be years of exploitation
of the student by Ann Arbor
Realtors by instituting a selec-
tive boycott of Apartments Lim-
ited, Ann Arbor's largest apart-
ment ianagement firm.
SHA-SRU's success in achiev-
ing its immediate aim, an eight-
month laese from all landlords,
was limited. But this was not
through lack of student support.
Support for the SHA-SRU
boycott was unified probably
because private landlords have
for a long time been recognized
as Ann Arbor bad men.
The case against the apartment'
owners and managers is a strong
one, one that has been building
since a construction boom start-
ed in 1961.
An enrollment surge triggered
the construction. Univer-
sity enrollment has increased by
10,285 students since 1960, while
only 1,465 new living spaces have
been provided by the University
in the same period.
Small, poorly designed apart-
ment buildings began to be built
around campus, designed not to
last but to yield a quick return
on the builder's investment.. In
1961 the largest apartment man-
agers in the area banded together
and formed the Ann Arbor Pro-
perty Managers Association. At
the same time all the managers
began demanding that students
sign a twelve-month lease for
their off-campus apartments.
Rents began to soar as build-
ing fought to keep up with the
increased demand for off-campus
accommodations. From 1960 to
1967 the average rent for a new
apartment rose 2T percent from
$55 to nearly $70 per person per.
month, one of the highest rent
scales in the country, higher even
than the average rent for an
apartment in mid-town Manhat-
tan.
The apartment market in Ann
Arbor is hardly highly competi-
tive. Three large firms manage,
and effectively control, more than
'half of the off-campus housing ,in
the central campus area. As rents
have increased, profits have risen,
and the hold of these firms on
the market is, if 'anything, still
increasing.
Estimates of the profits of Ann
Arbor's apartment owners and
managers varies according to who
is doing the figuring, but the best
estimates available indicate that
each apartment building yields an
average of 18-25 per cent annual-
ly,
Other estimates vary from the
very conservative 7-10 =percent to
the wildly improbable 75 percent.
Students have felt the disad-
vantages of the immobile Uni-
versity market through more
than rents.
The fact that' students have to
live in Ann Arbor, frequently
within walking distance of the
campus, has forced them to ac-
cept renting conditiozis and serv-
ice they would, in a freer mar-
ket, avoid. ,
f Managers, more often than
landlords, are the center for stu-
dent complaint.
In a typical situation, the owner
has his apartment built and just
turns over control to the manage-
ment firm along with 7-10 per-
cent of the gross revenue and co-
lects the profit or sells out when
he wants to.
Because of this arrangement,
students rarely if ever come into
contact with their actual land-
lord. The landlord's representa-
tive is frequently one of the big
three management firms-Apart-
ments Ltd., Charter Realty or
Campus Management.
SHA-SRU, which serves as a
'student complaint service and
gadfly to the apartment mana-
gers, has built up a file of com-
plaints that has led it to charge
the major managers with a num-
ber of inequitable practices.
Most complaints filed with
SHA-SRU are for poor mainten-
ance and the withholding of dam-
age deposits.
When a student moves into an
Ann Arbor apartment, he typical-
ly is required to deposit one
month's rent with the landlord
as a damage deposit, which is to
be returned when the lease ex-
pires or used to cover the cost of
damages to the apartment caused
by the student.
Many students have complained
that they have been overcharged
for damages or have been charged
for normal wear and tear on the'
premises. Some students have/
merely had their damage deposits
withheld with no explanation.
SHA-SRU expanded its com-
plaint program to meet rising stu-
dent's dissatisfaction' with the
renting situation.,
SHA-SRU soon became aware
that in many cases where the
student-tenant seemed to be in
the right, he was legally in the
wrong because of the nature of
the lease he had signed when he
moved 'into his apartment.
Last fall the students got to-
gether with the Office of Off-
Campus Housing to produce a new
lease---one which would be Uni-
versity-approved and which would
attempt to give the students a
better break.
By January the lease was ready,
at least in a roughbform. It was
widely advertised by SHA1SRU
as the "University eight-month
lease."
Eight month rental agree-
ments, through the use of the
new lease were to be the start-
ing point for SHA-SRU's battle'
for better treatment from land-
lords.
The ironic part of SHA-SRU's
fight was that the new Univer-
sity lease was; not really an
eight-month lease.
It was advertised as an eight-
month lease because of some uni-
que phrasing in the section des-
cribing term and rent.
The section is divided into three
parts. Part A is an agreement to
rent for a period not greater than
eight months, B is an agreement
to rent for a period not greater
than four months and C gives
the amount of rent.
This means that if the land-
lord and the student signing the
lease want to rent for a twelve-
month period they must complete
parts A and B on the University
lease. If they agreed to rent for
only eight months, only part A
should be filled out.
Most, if not
may be used to
month period
agree.
all, private leases
rent' for an eight-
if both parties
Acceptance of the new Uni-
versity lease, however, came to
be synonymous for many stu-
dents and landlords with auto-
matic eight month leasing.
The new lease does provide
more protection for the students
than any private lease now on the
market. This protection is most
important in the areas of damage
"deposit and tenant withdrawal.
The University's damage deposit
clause requires itemization of all
charges against the deposit claim-
ed by the landlord, and that the
unused portion be returned to
the student within 20 days of the
lease's expiration.
The lease currently used by
Apartments Ltd. specifies only
that itemized costs of damages be
given to students and allows 30
days for repayment. Many stur
dents have complained that their
damage deposits seem to be eat-
en up by unspecified "cleaning"
charges.
The University lease provides
students who are drafted or who
withdraw from school for medical
reasons with an automatic can-
cellation of their portion of the
lease. Although federal law al-
lows drafted men to terminate.
their leases, most landlords using
private leases will hold his room-
mates responsible for his portion
of the rent.
Even though the new lease
did not spell out a major pol-
licy change, SHA-SRU had no
expectatiort that the major
management firms would ac-
cept the new lease when it came
out-at least, not without some
coersion.
In order to try to ensure that
some managers at lease accepted
the lease, SHA-SRU started an
educational progra mto acquaint
landlords with the new lease and
a student boycott of Apartments
Ltd.
Apartments Ltd. was chosen for
the boycott not only because they
were one of the major manage-
ment firms to not accept the new
University lease, but because they
had been the source of many
maintenance complaints.
SHA-SRU got the backing of
SGC and Graduate Assembly (the
semi-official governing body for
graduate students) and launched
a publicity campaign to urge .stu-
dents to rent from anyone but
Apartments Ltd. unless they
adopted the University lease.
Even bodies traditionally hesi-
tant to back SGC action, such as
the SHA-SRU boycott. Hunt
Engineering Council, supported
House Council and South Quad
Council voluntarily contributed to
SHA-SRU to defray the advertis-
ing costs of the "Wait for Eight"
campaign.
When landlords threatened in-)
junction against the boycotters,
University President R o b b e n
Fleming commented that he could
see "no legal bar to picketing."
He compared the plan to organ-
ized labor tactics.
"Two factors," he said, "will
govern the students' success in
the boycott: the extent to which
students support it, and how
much mutual support city land-
lords will give each other."
The possibility of University
support for the SHA-SRU activi-
ties was even discussed.
Fleming commented, "The Uni-
versity should definitely take a
stand on minimal housing stand-
ards, such as safety and health
in privately-owned student apart-
ments."
SHA-SRU and their support-
ers hoped to drive Apartments
Ltd.'s vacancy rate up to such
an extent that it would be prof-
itable for them to accept the
student demands.'
This action was planned be-
cause of the new tenant short-
age in the Ann Arbor apart-
ment market.
For the first time in nearly a
decade, vacancy rates were be-
ginning to approach a height
where consumer pressure could be
successfully employed.
Although no completely accur-
4
Ann Arbor apartments prove su mptous but too expensive
ate figures on vacancy \rates are
available, University officials
have estimated that it is as high
as five to ten per cent..
Meanwhile, student'interest in
proper maintenances added a new
dimension to the boycott when 51
residents in various Apartments
Ltd. buildings agreed to a rent
strike. On the basis of mainten-
ance complaints made as long ago
as August, 1967, the residents gave
their rent to the University's Off
Campus Housing Bureau rather
than Apartments Ltd.
They agreed }not to pay, rent
until all maintenance complaints
had been settled.
Then SHA Chairman Michael
Koeneke, BAd '69, who is cur-
rently SGC president, called the
rent strike "another pressure
point for an eight month lease.''
However, despite all pressures,,
Apartments Ltd. did not feel
enough of a pinch this year to
accept the idea of an eight-
month lease even with increased
rents to cover the expense of
vacancies in the summer. But
many smaller firms, perhaps
out of a fear that boycott tac-
tics would be used against them,
did accept the lease.
SHA-SRU had complaints even
about these apartments, though.
The students recognized that
some rent increase was necessary
if landlords were to rent on an
eight-month basis, but they
charged that the 15-25 per cent
hikes that had been made were
unjustified. However, they're not
that worried about rates now.
Their plans are to first force ac-
ceptance of the eight-month lease
and then to begin agitation for
lower rents.
There have been, according to
SHA-SRU, some tangible 'bene-'
fits that have come from the boy-
cott in the area of service to stu-
dents from Apartments Ltd. They
contend that Apartments Ltd. has
been more attentive to individual,
complaints and perhaps a bit
more anxious to please than ever
before.
This isn't enough for SHA-SRU.
Next year they plan to have a
better-planned, better organized
boycott of Apartments Ltd. 'New
construction in Ann Arbor this
summer should make the vacancy
rates even higher and student
leaders are at least moderately
confident that they can make a
boycott work this year.
They plan to force Apartments'
Ltd. to accept their terms and
then turn to. the other two major
firms. If they are successful they
will be in an immensely favorable
bargaining position with the re-.
maining landlords. By next sum-
mer, the students may have won
The students have already
won a certain' ,tactical and
moral victory. SHA-SRU, which
was scoffed away only a year
ago, has come to be accepted
by the Ann Arbor landlords as
a legitimate force to be dealt
with.
Renters too now reobgnize
SHA-SRU as their agent in a
sort \of collective bargaining
process. A basis has been built
on which the . students may
count for innovative, determined
action on their behalf.
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