August 18, 2009
Landlords facing challenges as college students begin to return
Joe McIntyre/staff photographer
Landlord Erich DeMunn adds vinyl siding and metal window trim Saturday to a three-bedroom property located at 18 Harrington St. in Cortland. DeMunn will be renting to three SUNY Cortland college students.
With the arrival of several thousand SUNY Cortland students imminent, local landlords are devoting their time to maintenance at the many student housing rental properties around the city.
Rental units make up 52 percent of residential properties in the city, and Judd Seales, who owns Paradigm Properties with his father, Gary Seales, said rentals are one of the city’s biggest sources of revenue.
Given that, he said it can be difficult to determine the motives behind steep tax hikes on business owners, and of the city’s new rental permit program.
“I’m really worried. Every year, I do tons of remodeling. I’m not going to do any this year,” he said. “Sometimes, I feel like they (city government) have it out for landlords.”
The city’s rental permit ordinance will eventually require landlords to pay fees to acquire permits and submit to periodic inspections, possibly facing stiff fines — up to $200 per business day — for noncompliance.
During discussion of the possible fee schedule at Common Council meetings, Alderman Brian Tobin (D-4th Ward) said the program will address the overall quality of student housing in the city.
But Mando Books co-owner Tom Terwilliger, who also owns and runs several student rental properties, said the ordinance duplicates requirements landlords already face — SUNY Cortland requires annual inspections of rental properties before they are included in the list of approved student housing.
“These laws are already on the books,” Terwilliger said. “Why don’t we enforce the ones we already have?”
Gary Seales agreed.
“If the housing stock was that bad, the Code Office would be doing something about it,” he said.
One benefit of the permit program, he said, would be that the city will now be able to mandate inspections for “problem” properties — something that until now has depended on voluntary compliance. However, Gary Seales said the ordinance is more likely an attempt to enforce the “Three-Unrelated” ordinance, which prohibits more than three unrelated people from living in the same rental unit.
“If you limit the number of students, you limit the amount of revenue, and you limit someone’s ability to be profitable,” he said. “It’s a disincentive to turn properties into student housing.”
Charles Glover, city code enforcement director, said the rental permit program will allow the city to enter and inspect the kinds of properties that have typically presented the largest number of problems — single- and two-family homes, which under the old law were not required to undergo periodic inspections.
The abundance of rental units in the city has led to stiff competition, and increased expectations from students are already driving an overall increase in housing quality. This year, Judd Seales finished remodeling a house on Harrington Street for student rental. The subdivided house features modern light fixtures, newly-renovated kitchens, and plush furniture — and, crucially, is perhaps a five-minute walk from campus.
He said proximity to the school is particularly important.
“If it’s more than a quarter-mile or half-mile from campus, students aren’t as interested,” he said.
Glover said the student housing rental stock has improved since he took charge of the city’s code enforcement office in 2000.
“Clayton Avenue, when I got over here, was bad,” he said. Now, the properties on the street are visibly improved, along with most student rentals in the city. He said the improvements have been due partly to pressure from his office, and also to increasing competition between landlords for a fixed number of students who live off campus.
Local landlords remain confused, however, about the construction of the Troy-based United Group Development’s 356-bed, $21 million College Suites complex on Tompkins Street Extension near Route 281 in Cortlandville. None seemed sure of what to make of the developments, which they said duplicate a dorm-style environment and sit about a mile and a half away from most of the SUNY campus.
The two buildings have also contributed significantly to an overall 500-bed increase in the Cortland area’s student housing stock, which, since the school has no current plans to increase enrollment, might lead to concerns by landlords of a drop in rental rates.
So far, though, this has not been the case, Gary Seales said. The College Suites units initially advertised rental rates ranged from $3,600 to $4,100 per semester, above what local landlords feel is the going rate. The company confirmed its rates.
“Why would a student leave a dorm to move a mile or mile and a half outside of campus, to live in another dorm?” Gary Seales said. “It’s illogical to me.”
United Group Executive Vice President John Ball said the response so far has been in line with expectations for the College Suites — he said he expects between 100-140 beds to be filled in the 165-bed Building A for the first year. Ball said Building B will open for rental next year.
“It’s a very good fill-up for the first year of a unit like this,” Ball said. “In the first year, you usually have about 50 percent filled, and by the second year, you’re over-subscribed.”
Ball said College Suites has offered various bargains to entice students, including offering free Nintendo Wii systems one week, a $400-discount during another, and exempting students from the security deposit another.
The Seales agreed the threat of a price drop created by a student housing glut has been more speculation than reality, and the tough economic times may have the effect of weeding out property owners unwilling or unable to bring their rental units up to the increasingly high standards expected by renters — although well-meaning small-time or first-time rental owners may also be forced out of the game.
“The hope is, if you have real good properties in good locations, you won’t have problems,” Gary Seales said.
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