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Rental restriction overlay practice questioned

November 9, 2008

At the East Lansing City Council’s meeting Wednesday, Councilmember Nathan Triplett voiced several concerns about the city’s procedure for determining its rental restriction overlay districts.

The city has 12 overlay districts in which new rental properties are prohibited. Residents can petition the city to form an overlay district in a particular area.

One of Triplett’s concerns was that the overlays are granted based entirely on which neighborhoods ask for them.

“Some of the areas have serious stability issues, but other areas are very stable,” he said at the meeting.

The city would like to maintain a mixture of rental and permanent housing, and the primary goal is to make sure that owner-occupied homes stay that way in the future, said Tim Dempsey, community and economic development administrator for East Lansing.

But in a community with a major university, people who cannot sell their homes start to think that renting their homes to students could be an alternative, he said.

“The challenge we have is, how do you prevent that from happening, because there are all sorts of statistics and research that show areas that are owner-occupied typically are more stable in terms of property values, tend to have less crime and tend to have less of the other indicators of neighborhood decline,” Dempsey said.

However, Fred Bauries, an East Lansing resident and landlord of three rental properties in the city, said that although he has followed the overlay districts since they were invented, he has always had second thoughts about the whole thing.

“I’ve always thought that if someone had a home and they wanted to rent it, they had a right to do that,” he said. “I think it also has the effect, from another perspective, of making the existing rental properties more valuable than they might be.”

The ordinance that allows for the overlays was first introduced and became effective in 2003, said Annette Irwin, East Lansing’s operations administrator for Code Enforcement and Neighborhood Conservation.

“What Councilmember Triplett was referring to is it may be time for a little research to be done to make sure this is still an effective means,” she said. “Since he’s a council person and he suggested it, I’m sure we will (look into it).”

Although the overlay districts prohibit new rentals in some areas, advertising freshman Kelly Idzikowski said that there seems to be enough houses already for rent in the city that if more districts are added, it shouldn’t be a problem.

MSU’s enrollment has remained fairly steady, which means there isn’t really a market for more rental units, Dempsey said.

“If you add too many, you’re going to saturate the market, you’re going to see more vacancies, and you’re going to make more problems,” he said.

There are houses with “for-rent” signs around East Lansing, which means there is still housing available, Irwin said.

In addition, single-family homes are a wasteful use of land and energy, and so the mixed-use model of living, such as apartments, is what will remain the dominant trend for the foreseeable future, Dempsey said.

Although some houses might be closer to campus, Idzikowski said she would prefer to rent an apartment.

“I think it’s easier to live in an apartment only because you don’t need to find the four or five people who can live together easily,” she said.

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