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March 27, 1974 - Image 4

Resource type:
Michigan Daily, 1974-03-27

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Eighty-Four Years of Editorial'Freedom
Edited and managed by students at the University of Michigan
420 Maynard St., Ann Arbor, Mi. 48104 News Phone: 764-0552


reports: Rent control


The rent rate ranking game

AS THE RENT control debate ap-
proaches peak intensity, a new con-
troversy has emerged concerning Ann
Arbor's median rent relative to the na-
HRP, in Its campaign literature sup-
porting the Rent Control Amendment,
has produced a figure placing the me-
dian rental level in the Ann Arbor metro-
politan area second only to that of Stam-
ford, Connecticut.
Meanwhile, Mayor Stephenson's Blue
Ribbon Citizens Commission on Rent
Control has refuted the HRP ranking.
The Commission claims that city rent
levels are not second in the nation but
indeed only 17th in the state of Michi-
The discrepancy here merits comment.
In arriving at their "second, nation-wide"
figure, HRP was comparing Standard
Metropolitan Statistical Areas as delim-
ited by the U. S. Census Bureau. Ann Ar-
bor's SMSA constitutes Ann Arbor and
the remainder of Washtenaw County.
the other hand, took into account
only the city, and compared its rent
levels with other cities and towns. The
Commission, in attempting to discredit
HRP's use of SMSA's at a ranking basis,
claims that many SMSA's, unlike Ann Ar-
bor, include large areas of low-rent sub-
standard housing (such as the Detroit
metropolitan areas) which tend to pull
down the higher rent rates of outlying
While HRP may have walked on shakey
ground in' depicting all of Washtenaw
County as the Ann Arbor metropolitan,
area, its "second highest" figure never-
News: Dan Biddle, Stephen Hersh,
Claudia Lewin, Mary Long, Judy Rus-
kin, Stephen Selbst, Jeff Soernsen
Editorial Page: Brian Colgan, Paul Hask-
ins, Marnie Heyn
Arts Page: Ken Fink
Photo Technician: Allison Rutton

theless more accurately represents the
real-rent situation in Ann Arbor.
The SMSA standard may not take into
account slum areas in other metropoli-
tan areas, but neither does the Commis-
sion's reasoning account for Ann Ar-
bor's substantial tracts of sub-standard,
poorly constructed, and shabbily main-
tained residential areas which resemble
slums in every way except their exhorbi-
tant rent rates.
(N ADDITION, IT would be unrealistic
to establish the city limits as the
physical parameters of the Ann Arbor
rent dilemma. In the past few years, a
greater number of students and other
renters have been forced to find hous-
ing farther and farther away from the
city center, many beyond the city limits.
Even so, these renters do not find their
inconvenient locations compensated by
more reasonable rent rates. The median
rent rates in Ann Arbor's outlying areas
is little less than within the city. That is,
things are tough all over.
Included among the sixteen cities
which Mayor Stephenson's rent control
commission have mentioned as having
higher median rent rates than Ann Ar-
bor are Southfield, Birmingham, and
Beverly Hills, residential bedroom com-
munities which are heardly comparable
vto. Ann Arbor' In terms of median income
or cost of living.

SINCE ITS BIRTH, the rent control pro-
posal has been the focus of an emo-
tionally charged struggle between its ad-
vocates and adversaries. Due to the re-
sulting conflicting reports of the essence
and effects of rent control, members of
PIRGIM have carefully studied the pro-
posed Charter Amendment.
What resulted is an evaluation of the
Amendment itself and speculation of its
effectiveness in dealing with housing short-
ages, high rent and a manipulated market,
the housing problems of Ann Arbor.
The language of the amendment is de-
tailed and exact. It leaves very few am-
biguities concerning its intent. The pro-
posal contains a well-defined process for
establishing .a nine-member Board to set
maximum allowable rents, a well-defined
formula for determining those rents, re-
quirements for registrationby landlords of
rental units affected by this proposal, and
a source of revenue for the Board's opera-
tion by way of registration fees. The fees
would be $15 per unit, payable by the land-
lord, and $5 per rental adjustment re-
quest, payable by the person making the
THE BOARD is given the power to ap-
point a staff, including an attorney. It also
has the power to make studies, conduct
hearings, collect information in the form
of witnesses, documents, files, books and
Provision is made for appeal of an? of
the Board's decisions once per year per
In short, the mechanisms and power for
rl' nroposal's effectuation, is passed, exist
explicity in it's content.
Provided in the formula establishing the
maximum monthly rent is:
100 per cent of the landlord's reasonable
operating expenses,

n 4 . : . . ...%. vm.:....w::"{.......... ..a.. .. .m... .". .. .,.ty..s ^.
"If passed, the rent control proposal could probably be effec-
tive as a stop-gap measure to lower rents and somewhat
change the manipulativeness of the housing market."
p..}:r,.,.}r. e.t r}""rR"};"fi:":r. svtrJ.}}:fi:?} f." r. :..s S ;...:t. g+..

100 per cent of the landlord's property tax
100 per cent of the landlord's principle and
interest mortgage payments (the interest
can be no greater than 8 per cent),
110 per cent of reasonable capital im-
provements costs (dishwasher, structural
improvements), and
150 per cent of reasonable maintenance

HOWEVER, EXPENSES in the formula
are based on the previous year's cost and
no provision is made in the formula, for
an inflation factor.
Landlords have the bulk of financial re-
sponsibility for the Board through registra-
tion fees that are not deductable as oper-
ating expenses. Tenants have no monetary

IF, BY THIS formula, the profit ex-
ceeds 14 per cent of the landlord's equity
(that portion of the house that the land-
lord actually owns opposed to what tie
bank owns), then the rent is reduced to
a level which will yield to the landlord a
14 per cent profit.
It seems, by this formula, that in order to
make a profit the landlord would have to
put a substantial amount into maintain-
ance and capital improvements, the only
items which have more than 100 per cent
returned to the landlord through the rent.
Of course, the landlord still receives long-
term gains of appreciating property value,
numerous tax benefits for owning .'eal es-
tate, as well as an increased equity through
regular mortgage payments.
Landlords, then, are assured of a rea-
sonable profit by the formula, though land-
lords that are now making unreasonable
profits according to the formula, would be
forced to lower rents. The formula also
encourages landlords to make expenditures
for maintainance and capital improve-

input into its revenues. This could con-
ceivably cripple the Board's functions se-
verely if the landlords delayed or simply
refused payment of required fees, in direct
violation of the amendment. However, for
any unit not registered, the rent is $0, noth-
Since registration fees are straight ra-
ther than proportional charges, and not
deductable in part or whole as operating
expenses, they will pose an unequal burden
on the lower cost units (a $50 room versus a
$250 apartment).
Tenants will see an immediate reduction
of rents to the 1972/1973 levels until there
is a further adjustment by the Board pro-
viding the landlord with only a reasonable
profit. If the tenant thinks this rent unrea-
sonable, a request for rent adjustment to
be based on the landlord's actual expenses
can be made to the Board.
THE TENANT as well as the general pub-
lic will have access to a basic summary of
the landlord's expense figures.
Homeowners may think that assessed val-

ue on rental property will decrease with
reduction in rents, thereby causing home-
owners' burden of property taxes to be
proportionately greater in order to main-
tain the present level of city revenues, How-
ever, since the landlord's permissable 14
per cent profit is based on the assessed
value, the landlord will desire higher as-
sessment to increase the 'allowable dollar
amount of profits. The landlord will will-
ingly pay the increased taxes (taxes being
based on assessment value) because pro-
perty taxes are fully recoverable under the
r- fa r-mla, as well as through income
tax deductions. The private homeowner's
proportion of taxes will therefore pro-
bably not become greater, but could rea-
sonably be expected to lower.
Time could conceivably become a limit-
ing factor to the Board's effectiveness,'
since the requirements of the Amendment
could easily cause it to be deluged in the
first month of it's existence with more
paperwork and organizational structuring
than its infant staff could efficiently deal
IF PASSED, the rent control proposal
could probably be effective as a stop-gap
measure to lower rents and somewhat
change the manipulativeness of the hous-
ing market. But the basic problems of a
non-competitive market and housing short-
ages (due to student tenants overflowing
University housing into community housing)
would still exist. The rent control mea-
sure could be a timely, convenient tool to
deal with these problems if it were ac-
companied by efforts to increase the num-
ber of rental units available. So far, such
efforts have been either non-existent or very
Mark Mitchell and. Glenda Pittman are
PIRGIM researchers.

lettersletters lettersletters lettersleti

FINALLY, THE cost of living in Ann Ar-
bor, traditionally one of the nation's
highest, has skyrocketed since the 1970
census, from which both the HRP's and
the Commission's rankings were taken.
Rental rates have reflected this increase.
Neither HRP's SMSA ranking system
nor the Blue Ribbon Commission's city
vs. city scale could accurately reflect all
the complexities of the Ann Arbor rent
situation. However, if we are not to ig-
nore the rent dilemma as it exists in them
entirety of metropolitan Ann Arbor, the
HRP's "second highest" label seems more
applicable, lest we try to compare Ann
Arbor with the Beverly Hills of the na-


To The Daily:


America: Land of Ajax


THE OUTSIDE looks like a surgically
amputated ranch house with choked
malnourished bushes overgrowing the front
The interior decor is Early Ghetto. A
fractured couch rests precariously on four
rocky cinder blocks, and an upholstered
chair leaks stuffing onto the thin, stained
Milk curdles in tumblers that are care-
fully tilted between the cushions on the
couch. In the kitchen, stacks of fortnight-
old dishes crust together and healthy colon-
ies of mold grow on the backboard of the
In the bathroom, a stiffened towel ies
along the floorboard. Toothpaste and shav-
ing cream,are cemented in blue and white
growths on the sink and fleck the mirror.

S!". "
.' i
. rt

Thoughout the house, scraps of crumpled
paper and bits of trash litter the floor.
What makes this house a high rent slum
is not so much the evil intentions of a
mustachioed and slimy landlord (although
an unexpected rent increase was forced on
the unsuspecting tenants) as the living
habits of the inhabitants.
FROM ALL outward appearances, t h e
four tenants are average collegians. They
wear the trademark jeans, flannel shirts
and work boots.
Cooking in aboriginal jungle conditions
doesn't seem to have given any of them
terminal trench mouth. Eating amongst
trash hasn't turned their brains into Ger-
ber baby food and showering in garbage
hasn't gotten any of them a condemned no-
tice fr~m the Board of Health or lost them
more friends than their personalities would
.nave lost them anyway
There are those in this world who fold
their underwear and those who throw it
into a draver. There are those who make
their beds every morning and smooth a
bedspread on, and those who leave the bed

flaking underwear for three months before
picking it up. There are those who plug
in the Electrolux every Saturday and those
wha only clean in May so they can get
their damage deposit back.
IT ISN'T EASY to judge which is the
better life - a Suzy-clean-spic-and-span-de-
odorized-sparkle life in a world that looks
and smells like a prepared Petrie dish, or
the undusted, scummy-foul hobo life digni-
fied by a flushing toilet and running water.
The former life has been given much more
favorable publicity. You never see Chief
Ironside run his wheels over yesterday's
suit and tie, or Mary Tyler Moore in a
messy apartment. The only mess televised
is Oscar's room on The Odd Couple. The
only person who ever does dishes in T.V.
Land is the lady on the Dove commercial
and she doesn't do them to get Freddy's
peanut butter off the plates, but because
it makes her hands so soft.
Mr. Clean advertising has done many of
us irreparable harm. Many of us who lived
in a "pick that up" atmosphere as child-
ren cannot bear a room- that doesn't look
like a picture from House Beautiful.
Sigmund Freud never analyzed the com-
pulsion that causes misery and grief for
thousands, the P.F.E., E.I.P. Syndrome
(Place for Everything,, Everything in
Place). It is what causes many to pick
up and shelve things they're going to use
in ten minutes just because it's neater.
It causes masses to Aerowax their floors
into icy deathtraps and Lemon Pledge lay-
ers off their walnut coffeetables.
YET THOSE who live in houses littered
with collected debris don't lose a minute's
sleep with guilt over the week's build-
up of dust on the dresser.
Perhaps if the nation let the dirt collect
under their sofas, the dishes soak in the
codwra n extra d,. v m e airn.in- han

A GREAT DEAL of misinforma-
tion and confusion has been creat-a
ed by the Daily's report of the ac-
tion taken by the Democratic Par-
ty on the proposed rent control
charter amendment. Democrats
present at their meeting of Feb-
ruary 28 voted to re-affirm t h e
position stated in their party plat-
form - that each candidate should
publicly and clearly state her or
his position on the amendment pro-
I have publicly and clearly stat-
ed my position in leaflets which
are being delivered door-to-door, in
discussions with individual voters
and in debates before l a r g e
groups. I would like to take this
opportunity to state my positon
to the Daily.
It is clear that there is a short-
age of low and moderate cost hous-
ing in Ann Arbor. The victims of
this shortage are the large and
captive student and central city
populations. They are subje.;ted to
rent gouging and forced to accept
low quality housing by unscrup
ulous rental corporations. As a
short-term and stop-gap measure
to protect tenants from these shod-
dy practices, I support the r e n t
control amendment and will vote
for it on April 1st.
HOWEVER, we should all real-
ize that the rent control amend-
ment by itself will not solve all of
Ann Arbor's housing problems.
This fact is highlighted by the re-
cently released report of the city's
Rent Control Commission, which
concluded that the enactment of a
city-wide rent control program
would not alone solve the under-
lying problems of Ann Arbor's len-
tal housing crunch. In fact, this
proposal discourages the building
of new low and moderate cost
housing, thereby leaving poor and
non-mobile tenants in a worse posi-
tion than they were originally. Be-
cause of this and other potential
dangers I agree with the editors of
the Ann Arbor Sun that the city
charter is not the best place to put
the rent control law. The process
of correcting or altering a provi-
sion encased in the city ,hatter is
long, laborious and difficult to in-
itiate. I would prefer (and if the
charter amendment should fail, I
would sponsor) a rent control ord-
- inance which could be passed and
corrected by a progressive major-
ity on city council.
BUT EVEN with a rent control
ordinance, the final solution to the
the enactment of other, long range
rental problem really depends on
programs. To truly alleviate the
city'shousing situation, I wi also
support and work for the fo'lowing
1) Urge the city to take advant-
age of federal and state grants for
the construction of quality low-cost
housing units in the city.
2) Enactment of an innovative
land use development plan and
zoning code for the central city.
3) Expansion of the city's mass
transit system to enable people who
must work or study in the central
area, but are unable or unwilling

is presently being allowed by City
6) Encourage the passage of
state enabling legislation allowing
collective bargaining by tenants.
OVER THE past five yeis,. from
the passage of the Tenants Rights
Legislation to impdementation of
the Concentrated Code Enforce-
ment program, the Democratic
Party has done more to protect
the rights and interests of tenants
in Ann Arbor than any of the city's
other political parties. As a me-
ber of city council, I will contin-
ue this tradition by proposing legis-
lation which will give effective
protection to the tenant while deal-
ing with the realities of the rental
situation in Ann Arbor.
-Colleen S. McGee
Democratic Council
First Ward
March 12, 1974
To The Daily:
UNTIL ABOUT two days ago, I
was undecided whether to vote for
the Democratic or the HRP candi-
date in the 1st Ward. Then Coleen
McGee came to my door to talk
about the election. I was very
disappointed by her tactics.
She told me that I shouldnt vote
for HRP in the 1st Ward became
it would split the vote. But that
doesn't seem to make sense to me
in this ward where Republicans
don't seem to be in the rnning. It
made me think that the numler one
objective of the Democrats as
not to help their constituenTs, but
to eliminate the HRP once and
for all. I just can't agree with that
goal or those tactics.
Having followed Council and city
politics for the past few years, I've
become aware that when the Dem-
ocrats refused to move on rent
control, HRP got it on the ballot.
But I still wasn't convinced to mte
for HRP. I also knew that H2P
had proposed proportional repre-
sentation to avoid minorrty n
trol of City Council by the Rpub
licans. I thought that the Demo-
crats must have had some good
reason to reject this plan.
BUT AFTER talking to Cleen,
I've come to believe that the rea-
son they opposed it is that they
are not really interested -n unit-
ing the progressive vote, but they
are first and foremost interested in
getting rid of HRP by whatever
means necessary. They m id me
think what proposals might have
come up on City Council and the
city ballot over the past rwn years
if HRP wasn't around. I doubt that
the Democrats would have dne
much of importance without llRP's
If Coleen McGee wanrs to win
votes, I would suggest that as a
first step she and the emorats
stop using these dishbnest scare
-Jim Oakley
March 17
To The Daily:
I HAVE SERVED on the Hu-
man Rights Commission with Col-
leen McGee since last April, and

Commission and that I do not sup-
port Ms. McGee's candidacy.
McGee's position on rent control
is quite clear to me: She has stat-
ed to me and the media repeated--
ly that, although she has strong re-
servations about the HRP rent con-
trol charter amendment, she will
vote for it. I have never heard her-
tell anyone otherwise.
Her problem seems to be that
she has been too honest. She has
expressed serious reservations
about the charter amendmert. It
would have been a lot better polit-
ically for her to have hidden her
reservations and to have come out
four-square for it.
NOW SHE finds herself atacKd
for allegedlystating to Glen Har-
ris of the Ann Arbor News that she
is opposed to the amendmem.,
While I have known Mr. Harris for
a couple of years, and be is a
good journalist, nonetheless he
could have overlooked McGee's
statement of support for the amend-
ment. Even the best newspaper-
people occasionally slip up.
I would much rather believe this
than that McGee is lying. I frark-
ly doubt that she is capable of it
Perhaps the lesson in all this is
that candidates should only speak
in simplicities.
-David Cahill
Law '74
March 21
To The Daily:
THE RECENT report by the
Daily on the GEO Union electon
contained some inaccuracies. On
April 1, 2, and 3, all Graduate
Student Teaching Assistants, Re-
search Assistants and Staff Assist-
ants'will have the chance to vote
on whether they want GEO to be-
come a legal bargaining agen for
the purposes of collective bargain-
ing with the University. If a ma-
jority of those voting in that elec-
tion vote "yes" GEO will then have
status as a Union in the state of
Michigan. The election was caled
because over the required num-
ber 30 per cent of the bargaining
unit (TA's, RA's, SA's) signed
cards requesting that GEO become
a legal bargaining agent.
In the election itself there is no
minimum number of voters re-
quired for the election to be valid.
GEO is hoping for a huge turn-
out, however, since the more unit-
ed graduate employees are, the
better chance we have of winning
a fair contract from the University
once we are certified. The elec-
tion is being held under the aus-
pices of the Michigan Employment
Relations Commission (MERC)
who will supervise the voting and
certify the results. The polling
place in the Rackham Lobby will
be open from 9:00 a.m. until 9:00
p.m. for each of the three days
of voting.
-Executive Committee
Graduate Employees
March 19, 1974
To The Daily:

side statement is simply not true)
I have always been appalled at
the rents and other landlord abuses
in Ann Arbor, and we've got to try
to do something about them.
However, it would be irresponsi-
ble and intellectually dishonest ,f
I ignored the very real flaws in. the
ballot proposal. If HRP wishes to
contend that my reservations are
the products of political exped-
iency, they fail to realize that such
expediency would have dictated an
opposite tactic.
It would have been paltically
much, much safer for me to have
signed and supported the ballot
proposals with no criticism or qual-
ifications as to their ieal and prac-
tical effects. I could not in gnod
conscience do that.
FOR THE RECORD, then, I 'd
like to run down exacty what
problems I see in tne rent con-
trol proposal. If it's :n the charter,
it can't be modified in any way
without the whole pe-itio - and
- voter-approval pro edure ne-
cessary to put it in tne Charter in
the first place; there will b no
flexibility to deal with practical
difficulties that may well arise
In other words, if it tioesn't
work right, we're stucx. Second.
the limitation of interet that can
be passed on to 8 per cent is sim-
plynot a reflection of "reason-
able" costs when no one can ge:
an 8 per' cent mortgage Most i-
portantly, however, I fear that the
proposal lends itself to abuses
which will be practially impos-
sible to control. h
For example, the provi iwi al-
lowing landlords to pass on ISO per
cent of reasonable maintenance
costs is a good idea, but will >i-
most certainly result in inefficient
maintenance, "padding" -- if not
fabrication - of maintenance bil,
etc. - with the tenants paying, of
course. The drafters were clearly
aware of this possibility, as they
sprovided sensible guidelines by
which the Rent Control Board is .o
determine the "reasyiableness" of
maintenance expendi ores.
SO FAR, so good. The real nrob-
lem arises when it comes time to
implement t h a t provision. There
are nine people on the Rent Con-
trol Board and close to twenty
thousand apartments in this ity.
To police effectively the reason-
ableness of landlord's claimed e-
penditures, members of the Board
will not only have to consider the
factors mentioned in the guidelines,
but they'll probably have to go
out and look at every apartment.
(Nine Board members, 20,000
I don't think it's out of line for
me to suggest that t will be close
to physically impossih'e for the
Board to perform its duties in n:uch
better than a perfunctory nannr.
Simply put, I'm afraid tha lad-
lords will take advanage of the
loopholes in the proposal and that
the Board will be too bogged down
to be able to do all it should about
I may be wrong in my fears. I
hope so. I would be mon- than
happy to see rent cone-ol enacted
an tn d a tsit.work n ,t dap'th-*

nowledge where the probem' exist.
BUT I URGE people to vote for
it notwithstanding those problems.
Remember that if it's defeated,
the cause of any kind of rent
control in Ann Arbor will be se-
verely set back. Landlords and Re-
publicans would interpret a v o t e
against the HRP proposal as a vote
against the principle of rent con-
trol; then, if anyone tried to intro-
duce any other kind of rent con-
trol measure, Republicans would
counter (in righteous tones) t h a t
The People didn't want it. We can
not let this happen. We can't give
landlords a green light - in the
guise of the Popular Will - to con-
tinue their intolerable practices.
As far as the Democratic Party
as a whole is concerned, I would
have liked to see it express sup-
port for the HRP proposal. How-
ever, Democrats were divided on
the issue and most felt it would be
unfair for either side to attempt
to speak for, or impose its will on,
the other. Unlike HRP, the Demo-
cratic Party is broa-based, not
monolithic. It does not prport to
dictate to its members what they
may say, vote, or think.
-Mary Richman
March 23
To The Daily:
ON APRIL 27 there will be de-
monstrations in Washington, Chi-
cago, and San Francisco to de-
mand the ousting of Richard Nix-
on. A week later, on May 4, Gerald
Ford is coming to Ann Arbor to
address Commencement. On March
27 at 7:30 p.m. in Greene Lounge,
East Quad, there will be a mass
meeting of the Dump Nixon Coali-
tion to organize around both these
Richard Nixon's crimes are ob-
vious, and we cannot depend cn
. the interminable maneuvers of the
White House and Congressional
lawyers to remove him. Only the
active participation of the people
can insure his speedy departure.
And we must further make known
to Gerald Ford and his ilk our
refusal to accept the same policies
out of different mouths, policies
responsible for the suffering of mil-
lions of people at home and abroad.
Although the problems we face
will not end with a change of per-
sonnel in the White House, for the
people not to respond to the begin-
nings of facism in government
would be a serious mistake.
WE URGE everyone who wold
like to see Nixon out to come on
Wednesday night, so that we an
begin the business of getting our-
selves together for Washington and
May 4th. Much work needs to be,
done; a little effort on everyone's
part will insure successful demon-
strations, which are certain to
counteract the barrage of pro-
Nixon propaganda -rrm the Mhite
-The Attica Brigade
March 26
I tm~m., *t This. nfail., . .


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