In September 2021, Ann Arbor City Council passed the Early Leasing Ordinance, requiring landlords to notify current tenants of the terms and conditions of a new lease and prohibits landlords from showing a property to a prospective tenant 150 days before the end of the current lease. This ordinance aimed to alleviate the concerns of students attempting to find off-campus housing. Following its passage, students and Ann Arbor community members continued to report landlords finding loopholes in the ordinance, including holding units for future tenants before the 150-day period begins.
To mitigate this, the Ann Arbor City Council passed the Right to Renew Ordinance in October 2022, which requires landlords to offer current tenants a chance to renew their lease approximately six months before their lease ends. This policy is meant to give current tenants leverage over prospective tenants in securing an apartment or house for the next year.
When asked about how the Right to Renew Ordinance has affected business, Chance Woerner, the manager of Vic Village in Ann Arbor, told The Michigan Daily he believes the ordinance negatively impacts students who know where they want to live early on.
“While certain student groups such as grad students and international students are typically looking later in the year for housing, in my experience, the main student base knows where they want to live and want to lock it in early, which the ordinance prevents,” Woerner said.
Woerner also discussed potential consequences apartment complexes may implement as an attempt to compensate for the loss they incur due to Right to Renew’s limitations on early leasing.
“The ordinance dictates when leasing can start based on a building’s move-out date, which I think will lead to buildings (changing their) move-out dates to earlier (in the semester),” Woerner said.
With only 28% of U-M students living on-campus, students frequently face challenges finding affordable off-campus housing in the Ann Arbor area. In an interview with The Daily, LSA freshman Ari Tsesis said he recognizes both the positive and negative impacts the Right to Renew policy can have on current and prospective tenants.
“(The policy) can put potential renters in a strange predicament because they are now applying for the opportunity to rent a place, whereas before, they would be guaranteed the place,” Tsesis said. “But it’s also positive because there’s not as much of a hustle in October or September to rent for 11 months in advance, which is pretty absurd, especially for freshmen like myself.”
Business sophomore Salma Jarouche also spoke with The Daily on the possible relief Right to Renew can provide for students.
“There’s so much to stress about at this school already,” Jarouche said. “I know so many people that are getting kicked out of the place that they live in just because other people came first. I think it would be great for people to have peace of mind.”
Even with the Right to Renew and Early Leasing ordinances in effect, landlords may circumvent the ordinances’ terms by implementing “pre-lease agreements,” which require future tenants to put down a deposit for an apartment unit they might live in at a future date. While the prospective tenant may benefit from reserving a place in advance, depending on the terms of the agreement, a landlord does not necessarily have to give that apartment unit to the tenant or refund the pre-lease deposit. Generally, the landlord financially benefits from pre-lease agreements by retaining their bargaining power and ensuring they do not end up with unrented apartments the following year.
Though LSA senior Ellie Roubal told The Daily she sees the benefit of the Right to Renew policy for prospective tenants, she expressed disagreement with landlord’s use of pre-lease agreements.
“(The Right to Renew Ordinance) allows people to actually explore their options and not get trapped into something in October,” Roubal said. “I’ve definitely benefited from being able to wait until March. (The use of pre-lease agreements) is a workaround and certainly a loophole for landlords.”
In an interview with The Daily, LSA sophomore Raaj Govil recounted his experience when he was forced to scramble to find a new place to live after his first lease fell through unexpectedly.
“I signed a lease to (an apartment in Ann Arbor),” Govil said. “I had to pay a $300 application fee. I had completely signed the lease, and I was told there was nothing more needed from my end.”
Not only was Govil unaware that the lease he signed did not guarantee the unit, he also did not get refunded his initial application fee.
“They told my roommates and I that they had overbooked for next year and couldn’t take us,” Govil said. “They never told me that my lease would not be confirmed until they heard back from their current tenants, and only being a freshman in college, I didn’t know that I didn’t have a confirmed lease until they signed. Not only that, but I lost my application fee.”