Local businesses and employees struggle as Ann Arbor rent rates increase

Sunday, September 22, 2019 - 10:10am

.

Design by Lizzy Rueppel

Ann Arbor rent has skyrocketed in the last year, according to recent reports. And while the cost of living in the city continues to rise, local businesses are having trouble filling positions and keeping employees, as some residents feel unable to keep up with the rapidly increasing rent rate.

Since the demand for housing continues to be a concern in Ann Arbor, property management owners have built more housing structures, most of which are luxury high-rise apartments with expensive rent rates — the newly built Vic Village, for example, has an average rent of $1300 per person per month for a 4 bedroom, 4 bathroom unit. 

But as demand rises higher than supply, access to affordable housing has become less available. To navigate this issue, many people working in the city resort to living in areas outside of Ann Arbor, such as Ypsilanti. This poses another barrier to employment, as some residents may not be able to afford the added costs of a commute or have no reliable means of transportation of their own. 

There are many factors an Ann Arbor employee must consider when looking for jobs, including the ease of their commute and certain employee benefits to determine if working in such an expensive city is worth it, said Jennifer Hall, executive director of the Ann Arbor Housing Commission

“People are finding housing and then looking for jobs based on the distance, commute and ease of getting to work … and if they do not offer benefits like health care and paid sick time,” Hall said. “When workers are transient, it is harder to attract or keep them if they have a hard time getting to and from work.”

Phillis Engelbert, owner of local restaurants The Lunch Room on Fifth Avenue and Detroit Street Filling Station in Kerrytown, said many of her employees cannot afford to live in central Ann Arbor due to high rent prices.

“Some of our employees live in Whitmore Lake, a number of them live out toward the edge of Ann Arbor and Ypsilanti in the apartment complexes on Washtenaw and Packard and areas like that,” Engelbert said. “It’s almost impossible for them to find housing in central Ann Arbor. They’re just priced out.”

Engelbert echoed Hall’s statement about the added difficulties a commute poses for employees working in Ann Arbor. 

“I have personally tried to help some of our staff find housing closer to work and it’s a real challenge,” Engelbert said. “We’ve had to alter people’s schedules so that they can make it back to Ypsilanti with what the bus allows.”

Mitch Czechowicz, kitchen manager at the Detroit Street Filling Station, recently moved to Ypsilanti due to high Ann Arbor rent rates.

“I moved to Ypsilanti because I couldn’t really afford to live in Ann Arbor anymore,” Czechowicz said. “I was living with two other guys and our rent was just most of the money we were making for not that much space at all… I pay about $200 a month less in Ypsilanti for more space.”

Czechowicz faces a 25-minute daily commute to work from Ypsilanti, sometimes taking up to an hour due to traffic and vehicle issues.

“I gotta deal with rush hour and dealing with either 94 or Washtenaw and spending like an hour in traffic on a lot of days, and then just money put into gas and wear and tear on my vehicle,” Czechowicz said.

Engelbert said Ann Arbor has become an exclusive place for the elite because of the high rent prices.

“We pay our people pretty well especially for a restaurant, but Ann Arbor has become so exclusive and elite in terms of who can afford to live here that people who make a normal amount of money just can’t find housing,” she said. “They cannot afford to live in the city. Ann Arbor as a whole is part of that trend toward gentrification and the rich get richer and the poor move out of town — and it’s not just the poor. $38,000 a year isn’t poor; it’s normal, and people can’t afford to live here.”

Engelbert stressed Ann Arbor should push toward more affordable housing and be more inclusive of those from diverse socioeconomic backgrounds.

“It will have to take a concerted effort by public and private sectors to make it do anything different,” Engelbert said “There has to be a will and a desire to see Ann Arbor be an economically diverse city. If there’s not a will and a desire to see that, then we’ll just keep trending more and more toward wealthy residents.”

Other local businesses are facing similar issues. Nick Yribar, co-owner of local comic book store Vault of Midnight on S. Main Street, expressed the difficulty his business has had in accommodating the rising costs of rent in Ann Arbor for employees.

“We’ve been in Ann Arbor for 23 years, so we have seen how the market has changed … it’s heartbreaking,” Yribar said. “We employ maybe 10 people just at our Ann Arbor shop and it’s just increasingly difficult for anyone that works for us to live in this city.”

Vault of Midnight has attempted to keep existing employees and recruit new employees despite housing unaffordability by negotiating pay raises and offering employee benefits that may not be available at other businesses. 

“We’re in the process right now of raising the base pay for our staff for the entire company,” Yribar said. “We try to be as competitive as we can; we offer SIMPLE IRA programs and health care and profit-based bonuses, and all of this is just in an effort to keep people around given that they can’t afford to live in Ann Arbor. I don’t think any of our staff lives within the city anymore, I think almost everybody is commuting from Ypsilanti or farther.”

Issues like high rent prices aren’t only affecting the city at the residential level, but also entire businesses and their ability to remain open in Ann Arbor at an affordable rate. Yribar’s store has moved locations on multiple occasions due to rent concerns over time.

“Over the 23 years that we’ve been in business we’ve had four different locations, and we’re always moving due to rent concerns and due to issues navigating property owners until we landed on Main Street,” Yribar said. “The number one thing we’re worried about is ‘are we going to be able to afford to be in this city?’”

Local business owners worry that as rent rates continue to rise for both residents and businesses, only particularly wealthy businesses and chain locations will be able to afford to stay open, eventually eliminating the ability of current local businesses to remain open and local residents to open new businesses in Ann Arbor. 

“Especially long-standing small and local businesses (are at risk),” Yribar said. “If you just take a look at the number of vacant spots on Main Street at the moment … it’s startling to see these businesses leave.” 

Business owners like Yribar say the issue of affordable housing in Ann Arbor is the important problem facing the city right now, as it continues to affect the shape and direction in which the city progresses. 

“Affordable housing and being able to live and work in this city are changing Ann Arbor more than any other single factor,” Yribar said. “There’s nothing more pressing happening in Ann Arbor than the ability of the people that work here, make it cool and make it special being able to live here. We think about it every single day and there’s only so much we can do with a small business. We can try to take care of people, we can try to entice them to stay with us, but it is a huge issue.”

Yribar called on students to be more aware of city issues in order to get involved and make a proactive change.

“Students should be aware of what is happening in the city that they’re a part of for however long,” Yribar said. “Do we think as a city that there is value in having the voice of younger people, and of renters, and of people that don’t just own property on the west side of Ann Arbor? I think that there is, and I think that it makes the city stronger.”  

Social Work student Laura Rall is the president of Affordable Michigan, an affordability advocacy group on campus. She said the organization’s main priority for this year is to advocate for more on-campus dorms.

“U-M has increased the number of students enrolled each year over the past few years significantly. There are thousands more students, but they haven’t built any new dorms,” Rall said. “We are really trying to push this year for a new dorm being built. Obviously the less on-campus housing that’s available for students, they’re going to have to go out into the city and get these places from people who live in Ann Arbor. Same with students who commute from Ypsilanti, and it is taking homes away from people who live in Ypsilanti full-time.” 

As more expensive forms of student housing are being built, students are forced to move off-campus for cheaper options, taking homes away from people who live and work in the area full-time, Rall said.

“I think it’s 100 percent the University’s problem because they are admitting more students,” Rall said. “It’s really just not fair to the people who do live in Ann Arbor full-time, and families with jobs because it’s becoming more of a University-focused town instead of a town that also has a University in it, which is what it should be.”

Ambrose Wilbanks, workforce development liaison for Destination Ann Arbor, a local visitors bureau, highlighted the growth Ann Arbor has undergone over time, incidentally driving rent prices up.

“I was born and raised in Ypsilanti and to look at the University, it’s unrecognizable compared to what I saw in high school,” Wilbanks said. “Plus, the tax sector has expanded exponentially which if you look at people in that sector of the workforce, they tend to be more professional, more high income in the end. People will charge as much as you’re willing to pay.”

Wilbanks said since Ann Arbor has expanded, it’s well understood the demand to live here is met with many high-income residents.

“The reality is that to live here you have to have a certain amount of disposable income,” Wilbanks said.  “I think that people are very welcoming across the board with the understanding that you can only be their neighbor if there’s housing you can afford.”

Czechowicz, who has lived in Ann Arbor for about 15 years, agreed the area has changed significantly over time.

 “I mean there are a lot more corporations for one,” Czechowicz said. “Even just having things like Subways and 7-11’s right downtown seems kind of weird sometimes. I’m used to having a more localized feel to it, like when I was a kid… I wish it was the way it used to be. Ann Arbor definitely feels more pretentious than it used to be.”