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. FAMILY RESTAURANT * HAMBURGERS ?ASURE MS * CONEY ISLANDS SMILING SPEE9Y SERVICE CARRY-OUT SPECIALISTS NO WAITING - PLENTY of PARKING I~ INSIDE SEATING OR EAT IN YOUR CAR. OPEN II AM DAILY \62-002 3325 WASMIENAW RD. t K .ANN ARBOR 2 BLK$.W. of ARBORLAND Michael Koeneke, / / S ,:r ' A I'S .: 1" 1 'S q, N. A i ' No matter where you'll live in Ann Arbor, or where your classes are, you're always near one of Ann Arbor Bank's four convenient campus offices. We're ready to serve you with 42 windows ... walk-in . . . drive-in .. . walk-up. 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