Quote:
Originally Posted by Hayward
This is good news. Increasing the concentration of students closer to business districts will guarantee these areas will continue to grow.
It will also help boost rental vacancies in neighborhoods that were originally single family homes.
More empty homes in student neighborhoods will guarantee renovations to dilapidated properties and possibly a reversal of the exodus of families from the city to the suburbs as rentals return to single family. It will also cause rents to fall to more reasonable levels and force certain landlords out of the business who shouldn't be in it in the first place.
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I agree with the first half of your statement, but working in housing and community development the last 5 years doesn't give me any such hope for rentals returning to single family owner occupied units. That occurrence is extremely rare in my experience.
Generally, rentals are bare bones, and the landlords rip out or paint over architectural details that make a home unique and desirable. This is more often out of necessity to keep up with the turnover of destructive renters/students.
Second, landlords generally don't sell these properties because they're so lucrative...unless the landlords downright fail (which is hard to do in a college town). And if they do sell, they usually revert right back to rentals for the aforementioned reasons. The landlords could probably still turn a profit in Ann Arbor if the rents fell by 50%.
A third reason is that college towns are transient places, with many people coming and going, buying and selling. Couple this with many houses being upside down on their mortgages, even in nice places like Ann Arbor. If my SO and I move out of very well located house between MSU and downtown, we'd almost certainly turn it into a rental for this reason. It's probably going to take a decade before homes regain their lost equity. Why sell and take a loss when you can keep it and turn a profit from well off grad students?
So I'm not very hopeful that these homes would revert to owner occupancy, but I guess anything could happen. I would predict that this would have little more affect than drawing more kids to these rental houses from outlying areas, particularly those who would rather live nearer to downtown but previously couldn't afford it.