For university students arriving in Ann Arbor, finding a place to live is like taking exams before classes have even begun. Freshmen are guaranteed housing on campus for one year before space limitations force most onto Ann Arbor’s off-campus rental market, which typically is 99 percent occupied. With leases signed ten months in advance, freshmen must instantly find roommates and compete with upperclassmen and thousands of nonstudents to find a place to live.
“By Christmas of last year we were 95 percent rented,” says Chris Heaton, treasurer and co-owner of Campus Management. The company handles 325 leases in eighty-five buildings for twenty different property owners. This year, he says, it has only “eight apartments and one house that are unrented.”
Renting a room in a house is the cheapest way to live off campus, but shared kitchens, bathrooms, and living areas are not an attractive option in the age of Covid. Searches on local real estate sites find dozens of houses for rent in prime locations–and hundreds of rooms in large apartments.
Most high-rises near campus have apartments with as many as half a dozen bedrooms that are leased individually. Currently, nearly all have space available in these layouts. Studios and one-bedrooms, however, are scarce.
Alice Ehn, executive officer of the Washtenaw Area Apartment Association, says her members have reported “very few” students trying to get out of their leases. “The difference this year is that [landlords] are truly trying to make every kind of accommodation that people need,” she says. “Being part of an organization like ours helps because they can make the connections. They can say ‘Hey, who has a one-bedroom or studio for a student who wants to live alone?’ This is the number one thing kids want,” Ehn says.
“I experienced a lot of people trying to get out of their leases,” says one student rental property manager who asked not to be identified. “But the legislation is not pro-renter. There is no clause for pandemics.” Instead, he says, most students (or their parents) just continue to pay: “It might be one person out of four or five who doesn’t show up, but they’ll pay because they don’t want their roommates to be stuck paying their rent.”
Campus Management has offered “little forgiveness on rent,” Heaton says. The City of Ann Arbor, banks, and utility providers have not backed off their collections, leaving property owners with few options for clemency. That said, there have been occasions when Campus Management has made concessions. “We don’t tear up a lease but will help by amending or delaying rent,” Heaton says. “We had to re-rent apartments. A couple of places needed roommate changes, and we made those. We made a few rent concessions based on demonstrated hardships.”
Jon Keller, president of J. Keller Properties, says his student apartments rent ten months in advance–and even in the pandemic, almost all his tenants are honoring their leases. “Out of the 1,000 [student] renters we have only a handful [who] asked for anything, and in all cases we were able to make adjustments,” Keller says, “either let them out of their lease with the stipulation that they were still on the hook until we were able to find someone else, or payment plans, applying security deposit to rent. More people were concerned about trying to make rent rather than get out of leasing.”
But students account for only about half of Keller’s tenants. “The nonstudent stuff is what we struggle with,” he says. “We have definitely seen a decrease in our rent rates.” By offering discounts of 5 or even 10 percent, Keller has kept his nonstudent apartments fully rented. “The owners who are stubborn and not willing to come down on their asking price have trouble filling units,” he says.
The next test of Ann Arbor’s student housing market begins this month, when students renew their leases. Or don’t.
Though Ann Arbor law states that students can’t sign a new lease until seventy days into their current one, “landlords drum up fake pressure to get kids to re-sign and start that in October,” says the anonymous rental manager. “If everyone is signing leases, do you want to be stuck without housing for next year? What happens if there is a vaccine that works well and Covid is no longer an issue?”
Becca Harley, a senior in LS&A’s environmental program, says she and her roommates feel the pressure. Their landlord, Michigan Rental, “emailed us September 28th and said if you have interest in resigning, contact us immediately,” she says. Their six-bedroom unit is relatively close to campus, and, at $740 per bedroom, her roommates “feel like it’s not worth it to find something new. What we have is not the best we can do but it’s going to be the easier option than finding a new spot and all-new roommates. The Covid market makes us feel more unsure of our housing options.”
Landlords are less sure, too. Though students can sign leases for the 2021-2022 school year starting in November, “we expect that process to be more prolonged this year,” says Campus Management’s Heaton.
He points out that the student rental market is better off than commercial real estate. “We manage 322 and 324 S. State St., where Espresso Royal was,” he says. The cafe had been there for more than thirty years, but when the pandemic hit, “they had no staying power.”
At press time, those prime spots across from the Diag remained vacant.