Elizabeth Nelson's City Council Blog

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I write a City Council newsletter with my summary of agenda items coming before City Council. Sign up to receive it first via email, or read it here later on this blog.

Additional Thoughts (June 5, 2021) - Early Leasing Ordinance

The following was originally published in my June 5, 2021 Newsletter in the "Additional Thoughts" section.

My email this week has overwhelmingly covered two topics: the Valhalla development (PH-2/B-2 and PH-3/DB-1) and the Early Leasing Ordinance (C-1). I am using this space to discuss the Early Leasing Ordinance. I have written a separate blog post about Valhalla, which you can find here:

https://www.a2elnel.com/post/ward-4-development-valhalla



C-1 (21-0640) An Ordinance to Amend Section 8:530 of Chapter 105 (Housing: Entry to Show Premises and Time for Rental Agreements) of Title VIII (Building Regulations) of the Ann Arbor City Code



EARLY LEASING ORDINANCE

Earlier this year, the Graduate Employees Organization (GEO) and Central Student Government (CSG) at the University of Michigan brought an issue to me: the City’s Early Leasing Ordinance (ELO). This ordinance currently restricts landlords from showing apartments to potential tenants or renewing leases any earlier than 70 days into a current lease. I wrote about this in my Feb 27th newsletter:


Tenants are often asked to renew a lease (or told that their apartment is subject to visits/tours from future tenants of the next leasing term) a little over two months into a twelve month lease. Current and potential tenants are pressured to sign rental agreements (accepting thousands of dollars in liability) far in advance of the actual leasing term, well before anyone might be certain about their future housing needs or preferences. If a tenant’s circumstances change, transferring a lease is subject to approval by the landlord; tenants risk more liability when they sublease an apartment to someone else who might cause damages or fail to pay.


This situation becomes an equity issue when access to housing depends on a person’s ability to make large financial commitments - in both deposits and future liability of the contract - so many months before a leasing term even begins. The risk of signing these early lease agreements is much higher for people with less means.


https://www.a2elnel.com/post/additional-thoughts-feb-27-2021-fair-chance-early-leasing-ordinances


At the April 5th Council meeting, the agenda included an amendment to the ELO that would have extended the timeline from 70 days to 240 days. After discussion with City staff, lawyers, and advocates, that agenda item was postponed, so that we could specifically contemplate enforcement mechanisms. Since that April meeting, additional concerns have been raised, many more stakeholders have met to discuss it, and we now contemplate more comprehensive strategies to address the problem. I expect C-1 to be postponed at this week's Council meeting, and when it returns to our agenda it will look very different.


STAKEHOLDER INTERESTS

In the last several months, I have been talking to local landlords, tenants, local housing advocates, attorneys at the City and the University of Michigan, and attorneys for housing advocacy organizations. I have coordinated meetings between City legal staff and GEO leaders, local landlords and GEO leaders, University legal services and GEO leaders, landlord association leaders and GEO and CSG leaders, in addition to many more conversations with local housing advocates.


There is near unanimous agreement that a problem exists: it is not good for anyone to be entering into contracts for housing so far in advance. An important point of agreement between landlords and tenants: any solution to the problem must be enforceable, so that all landlords and tenants are subject to (and protected by) the same set of rules.


What began as a discussion of our early leasing ordinance is now a much more interesting idea: granting a tenant the right to renew a lease. Such a provision would address premature lease commitments as well as protect every tenant in the city who would choose to remain in a rental unit.


JUST CAUSE FOR EVICTION

States and municipalities around the country have approved these ordinances: larger communities like Chicago, Seattle, San Francisco, Philadelphia, and St. Paul, MN as well as smaller communities like San Jose, CA and Berkley, CA. The city of Burlington, Vermont is currently working on a "just cause" ordinance. State law in New Jersey and New Hampshire include “just cause” protections.


A “right to renew” provision in state or local law gives tenants rights, unless “just cause” exists to end the tenancy. Standards for “just cause” include reasonable circumstances, e.g. the tenant has violated lease terms or failed to pay rent, the landlord wants to take the unit off the market for their own use, the landlord wants to transfer use of the unit to a family member, or renovations are planned that interfere with occupancy.


In places where “just cause” ordinances have been implemented, housing advocates point out that non-renewal of a lease can happen in a discriminatory way. All federally supported housing (funded by HUD) requires that leasing terms include “just cause” provisions in order to prevent discriminatory non-renewal. In Ann Arbor, all 545 units of housing managed by the Ann Arbor Housing Commission include these provisions; all of the approximately 350 current (and 60 more in construction) housing units managed by Avalon also include these protections.


LOCAL SUPPORT

This week, Council received many many emails from many people in Ann Arbor - renters, homeowners, students, professionals - urging us to implement an ordinance that will protect tenants in Ann Arbor. I’d like to share a few excerpts from the emails we are receiving:


I support an amended ordinance that gives renters a “right to renew” and prohibits landlords from showing or leasing our apartments until 210 days after leases begin. This change gives renters much more time to evaluate their housing options, solidify future employment/education plans, and make a fully-informed decision to either remain in their unit or move elsewhere.

The city’s pre-pandemic vacancy rate was 2-3% (3-4% since), compared to 6-7% across both the US and Michigan broadly. Were this our unemployment rate, the city would laud itself for “full employment”, but at this moment the landlords alone are fully "employed". The effects of the housing shortage are real. Any claim that landlords need 7 months to replace a renter is not.

For many renters, securing housing is a difficult decision with heavy implications. Some of us are students, and some are precariously employed. We are restricted by housing discrimination, both legal and illegal. We are closely beholden to tight economic constraints, and all face the housing anxiety inherent to not owning the buildings in which we sleep.What tenants know, more than anything else, is that we do not wish to lose our housing. Tenants are vulnerable to landlords who can exploit the fact that most of us would rather sign a bad lease than be left with none at all.

A BETTER SOLUTION

The current early leasing ordinance primarily addresses problems in a very specific part of the city, nearest to campus and downtown. In most areas of the city - further away from campus/downtown - rental units are not typically leased many months in advance. Simply tweaking the early leasing ordinance (extending timelines) would have very little impact on the many renters in Ann Arbor who do not lease in those central neighborhoods of the city. However, a ‘right to renew’ or ‘just cause’ ordinance would provide meaningful protections to every tenant in Ann Arbor.


I look forward to working with City legal staff to craft this ordinance and I thank Council Member Travis Radina for his co-sponsorship and support of the endeavor!