Ann Arbor rent ranks high among Michigan cities, second fastest growing among college towns

Monday, September 9, 2019 - 4:15pm

.

Design by Alec Cohen

Ann Arbor rents are skyrocketing, according to recent reports. The city’s rent is the second fastest growing among college towns. 

Separate reports from rental and real estate websites Zumper and RENTCafé confirmed Ann Arbor’s increasing rental rates. Zumper examined the year-over-year rental growth rates of 50 college towns around the country, comparing the average rate for one bedroom in 2019 to the rate in 2018. With a year-over-year rent increase of 15.9 percent, Ann Arbor came in second following Gainesville, Fla., the home of the University of Florida and a 16.7 percent growth rate.

Ann Arbor’s average one bedroom rate has increased from $850 in 2018 to $985 in 2019. East Lansing also made it into the top ten of the rankings — its rent increased by 14.3 percent. However, rent was lower in East Lansing than in Ann Arbor, increasing from $700 in 2018 to $800 in 2019. 

Social Work student Laura Rall is president of Affordable Michigan, a student organization focusing on improving the quality of life for lower-socioeconomic status students at the University. Rall attended the University as an undergraduate student and has noticed rent and housing costs increasing during her time in Ann Arbor each year. 

“After living here for six years, I’ve definitely noticed rent continuing to increase,” Rall said. “Every year, landlords will send you a notice about renewing your lease, and they often say, ‘If you renew your lease, rent will go up this much.’ I’ve never had a friend whose rent stayed the same after renewing their lease.”

LSA junior Hailey Pantaleo has noticed the differences in rent between Ann Arbor and other college towns in Michigan. Pantaleo’s sister attended Saginaw Valley State University in University Center, and her rent was around half of what Pantaleo pays in Ann Arbor. 

“Her rent there was probably $300 to $400, whereas I found a really, actually, pretty cheap place about three miles off campus — so I do have to commute a bit — and that’s still $800-something dollars. Most places downtown for just a room, it’s like $1,300. My sister’s older and she’s well-established and even her mortgage on her house is less than my rent in Ann Arbor.”

Rall said high rent can push students into uncomfortable and unsafe living situations in an effort to save money. 

“I know of situations where two or three people will split one bedroom,” Rall said.”Which is definitely not legal — there’s a certain amount of square footage the city says each person must have. Even one of my friends was literally living in a closest — he was able to fit just his mattress in there — to save money on rent, and he was still paying around $600 for a tiny closet.”

The increased rates are partly driven by increasing enrollment at the University. Students must choose between living in University dormitory housing or off-campus housing, which is often less expensive. Rall said luxury student housing also contributes to high rent, as other property management companies see students have a higher willingness to pay. 

“Luxury high-rise apartments might charge, let’s say $1,400 for one bedroom,” Rall said. “Then landlords see this and charge $1,000, because they know there will be students who maybe aren’t willing to pay $1,400 but will see $1,000 as a better deal.”

Pantaleo agreed, saying housing options are limited near campus since landlords are free to charge higher rent to wealthier students. 

“A large chunk of the student body comes from a lot of wealth,” she said. “So it’s not really an issue, their parents generally pay their rent or something … the places know that students need a place to live so they can charge as much as they want. And honestly their rates are pretty similar to how much they charge for dormitory housing. So it’s kind of like you’re trapped, you don’t have any other options.”

Jennifer Hall, director of the Ann Arbor Housing Commission, said the University should partner with the city to alleviate housing affordability issues for students. 

“The U-M owns a lot of land that could be developed as housing or mixed-use,” Hall wrote in an email interview. “The housing could be owned and managed by the U-M or the private sector. The housing could be dedicated to students and/or faculty and staff.”

Rall echoed Hall’s sentiments and said additional student housing from the University would help address increasing demand for affordable housing near campus. 

“I live in the Northwood apartments right now and I pay $650,” Rall said. “There’s one other person and we share a two bedroom unit. I think that’s pretty reasonable for Ann Arbor, and having more housing like this would be beneficial. There are so many more applicants to University housing than units available.”

Pantaleo suggested the University add or expand bus routes to make living off campus more accessible. Pantaleo, who lives about three miles off campus near the stadium, has to leave home 45 minutes before her 8:30 a.m. class to be on time. 

“I drive to campus and then park, and then I take the bus to my class,” Pantaleo said. “If the University expanded its bus routes or maybe got more bus routes that went further and more often — because I have to take the city buses and the city buses are more unreliable, more so than Michigan buses - that would help in getting students to maybe live further off campus and be able to afford housing.” 

Hall said the Ann Arbor City Council and the Housing Commission have been assigned to analyze under-utilized city-owned properties to see if they are ideal for affordable housing. Affordable housing is in demand in Ann Arbor. In November 2018 more than 4,000 residents applied for 600 spots on an affordable housing waiting list. 

“That analysis is currently underway and we will be presenting our analysis to City Council in November,” Hall said. “The city, like the U-M, County and other public entities, own land that is underutilized and could be developed as housing, whether that is affordable or market rate housing. Any market rate housing that is developed that has pent-up demand, will have a positive impact on the housing market if the goal is to reduce increased housing costs.”

Hall said the increasing rental rates affect residents in more facets than housing. Local businesses have been negatively affected as well, which will in turn impact the Ann Arbor community. 

“The service industry is one of the back-bones of the economy and something that many people take for granted,” she said. “Local service industries such as restaurants, hotels, grocery stores, landscaping and the like are reporting that they are having a hard time filling positions because the people who work in those industries cannot afford to work in Ann Arbor due to the cost of the commute or literally the difficulty and time it takes to commute if they do not own a reliable vehicle.”

To Pantaleo, it is unreasonable that both landlords and the University expect students to pay high rent while in school. She believes the University has a responsibility to help make off-campus housing more affordable and accessible for students, and hopes they will partner with the city and local property management companies to make housing more accessible. 

“I’m under a lot of scholarships for my tuition, but I don’t have anything for housing and that’s my biggest expense here,” she said. “The University should step in and talk to these rental places because it’s pretty outrageous for any place to expect students to pay $1,100 a month when in school.”