Pace Six
THE MICHIGAN DAILY
-Saturdoy, June 4, 1977
'Housing crisis' blues:
increase supp hold pices
By ELAINE FLETCHER
Second of Two Parts
WHIILE ANN ARBOR'S housing situation
may seem hoeless to the tens of thous-
ands of city tenants it afflicts, the situation
is by no means insurmountable.
In fact. it's quite simple to map out what
needs to be done in order to alleviate the
central city's hosing crisis. Two things
must happen more or less simultaneously.
First. the sonply of housing must be in-
creased so that tenants will no longer be
forced to live in poorly maintained housing
owned and managed by disreputable land-
lords. Second, the cost of housing must be
kept down to reasonable levels-and the
only feasible way to do this is through regu-
lation of rental prices. Rental price regula-
tion, otherwise known as rent control, is
needed to stop assessmeint inflation and in-
sure that the financial benefits of any newly
constructed high rise housing are shared
by consumers.
Of course this is all easier said than
done. The city's housing crisis has been
tenaios's. largely because of the resistance
posed by local landlords and bankers to pro-
Saturday
Magazine
gressive measures which could change the
housing situation. Community financial lead-
er fTail to work toward alleviating the hous-
ing problem, impede the efforts of those
who do work toward alleviating the prob-
lem, or refuse too acknowledge that such a
thing as the "housing crisis" exists.
Consider the landlord who, in an inter-
view, professed a deep concern over the
issue of new central city housing construc-
tion, yet later in the interview insisted, "I
think the shortage is a myth," said the
landlord who wished to remain anonymous.
"The ISR survey-I can pick those statistics
apart in a few minutes. To say that prices
in the Ann Arbor market are higher is ma-
larky. These characters (pro-tenant acti-
vists) seem to think that someone else owes
them an apartment at whatever price they
want to pay"
Landlords often complain that their ten-
ants understand few of the trials and tor-
ments involved in rental housing owner-
ship, construction or management. How-
ever, landlords themselves have offered
little response to tenant concerns regarding
the housing crunch. When faced with ten-
ant-backed housing proposals the response
of the landlord community has generally
been far from constructive.
William Tyler vice-president of McKinley
Management companies, recently admitted
that he had not finished reading the study
which he as part of the Mayor's Housing
and Fair Rental Practices Committee, com-
sioned and approved. Tyler also did not
know what interim recommendations his
committee had sent to the Mayor and Coun-
cil for approval. He is perhaps typical
among ctiy realtors in that he is "absolute-
ly against rent control" and against the
city or University backing mortgages for
non-profit residential development. When
the Housing Committee's interim recom-
mendations were r-ead to him, he said that
he was against most of them.
Although he acknowledges the city has
problems with high prices and housing Although there is some vacant land in
shortages, Tyler offers no ideas as to how the central city more sites must be made
to deal with the problem, explaining, "I available if any construction other than
think it's always going to be tight here and high rise is to be done. A large proportion
I don't know what solution there is to hous- of the city's older homes are still desirable
ing at a lower cost-though my opinion on tenant dwellings but units which are in an
rent control is no different than before (the extreme state of disrepair or which have
study)." Still when asked if he thought the been condemned should be torn down and
University should increase its housing sup- the land made available for new construc-
ply Tyler said, "Let the private market do tion.
that." When it was pointed out again that
the private market had failed to provide an To eliminate sub-standard housing, the
adequate supply of low cost city housing, cty de no codetid andingr.
Tyler responded, "Perhaps people will "the demolition of condemned buildings,
have to shift their living habits-perhaps. "The city could really solve some of that
will have to live farther away from the evil landlords stuff by taking some of the
they .r really rotten ones and going after them,
Uoveators wharhauling them into court for code violations,"
To realtors who are making comfortable remarked one landlord, who refused to be
profits in the existing housing market, it is- identified. "My feeling is that I'm just dis-
easy to be negative about proposals for gusted with city hall. They could make ev-
change. Change, after all, represents a ery landlord in this town shake. They could
threat to their investments. make me shake if they would enforce codes,
Their views however, are not acceptable start forcing people to rip condemned build-
to the overwhelming majority of people who ings down and offer a real incentive (tax
have a vested personal or economic stake incentive) to build. Hell we're all human.
in the growth and prosperity of the central Eighty per cent of what I do in a day is
city. Businesspersons, bankers, investors. motivated by greed-or call it the competi-
tive spirit. You've got to offer them some
kind of incentive to people, and then all of
a sudden you'll find the market flooded."
The city can further stimulate the devel-
opment of new housing by trying to make
the profits on existing housing less attract-
ive relative to those to be made in the new
housing market. It can do this by holding
down the prices of existing rental units
while perhaps exempting newly constructed
housing from regulation. Such regulation
would insure that consumers as well as
developers would profit from an increased
supply of rental housing.
Jonathan Rose of the MSA Housing Law
Reform Project believes that city regulation
landlords, developers, city hall, tenants, of housing prices need not imply bureau-
and the University all have a responsibility cracies. Rather he suggests that some form
to the community as a whole to help in al- of localized "rental costs index" be estab-
leviating the housing shortage and high lished which would- measure the per unit
prices. A variety of creative solutions can rise in landlord costs like utilities, taxes,
be explored or a few unwieldly ones may be ets. and then would automatically allow for
imposed. What course the city chooses de- a rent increase comparable to that amount.
pends largely on how well the broad spec- Rental appeals would then be necessary
trum of interests can work together to- only if exceptional circumstances make the
wards some common goals-or if they can allowable rent unfair to landlord or tenant.
work together at all. Although many landlords balk noisily at
any sort of rent regulation, if what they
THE CITY GOVERNMENT could be the say is really true-if their rent increases
key figure in the housing crisis. It must really only reflect rising operating costs-
learn how to- work together with the busi- they have nothing to fear from rent regula-
ness and financial comm'nity to stimulate tion. Not only would it hold down prices to
new ho'esin'g cnstrmction without sacrific- tenants,. but it would further help stem the
ine the broader interests of its electorate. rise in property tax assessments which
One crcial way in which the city and busi- erode into a landlord's profits.
ness esn enn'wrsti is in the develonment of "I think most people would favor rent
tax relief which will stimulate new housing control if they could get direct cost pass-
constr'ection. through," commented one landlord, who
The supply of housing must be increased
in poorly maintained housing,
agreed to an interview on the condition
that he not be named. "A lot of people are
against rent control, just because it would
regulate them, but I've never seen an in.
dostry which was regulated which didn't
end up liking it. Look at the airline indus
try. Now they wouldn't want to be deregu.
lated. Besides I think they're going to have
them (restrictions) sooner or later so they
might as well work to get the right ones."
This landlord added that rent control
would "run out of town some of the land
lords who've really got it coming and who
are giving some of the better landlords a
bad name."
WHILE A CERTAIN amount of high rise
development might be desirable for
downtown, high rises alone will not serve
a broad variety of the community's housing
tastse and needs. The city needs to encour-
age more low and midrise construction at
the same time, by relaxing zoning density
restrictions. Parking provisions should be
loosened in the city where a pedestrian
lifestyle is desirable to many.
According to Rose, relaxation of require-
ments for large lot and single family zon-
ing would allow greater housing density it
areas near the central city. Also to make
possible greater density, Rose questions
the proposal that the city could allow the
conversion of illegal rooms to make then
conform to legal standards. "This might
just overcrowd tenants to the benefit o'
landlords but, if coupled with rett control
would at least let the tenants have the eca
nomic savings of their crowding."
Tax incentives which encourage develop
ers to put up downtown hoesing should not
be unfairly limited to profit motivated ii
dividuals or corporations. Explains Rose
"Another way of increasing the supply is to
give a greater number of people access to
building capital. If mortgages for new cOt
struction were insured by the city, prive
insurance companies or other instituti
or non-profit cooperatives, could borr1
the money to build their own buildings Wit
no downpayment." He adds, "Local final
cial institutions might oppose this plan a
it would in fact increase supply, thereb
making their existing investments less i
demand and less financially secure."
Such a proposal was in fact an interim
recommendation of the Mayor's Fair Rental
Housing Committee. It was opposed by only
two of the voting committee menber
Jerry Bell (the Republican Council repre
sentative) and Carolyn Dana Lewis, Pre;'
dentof the Ann Arbor Board of Realtors.
While it is important that city policie
encourage new construction, it is equal;'
important that any new rent control rettai
tions contain financial incertives to pr
mote the maintenance and rehabilitatioa
the vast number of existing housing 5t
which are in seasonably good repair
Elaine Fletcher is Sunday magszine
editor during the school yar.
Doiy
Strict code enforcement and enforced demolition of
tial to improvement of housing conditions.