Prior to September 2021, Ann Arbor legislation allowed landlords to start showing properties and signing new leases for the next school year 70 days into the existing lease. This resulted in students spending the early months of each semester searching for housing for the next year. The City of Ann Arbor attempted to address this issue by passing the Early Leasing Ordinance in September 2021, which prevents landlords from showing leased properties to prospective tenants or entering into a new tenant agreement 150 days before the end of the current lease.
Many students report landlords often evade the terms of the ordinance by finding various loopholes. These include requiring prospective tenants to pay fees in order to enter a waitlist for a unit or hold a unit before reaching the 150 day mark.
Source 1, an Art & Design freshman, spoke on their experience renting from Michigan Rental. The student asked to remain anonymous and will be referred to in this article as Jane Doe.
Doe said that when they signed their lease with Michigan Rental for the 2022-2023 school year, the landlord made them put money down to reserve the unit in Feb. 2022. The Daily received a copy of this email and verified its contents.
“We contacted the property management company and they (said) because of the land ordinance we can’t do a lease yet but if you pay $2,000 for a holding fee, then we can hold the lease for you,” Doe said.
Doe said the ordinance is ineffective because landlords have been inconsistent in following its terms. Doe said they might not have had a place to live for the winter semester if they had not paid a holding fee early.
“I feel like if all of them (landlords) are following (the ordinance), it would be effective or if none of them were following it, it would be however it was before,” Doe said. “I feel like this kind of adds a unique issue where you feel like if you don’t literally break the land ordinance, then you’re not going to have a place to live.”
Source 2, an anonymous law student, said they experienced similar issues when leasing from Campus Management. The student asked to remain anonymous and will be referred to in this article as Ashley Smith.
Smith said Campus Management began the renewal process for leases in the early fall in spite of the ordinance by denoting it a reservation process.
“In the previous year, (Campus Management) had sent out their first renewal notice in early October, late September, so after I’d only been living there for 30 days,” Smith said. “This year, they did a similar thing, but what they called it was a reservation, like you need to reserve your spot by this date. If not, there’s no guarantee that there will be a lease for you to renew.”
Smith said she alerted her landlord and the Graduate Employees’ Organization (GEO) housing caucus of the situation.. Smith said both her landlord and GEO stated thatCampus Management was not directly in violation of the ordinance because it was a “reservation.”
“(The landlord) said that they weren’t in violation (of the ordinance), that actually the city attorney found it (the ordinance) illegal and that there’s nothing wrong with asking for reservations, and then the GEO housing caucus chair eventually said the same thing,” Smith said.
Smith said unless further changes to the ordinance are made, she does not think there will be any improvements in the leasing process.
“I think it’s just another loophole with the same result,” Smith said. “Unless they really say no reservations, you really can’t pressure current residents to make a decision about their future place… I think the same thing is going to continue to happen with no real change. Now they’re just calling it reservations instead of renewals.”
Rackham student Lucy Peterson, GEO housing caucus co-chair, spoke on GEO’s pioneering of the Early Leasing Ordinance. Peterson said members of GEO began working on changing leasing terms to help graduate students have more time to make leasing decisions, especially if they were unsure of where they would be researching the next year.
“The problem being that (graduate students) would either be accepted (into the university) and have to come into a rental market that was full or they would have to scramble the next year,” Peterson said. “October would come and their landlord would come knocking and be like, ‘Hey, are you staying’ and they’re like, ‘I don’t know. I don’t know if I am researching here, I don’t know what’s happening.”
Peterson spoke on an advertisement for The Standard, an Ann Arbor leasing company. She said the advertisement cites the ordinance as the reason why prospective tenants’ leases get canceled as a result of current tenants renewing their leases. A copy of the advertisement has been obtained by The Daily.
“This ad is especially egregious because they are admitting they have no intention of following through on a legally binding contract and blaming ‘local ordinances,’” Peterson said.
Peterson said the ordinance does little to hold landlords accountable for violating its terms.
“I think with respect to early leasing, (landlords) definitely spread a lot of lies and they cashed in on those lies, which was unfortunate,” Peterson said. “Why the city isn’t punishing them for that is beyond me, because it’s definitely well within their rights to enforce the law that does exist, which should not make space for landlords to collect thousands of fake security deposits.”
Peterson said the passing of the new leasing ordinance changed how Ann Arbor residents thought about their rights as tenants.
“We were happy because we mobilized a lot of people,” Peterson said. “And I think people learned that they should see themselves as a person with rights, even when it comes to being a tenant … You don’t have a lot of power, but you don’t have none. We do have rights as tenants.”
In an email to The Daily, Chris Heaton, co-owner of Campus Management, wrote that Campus Management abided by the ordinance by allowing current tenants to renew their lease when they were ready. Heaton said the company expanded shopping tools, such as virtual tours, for prospective tenants and did not allow them to sign leases until the allotted time frame.
“We worked with our current residents who wanted to renew and signed renewal leases when they were ready,” Heaton wrote. “For people looking for housing we offered more online shopping tools, options to lease and then executed leases once it became possible to do so.”
Heaton said the leasing process had to be compressed into a shorter time frame because leases could not be signed until 150 days before the end of the lease. Heaton also said the ordinance put landlords of newer high-rise apartment buildings at an unfair advantage.
“Because of their ability to show model units and sign contracts without assigning a specific unit, the newer tall buildings were able to race ahead with rentals while we had to wait,” Heaton said. “Students interested in apartments in those newer tall buildings were able to lease when the rest of students couldn’t … The pent-up demand created by the ordinance, combined with a shortage of student-oriented units, created a rush to secure housing over the course of the last month.”
Heaton said the ordinance could have been more effective if the city had incorporated greater input from students and landlords.
“The new version of the ordinance provides preferential treatment to student residents in possession of a house or apartment along with absolute indifference to the needs of those students searching for a future housing,” Heaton said. “It was also unfair in the sense that it got passed last summer when a pandemic was raging, most students weren’t here…couldn’t participate in the development of the ordinance.”
Not all management companies share Heaton’s reservations towards the ordinance. Jordan Else, manager of leasing and office operations at Wessinger Properties, said her company changed their leasing methods to follow the new ordinance entirely and experienced few negative effects on business while receiving appreciation from tenants.
“We waited until six months to lease end to ask our current tenants about renewal and gave them 30 days to decide,” Else said. “We did not start leasing or scheduling virtual showings at all until 150 days or less. We didn’t keep any waitlist or take any holding deposits. We signed actual leases once we legally could, which gave tenants confidence that they were getting the exact unit for which they signed.”
Else also said she hopes the City will work to strengthen the ordinance so students don’t continue to be financially affected by the loopholes implemented by many leasing companies throughout the city.
“We were saddened to hear student stories of how much money they lost from paying other landlords holding fees on units they later found out weren’t available, or with leases that didn’t work for them,” Else said. “We truly hope City Council and the new Renters Commission strengthen this ordinance by increasing the penalty, creating safer ways for students to report and outlawing the exchange of money at all before an actual lease is able to be signed.”
Councilmember Elizabeth Nelson, D-Ward 4, helped implement the to fix the early leasing issues.
“What I had hoped going in was that there would be enough compliance overall, and enough understanding of the new law across the board that we would have compliance,” Nelson said.
Nelson said a large challenge in making the ordinance effective has been holding landlords accountable for violating the ordinance. Nelson said it has been hard to target what a violation is and how to identify landlords acting in violation of the ordinance.
“There’s a fine that the city can levy (against violators) but we had some questions around discussing this,” Nelson said. “Is (the fine) going to be meaningful? Can they just fine $500? … Now that it has actually been enacted, the question is, how do we prove a violation? And how do we find people in violation?”
The Right to Renew Initiative, first announced April 10, is a campaign that seeks to provide more protection for tenants when renewing their leases and to create a set of guidelines that defines just causes for eviction. Founded by the GEO housing caucus, it has a coalition of support from Nelson and other Ann Arbor housing activists.
“We just started another campaign … which would close these particular loopholes because it would necessitate that landlords offer renewal terms to the current tenants within the timeframe of the early leasing ordinance, so 210 days past,” Peterson said. “And if the landlord violates that if they bring in a new tenant prior to those days without offering renewal terms to the current tenant, then the landlord would have to pay relocation assistance to the tenant based on the size of their apartment.”
Nelson said Right to Renew would protect tenants from losing the opportunity to renew their leases without a just reason and would relieve pressure to renew leases.
“The solution to that is to have an enforceable right to renew,” Nelson said. “(Tenants) need a right to renew so that their apartments can’t be promised out… under the threat of ‘you have to give me a deposit or you have to act now because I’m going to start promising your apartment to somebody else.’”
Peterson said she is hopeful that if the Right to Renew Initiative is passed into law, next year’s leasing cycle will change for the better. According to Nelson’s website, she has not yet heard back from city attorneys regarding the initiative.
“A lot of it hinges on renters being able to advocate for themselves and a really robust renters education in the city,” Peterson said. “So that way any law would be enforced, especially in a situation where there’s one really powerful group and one kind of weaker group because … there’s still somebody who’s standing between you and your housing, and just by sheer brute force and capital, they can get away with a lot. And we definitely saw that with the Early Leasing Ordinance.”
Daily Staff Reporter Emma Moore could be reached at email@example.com.