Saturday, May 28, 1977
TF4E MICHIGAN DAILY
Page Nine
_audaMas 8 17 TEMIHGN ALYPgeN!
Daily Classufieds
(Continued from Page 8)
PERSONAL
BREAKOUT.
Tie most chalenging video sree)
is at the Cross Eyed looe.
E. Liberty. Open every day. cF528
nThVE'S LUNCH-Come for home
.xtInBreakfotall day, great
ntoand egg cotta. 3 cog omelets
,h fresh vegetables and fresh
noon sprouts served all day, Sundays
n-8. 1313 South University. etec
OPtES--As low s'aO. IMPRESS
Sal the Cheapest !). 524 E. William,
6-4821. cFtc
STAHOATE: 7705.28'GLC
tust made it in before the deadline
to 'et this in. If you don't hear
from me by 7705.31 at midnight
oter the plants and nail the let-
c rs oodcr the TV. Hone a nc
r :tunid hon; and thanks so much
too Thursday Friday counting.
luv ya, c.urchin dFS28
VISIT ANN ARBOR'S only gem lab
before youspend your'cMoney need-
essly. Pine nquality dionndsand
loon prices on all engogemnt and
wedding rings. Austin Diamond,
1209 S. University, 663-7151. . eFtc
SUSAN B.
Alas, my identity has been uncov-
ered, Yes, it's me-Attilla the Bun
and Boo-Boo Bear, the Jesus-freak,
and, yes, even Mary Macp, too! How
come Itnever see younaround here
hen I get in? Doesn't everybody
enjoy spending their evenings at the
Daily? Have you seen that new com-
mercial on TV with the DS con-
dOctor advertising RenCen? ("Now
appearing . . ."). Bye for now. P.S.
We've really GOT to stop meeting
loke this. dF601
IHE DISTINCTION of being South
s only drogstore belongs to the
Village Apothecary, 1112 S. Univ.
Aoc. oFte
ANNDE:
Rould 00 yo lave meth wa?
'10he placeorhas 0110h a tranqullit-
--)oslere, I can't stated the smiling
lfas Please Hurry (?) back-but
t te slow scenic route.
PRANCIS dP52t
PREGNANT? Need help?
011 Problem Pregnancy Help. 769-
01 'regnancy tests available. eFtc
READ and USE
DAILY CLASSIFIEDS
PERSONAL
JAZZ
0t the University Club with the
Root's -'in 11d Friends Noel Cun-
ningha, p11i0o; Ted Harley, bass;
Olapo Olso lauter, drums; and fea-
turing Vincent York of the Mercer
E1ington Band on alto sax. Friday
and Saturday evenings 9:30 p.m.-
1:30 .m. in the 0111 rektail lounge
in the Michign Union huilding.
Ask hostess for free trial member-
ship. 763-2236. chFtc
WANTED - Ori-inal, utpublished,
short stories or novels by college
writers. h-J Syndicate, P.O. Box
9055, Daytona Beach, Fla. 32020.
22F602
FRIENDS LAKE COMMUNITY 80-
acre wildlife preserve near Chelsea-
Swimming, sailing, canoeing, pic-
nicking, camping. All-year member-
ship $50 per adult. Children free.
Brochure from Bloos, 2005 Penn-
001011, Ann Arbose40103. 43P61-
AVON'S SUMMER SALE
s next month. For free broehure or
information call Audrey Sein at
662-4401 anytime. e~te
CAROL AND PHYLLIS F.-.
I LOVE YOU BOTH, MADLY.
THEOPHILUS. cFtc
DISSERTATION
SPECIAL
LOWEST PRICE
IN TOWN FOR
COLLATED COPIES
RACKHAM QUALITY
GUARANTEED
COPYQ U ICK
1217 S. University, 769-0560
cFte
XEROX AND OFFSET
fast, low cost duplicating
COPY QUICK
1217 S. University 769-0560
cFtc
PERMANENT WEIGHT LOSS
Tlugh B he ha i rModification
Wolverine Institute, 973-1480.c Ft
HoUSing-
(Continued from Page 8)
the Michigan State Housing De-
velopment Authority (MSHDA),
"are not geared to financing
downtown housing because of the
parking requirements."
WHILE DEVELOPERS and
landlords quite rightly com-
costs involved in constricting
new housing, Paul Teich warns
that, "no one should imply that
landlords still aren't making a
lot of profit off of existing
structures."
Landlords may in fact be mak-
ing too much money on their
"slum dwellings" to justify a
move to the new construction
market.
"The immediate response," con-
tinues Teich, "from anyone
who knows economics is, how
can you make high profits and,
yet no one can afford to build.
This seems to be the key ele-
ment people don't understand.
The answer is laissez - faire
economic theory doesn't work in
this case Costs in construction
run indhpendent of return in
existing housing."
"People are electing to oper-
ate existing properties because
the incentive to tear them down
doesn't exist." comments one
private landlord and develop-
er. Adds William Tyler "If
you have an existing investment
that has a good yield to you, to
toss that away, or tear it down
and build a new one - the re-
turn that you would get from
the new structure would have
to be substantially higher to
justify the investment."
Few landlords, including Ty-
ler will concede that the pro-
fits they reap are unreasonable.
However when they in the next
breath insist - and many con-
tinue to do so - that there is
no housing shortage, that prices
are not unreasonable and the
creation of a new supply is on-
feasible - their lack of inter-
est in changing the status quo
is a powerfil indication that
economically speaking, they
are more than satisfied.
Why do the economics of the
situation dictate that a land-
lord will choose to maintain an
old house when he or she could
potentially charge even higher
prices to more tenants in a new
structure? Because a landlord's
income is not derived from rent
alone.
"LANDLORDS ARE not just
in the business of renting
houses. Rather they are in the
business of buying houses, rent-
ing them and selling them," ex-
plains Jonathan Rose who is
also an attorney 'for the MSA
Housing Law Reform Project.
"Landlords would like consum-
ers to believe that their only
profit is the difference between
revenues and expenditures. But
that's ONLY one of five pro-
fits.that landlords make."
According to Rose the A, B,
C's of housing profits go like
this: :
A) appreciation - increased
value of property due to rising
values of land, housing and in-
flation.
B) - breaks on capital gains
tax - the profit derived from
the sale of a house is taxed at
a lower rate than that of the
normal income tax
C) - cash flow profit - dif-
ference between monthly rent
and expenditures
D) - depreciation allowance -
while the value of a house and
land invariably increases over
the years, tax laws allow a
sizeable credit for the theoret-
ical depreciation of the value
of a structure as it gets older,
which in reality means more
income for the landlord.
E) - equity buildup-although
landlords list mortgage pay.-
ments (paid by the tenant's
rent) on a house as an expense,
those plarments in fact are
retmrned to the landlord in the
form of cash when he or she
tcsiiia the house aisd will be
returned to the landlord in the
form of c,,sh when he or she
sells.
Beca'se och figures play an
iiartnat n0rt in a landlords
profit piritire, income state-
ments. e101 if tenants could get
a lurk:itothem, iould he dis-
torted.
"I have no way of knowing
what the distortion rate is local-
ly," says Teich, but I have
seen examples where the rate
of return may range up to 40
per cent higher than that re-
flected in financial statements."
Since a substantial portion of
a lpndlord's hidden profits are
derived from tax loopholes,
much of the profit he or she
makes will be determined by
the income tax bracket. Accord-
ing to Teich that means that,
"Landlords who have high in-
comes already will make more
money than "poor" landlords,
because the richer ones are in
a higher tax bracket and the
tax savings they will get from
such things as the fictional de-
precia'ion of the building are
higher."
On the other hand, land-
lords who own less property
and fall into lower income tax
brackets frequently feel their
profits more easily threatened
by such things as spiralling
utility rates and increased
property tax assessments.
One such private landlord
says he would favor some kind
of renf control because, "It
would not only limit my profits
but it would guarantee them. In
the last couple of years the
rental increase in the city has
just been enormous. And yet
we have a very big building
that we are selling because our
costs have gone to a maximum
See HOUSING, Page 10
OPEN MEMORIAL WEEKEND
Billiards * Pinball * Bowling
at the UNION
OPEN 1 :00 P.M. SAT., SUN., MON.
Reduced Rates for Billiards and Bowling
TONIGHT!
MAY 26 .MAY 27 MAY 28 MAY 29
8P.M. 8 P.M. 8 P.M. 7 P.M.
$3.50 $4.00 $4.00 $3.50
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