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March 22, 1974 - Image 2

Resource type:
Text
Publication:
Michigan Daily, 1974-03-22

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MMMMMEM

THE MICHfiGAN DA1LY

Frida , March- 22, 1-914

SEaiment? Rent control splits electorate;
IBERWOCKY issue causes sharp disputes

(Continued from Page 1) The lawyer would represent the
diate families over the past three board in any legal tests the legal-
years. ity of rent control in the city and

BOARD MEMBERS will be al-
lowed to serve only two consecu-1
tive terms and will be prohibited
from running for any elective of-
fice while serving on the Board.
Board members will be elected
by proportional representation,
with each political party getting a
number of seats on the Board cor-
responding to their share of the
vote in the board election. Parties
would file slates, and board mem-
bers would be elected city-wide
instead of by wards.
Supporters of proportional repre-'
sentation claim it is fairer, since
all the voters of one political per-
suasion can't be lumped into one
ward, thus dilating their power.
THE BOARD would have full
jurisdiction over rents in the city.
The board would set rents, create3
regualtions for enforcement, hire
and fire employes, and retain a
full-time attorney. The boardrwould
also have the power to recom-
mend legislation to City Council
which it deemed necessary to aug-
merit the original amendment.

Daily Photo by KEN FINK
Drought described
Ambassador T. Yaguibou, representative from Upper Volta to the
United States and the United Nations, waits outside an Angell Hall
classroom yesterday. Yaguibou described the social and economic
impact of the catastrophic African drought to University students.

would also prosecute any cases
against. landlords resulting from
noncompliance with board direc-
tives.
The board would be required toI
meet at least once a month, and,
meetings must be open to the pub-.
lic. Transcripts, and all other re-;
cords and documents of the board
would also be accessible to the
public.
BOARD MEMBERS would re-'
ceive compensation from the city
at $3.50 an hour, with a maxi-!
mum possible salary of $4,800
yearly. According to those who
drafted the legislation, board work
is expected to require about 25-30
hours per week, although it could
become a "full-time job for some-
one ambitious."
Since there is no present Rent
Control Board, the City Adminis-
trator would be directed to appoint
an interim Board to serve until
the next municipal, elections in
1975. Members would be appointed
according to the percentage of
votes their party received in the
1974 elections.
If rent control passes, around
June 1 landlords will be given 30.
days to file information pertinent'
to determination of operating ex-
penses and taxes. Landlords will
be charged a $15 filing fee per:
rental unit. A total of $200,000 of
revenue is expected, an amount
which would finance the activities
of the Board.
THE FILING of expense and
profit statements may be among
the most important aspects of the
new law, since it would end the
mystery surrounding the actual
profits of city landlords. At pres-
ent, the subject is clouded by a
lack of information.
About Aug. 1, the board would:
authorize rent rollbacks to 1972-73
levels or let them remain at pres-
ent levels, whichever is less, until
a final determination of appro-
priate rent could be made.
If a landlord fails to file infor-
mation on units, he first receives
a seven day late notice. If he is
still delinquent, the Board then
sets the rent at zero for that

/ o...

CRITICS OF the proposal con-
tend that the zero.rent is a depri-
vation of due process of law, but
HRP claims the harshness the
measure is necessa r"or enc ce-
ment. They also point that the
landlords can extricatthemselves
from the jam by complying with
the Board's request f r informa-
tion.
Subsequently the B*rd would
set a "fair rent," using a formula
which allows the landlord all oper-
ating costs, plus 50 per cent of all
maintenance costs and 2 per cent
of all capital improvements as
profit. The capital improvement
profit carries on for five years.
The 50 per cent of maintenance
is supposed to be an incentive to
keep up property, as is the capital
improvement credit.
THE OPERATING costs include:
-full maintenance fees;
-management fees up to 6 per
cent;
-property taxes;
-capital improvements, and;
-repayment on the mortgage,
plus up to 8 per cent of the in-
terest on the mortgage.
Management fees above 6 per
cent are disallowed as excessive,
as are mortgage interest above 8
per cent, and depreciation. Depre-
ciation is disallowed on the theory
that age does not determine value,
whereas ability to produce revenue
does, and in the absence tf new
housing, old housing makes as
much money as new.
The other measures are designed
to shift the burden of inflation
back onto landlords.
THE BASIC intent of the HRP-
backed rent control proposal is to
create a stop-gap measure. HRP
admits that rent control is only
short term, and that publicly sub-
sidized housing is the only final
solution, since the private sector
has failed to build any housing in
the central city area in the last
several years.
Another intent of the proposal is
to take tax advantages away from
the landlords and ease the burden
for tenants. Every part of the pro-
posal is designed to protect the
tenant's rights, since landlords
have a number of built-in advant-
ages, HRP says.
City tenants pay rents which are
the second highest in the nation
and also spend a greater percent-
age of their income on rent than
the national average. One immedi-
ate purpose of rent control is to
make rents more reasonable.
BUT THERE are serious' prob-
lems with the proposal. It does not
provide incentives for more build-
ing, and in the long run, the total
supply of housing is likely to de-
cline, since houses now being rent-
ed profitably may be sold for use
as single-family dwellings.
This important issue has gener-
ated much controversy this year,
and many harsh words. Two in-
terest groups have entered the
campaign in addition to the tradi-
tional political parties and candi-
dates.

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