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.
I post charts of how Council voted after each meeting, and also post my perspectives on how issues were resolved. I post news that affects Ward 4 residents tagged with "Ward 4 News", with construction updates also tagged "Construction 2021". News that affects all city residents is tagged with "City News".

Housing, Profits, and Hypocrisy

City Council’s final meeting of 2020 included an agenda item that should have prompted serious debate about the value of housing for people who want to make Ann Arbor their home. Unfortunately, it did not.



BACKGROUND


In September, Council passed an ordinance strictly regulating dedicated, full-time short term rental businesses, permitting them only in very limited areas of the City (areas zoned for mixed or commercial use). This ordinance will prohibit an estimated 100 to 200 short term rental housing units that currently exist in residential areas. These are housing units that were previously long-term residences (homes or rentals) but have been converted in recent years to short-term rental (STR) businesses. The September ordinance enforces our zoning laws so that starting March 1, 2021, these properties cannot continue as short term rentals; they must be rented for terms longer than 30 days. The ordinance passed in September would effectively re-establish 100-200 housing units for the benefit of long-term residents.


On the December 21 agenda, a resolution from Mayor Taylor (DC-1) asked our City Staff and Planning Commission to find a way to weaken the September ordinance, preserve STR units already in existence, and effectively keep those housing units out of the long-term housing market. You can find the resolution here:

https://a2gov.legistar.com/LegislationDetail.aspx?ID=4733989&GUID=7AA9862B-49AD-4541-9831-4FE461B4AF9E


Ahead of our meeting, I wrote about it in my newsletter:

https://www.a2elnel.com/post/additional-thoughts-dec-19-2020-amending-the-short-term-rental-ordinance


At that meeting, the resolution DC-1 was approved 7-4, with support from all the new Council Members as well as Mayor Taylor and CM Grand.



TRADE-OFFS and SACRIFICES


Five new members of Council were elected last month. All of them campaigned on the goal of more housing in the city and the idea that additional housing supply (at every price point) will result in more affordable housing. Advocates for this housing supply theory often insist that adding units of housing will require us to make trade-offs and sacrifices, some of which may be difficult, but it is for the greater good of affordability. Mayor Taylor has often referred to this as “discomfort.”


In discussing specific developments, Council members have at various times suggested that we must ignore a range of concerns raised by residents (e.g. environmental, traffic, safety), in light of the affordable housing crisis. One of my colleagues takes credit for having done “pro bono” communications work in support of dense senior housing on top of monitoring wells for the Gelman Plume contamination site. In defense of controversial and unpopular developments, members of Council have argued that the affordable housing crisis forces us to make “tough decisions” in support of more housing units wherever they can be built.


The STR ordinance passed in September - including the restriction on non-owner-occupied units - is remarkable in that it promotes more housing and the only trade-off is profit. A policy that would return STR housing units back to our long-term housing supply is not a ‘tough decision’ in any way, shape, or form. Regulation of this very specific business model has a narrow impact: it will affect a small number of investors, many of whom do not live in our community. Moving forward, these investors who own residential properties will not be able to earn profits via the relatively new business model that depletes the housing supply available to residents. That is the only sacrifice. For a majority of my colleagues, that sacrifice (i.e. profit for a small number of investors) is too much.



PUBLIC ADVOCACY


Investors in STR’s have offered an interesting set of arguments for why their business model must be preserved in residential areas. They claim to provide an essential service to the community, that their STR investment properties must be preserved for the benefit of medical patients and their families. (Presumably, there was no safe or comfortable place for these medical patients and their families to stay before the existence of STR investment properties.) It has also been suggested that there is community benefit when investors maintain their own properties to a high standard, and that short-term-rentals are better neighbors than run-down student rentals. This argument ignores the fact that a shortage of student rentals puts pressure on our housing market; there is a very real community benefit to preserving more units of student housing, rather than eliminating them.


At our meeting on 12/21/20, I was shocked by how readily my new Council colleagues repeated some of these talking points from STR advocates and rationalized their own support for DC-1. I had expected much more reluctance and hesitation, given how housing issues have been discussed in the past, both at the Council table and in political campaigns. Because this resolution was preliminary— asking only that amendments be drafted for later consideration — I expected to hear more uncertainty from my colleagues about whether or not they would ultimately support the idea when it came back. I was genuinely surprised to hear Council members argue that regulation of STRs was “punishing” investors, that this “small number” of units doesn’t have much of an impact, and that these non-owner occupied units actually “provide benefits within our neighborhoods.”



PRIVATE ADVOCACY


Council members are regularly contacted by people who have an interest in the decisions coming before us; it is perfectly normal for those conversations to happen. Sometimes investors and developers will reach out to individual Council members to talk to us about projects they are working on— they want us to understand the details of their proposals, get feedback from us about potential concerns, and they often ask for our help in promoting neighborhood engagement. These sorts of conversations are informative and appropriate, sometimes persuasive.


In my two years on Council, I have had many conversations with people who hope to see me vote in support of something, people who have a lot at stake that depends on my vote. Until recently, none of those conversations have ever referenced personal benefit or favors to me. Until very recently, no one has ever tried to influence my vote with anything other than information and reasoning. This summer, I was fairly stunned when an STR investor told me: “Elizabeth, I need your help on this. If you can help me with this, I will make it up to you. I don’t mean a bribe, but if you could just help me.” Nothing about that remark was normal or appropriate. I cannot know the experience of other Council Members, but this was the very first time that anyone offered to do anything for me, personally, in exchange for a policy decision. I hope that my new colleagues on Council also understand: this is not normal or appropriate.



COMMUNITY INTERESTS


In the broader community, most local housing advocates and housing organizations - people who typically coordinate email campaigns in the days leading up to Council decisions re: housing - were notably silent for this agenda item. An organization literally called “Neighbors for More Neighbors” has not offered any support for this ordinance/policy that is very specifically about exactly that: making sure that housing units are available for neighbors. In the days leading up to our Council meeting, I did see supportive remarks from the Ann Arbor Tenants Union and the local chapter of Democratic Socialists of America:


Large investors who have managed to hoard our housing stock using AirBnB should follow zoning laws -- not be "grandfathered" in and allowed to evade regulations, granting them a monopoly. Council members have pledged to address the affordable housing crisis in Ann Arbor. Along with fighting to get more units out of a big developer, you should be fighting hard to protect *hundreds* of residential units for residents, with the STR ordinance.

- Ann Arbor Tenants Union


If this amendment is passed it will allow residential property to be used for business purposes thus removing desperately needed housing from our city. Additionally this amendment will create a loophole that will serve to enrich current landlords whose profits will increase astronomically since their competition is barred. Please respect the will of the council vote in September.

- Huron Valley DSA (Democratic Socialists of America)


On December 21, a new majority on Council voted with Mayor Taylor to preserve existing short-term-rental investments in residential neighborhoods. This is informative. We now know: when some people claim that their highest priority is more housing for residents and argue that controversial developments must be approved because of the clear and obvious community value of more housing units, this is not necessarily an accurate statement of their values. The resolution approved on December 21 offered a very clear choice between more housing units for the community or protecting profits for the small number of people who own those housing units; the self-described “housing advocates” on Council explicitly chose the latter. The bottom line of individual investors seems to matter more than the housing itself.



NEXT STEPS


Approval of this resolution should have prompted quite a lot of meaningful community discussion about the influence of property investors and about housing issues generally. So far, it has not. I’ve seen little or no discussion from advocates about the loss of these housing units, how the requested amendments would contradict previously stated goals and also contradict campaign promises (mere months after such promises were made).


There will be more discussion of this issue in the next few months. Amendments will be drafted and they will likely be discussed at Planning Commission before they are presented to Council. I sincerely hope to see more thoughtful consideration of and advocacy around this issue when specific amendments are discussed at both Planning Commission and Council.