ITS LONG, BUT EXCELLENT ARTICLE BY MIKE ANDERSON. SHOWS MANY SIDES OF A DIFFICULT TOPIC! CEDAR FALLS | Lynn Nielsen has lived in his home on the 2400 block of Tremont Street for 34 years, deep in the heart of the College Hill area. Of the 17 houses that line his street, five are occupied by homeowners while 10 have been converted into rentals. Nielsen is a professor of education at the University of Northern Iowa. As a longtime resident, he is accustomed to the flavor of life among renting students, but that doesn’t mean he is always pleased with it. Fed up with the poor upkeep and raucous late-night parties, Nielsen, along with many other homeowners in the community, think rentals in single-family neighborhoods need to be more strictly regulated. “We are a warehouse area for students but not a community,” Nielsen said of his neighborhood. The professor is also a member of the city’s single-family conversion task force, a group that for the last several months has examined solutions to what has become known in Cedar Falls as the “rental problem.” How dire a problem it is depends on who you ask, but when considered next to state and national statistics, the city’s situation is typical. Today, the nation’s housing stock sits at 35 percent rentals, according to a 2013 report by the Joint Center for Housing Studies of Harvard University. In Cedar Falls, 35.9 percent of the homes are rentals. Many homeowners argue the presence of rentals in single-family neighborhoods leads to littered lawns and noisy neighbors. Yet the majority of violations in Cedar Falls are actually perpetrated by homeowners, not renters. According to Public Safety Director Jeff Olson, 60 percent of property-related code violations occur on owner-occupied properties. By the task force’s recommendation, the City Council has enacted stricter code enforcement across the board, and Cedar Falls is a few weeks into a six-month moratorium on the practice of converting single-family homes to rentals. The debate about rentals grinds on nonetheless, with homeowners decrying the deterioration of their neighborhoods while tenants and landlords protest the erosion of their rights. Some residents praise the moratorium as a step toward curtailing the spread of rentals, while real estate agents characterize the action as harmful to the city’s housing market. A growing trend “The 2000s,” reads the 2013 Harvard Housing report, “marked the strongest decade of growth in renter households over the past half-century.” In 2004, 31 percent of the nation’s households were rentals. The 2008 subprime loan crisis led to millions of home foreclosures across the country, and those displaced homeowners had to find more affordable places to live. Where owner-occupied housing floundered during the recession, the rental market rebounded quickly to meet the demand for more flexible, lower-income housing needs. By 2012, the average number of rentals across the country had climbed to 35 percent, which is proportionally where it sits in Cedar Falls today, despite it being a university town. The citys 2012 comprehensive plan reads, “64.1 percent of occupied units in 2010 were owner occupied, and the remainder were renter occupied. This ratio falls close to the range that is considered a ‘balanced market’ between owner and renter units (65-70 percent owner occupied and 30 to 35 percent renter occupied).” According to the Current Population Survey, 43 million households across the country rented their properties in 2013, and that number is expected to rise. According to the Census Bureau’s population projections, the number of renter households across the country could increase between 4 million and 4.7 million within the next 10 years. The trend is expected to flatten in the not-too-distant future, but for now renting is becoming a desirable option for more and more Americans every year. A 2013 survey by Hart Research Associates shows slightly more than 54 percent of households stated the poor condition of the economy had increased the appeal of renting. The same survey showed 57 percent of respondents thought buying had become less appealing. “All in all,” reads an excerpt from the Harvard report, “recent conditions have brought renewed appreciation of the benefits of renting, including the great ease of moving, the ability to choose housing that better fits the family budget, and the freedom from responsibility of home maintenance.” The brokers One of the homes on Nielsen’s street is in the process of being sold to a new buyer. Fred Miehe is one of the real estate agents brokering the deal. “It is a very nice area,” Miehe said. “There are neighbors there that are very protective of their homes. They don’t want more rentals there. They’re going to be tickled to death that this property will be owner occupied.” Nielsen and other concerned homeowners have argued an overabundance of rental properties in a neighborhood can lead to decreased home values. So is this true? The answer, at least according to Miehe, is yes and no. “We have shown this property to both investors and people who want to own it,” Miehe said of the home on Tremont Street. “Some of the objections we’ve faced are from people who want to buy it as an investment. They’re not sure whether the city is going to restrict their ability to rent it out. Some people are concerned about the number of rentals in the area.” That concern however is subjective, Miehe said. Some buyers in certain areas don’t care whether or not there are rentals down the block. The buyer of the home Miehe is selling on Tremont Street is a prime example. “The current purchaser said it’s just fine for what he’s looking for,” Miehe said. But the more people there are in a marketplace who see rentals as a drawback, the smaller the pool of potential buyers for any given property. As a result, the price tag of a home can indeed be lowered to compensate. Does it affect price? Miehe said. Yes, it does. At the end of the day it all depends on attitude. “You’ve got a lot more opportunities available to you if you’re not opposed to rentals,” Miehe said. The housing market ebbs and flows based on hundreds of factors, Miehe said, adding that the six-month moratorium on converting homes into rentals will do nothing but hurt the market in his opinion. “They basically have said everything is on hold for six months,” Miehe said. “If you’re someone who’s selling or wants to buy a house, it puts a lot of pressure on you. It slows the market down. I don’t think that was the wisest choice.” Miehe isn’t the only member of the real estate community in Cedar Falls who has come to this conclusion. “In my opinion,” said real estate appraiser Bill Ramsey, “the proposed moratorium will change values negatively in the short term on certain properties in certain locations in price ranges that would be attractive to investors.” Real estate agent Lynette Sorenson said she has already observed a minor slump in the market as a result of the moratorium. “I’ve actually received several phone calls,” Sorenson said. “Once I explained the moratorium to them, I’ve had some back out.” Sorenson said she has noticed the people who are backing out are small investors who own maybe 10 or so rental properties in town. Its too early to say anything definitively, Sorenson said, but something is happening. “I just know as a real estate agent it is affecting some sales in Cedar Falls,” Sorenson said. Who rents? There aren’t hard numbers available on what percentage of the local renter population is composed of students, but being a university town, the prevailing attitude is they make up a significant portion. The national numbers indicate four out of 10 renters are under age 35, but they also reveal renting has an increasing appeal for every age group. According to the Harvard report, more than a third of the nation’s renters are between the ages of 35 and 54. About 11 percent of households in their 50s and 60s have switched to renters in the last 10 years as well. “A return to renting is even more common later in life, with 24 percent of households over age 70 making that transition between 2001 and 2011,” the Harvard report reads. While it is true single unrelated individuals represent a significant segment of the nation’s renters -- about 35 percent -- families with children make up nearly the same portion of renters as single persons. More than 30 percent of America’s renters are married couples with children. “In fact,” the Harvard report reads, “the share of families with children among renters is higher than the share among owners.” These families are often younger, just getting on their feet, and cant afford a home yet. According to the Harvard study, many of those families are looking to rent in nicer single-family neighborhoods with good schools and more spacious homes. The homeowner Steve Wikert and his family have lived near Main Street for the last 37 years. In the two-block radius surrounding Wikert’s home, about a dozen houses are rentals. It wasn’t always that way. When Wikert first moved in, there were two retired couples living in rentals across the street, but Clay Street Park remained a bustling hub of playful activity for the neighborhood kids. “Nowadays the only people you see down there are college kids playing basketball,” Wikert said. “It’s really changed the scope of our neighborhood, because it used to be a family-oriented neighborhood.” Wikert said he has discovered drunken college students passed out on his porch, and has found his potted plants smashed into pieces on the front lawn. One time, he recalled, his wife was verbally accosted by a college student passing on the street. Because of these experiences, Wikert has become a vocal proponent of increased regulation of rentals throughout the city’s single-family neighborhoods. Landlords and tenants come and go, Wikert argues, while homeowners remain with their roots planted deep in the neighborhood. “We should have a little bit more of a say because we’ve stuck it out,” Wikert said. “We’re here for the long term.” Wikert favors the moratorium among other proposed policy changes, and posits that UNI should take a more paternal approach to students who live off-campus: Make them follow the same rules they would have to abide by in the dorms, and put the bad apples on probation. “We need to stop what’s going on,” Wikert said, “because there’s a decay going on in the blocks.” Where do they rent? “Contrary to popular perceptions,” the Harvard housing report reads, “most rental units are not located in large apartment buildings.” They are located in single-family neighborhoods. Between 2009 and 2011 alone, almost 2 million homes across the country switched from owner-occupied to rentals. A 2011 American Housing Survey estimates about 35 percent of the nation’s rental properties are single-family homes that used to be owner occupied, while 29 percent of rentals are in apartment complexes containing 10 or more units. About 19 percent are in duplexes or four-plexes. According to information provided by John Paul Schilling, assistant public safety director/fire chief, more than 360 households across the city have been issued rental permits since 2010. Student renters Kevin Gartman, UNI student body president, lives in an off-campus apartment complex. His argument is a mirror image of Wikert’s. “This university has been here longer than any family has been living in their house,” Gartman said. “It’s one of those difficult situations. Any area you live in, there’s always going to be positives and negatives. But the people here are living in their houses knowing they’re near a university. And I think there’s a lot of positives with that.” Gartman said it’s unfortunate a few bad neighbors have given a bad name to the rest of the city’s renting population. Task force member Victoria Hurst is the student director of governmental relations at UNI. She said the student senate will soon release a formal statement of its position on the rental issue. Most of the students Hurst has spoken to are “vehemently opposed” to one of the latest ideas to come out of the single-home conversion task force: reducing the number of unrelated persons who can rent together from four to three. The recommendation has yet to be voted on by the City Council. Hurst said her peers fear the proposal would lead to displaced tenants and increased rents. “Anything that increases the cost of going to college is probably not the best idea,” Hurst said, “because college is so expensive as it is.”
Posted on: Sun, 07 Sep 2014 14:47:24 +0000
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