by P.D. Lesko
Ann Arbor, MI Rep. Carrie Rheingans (D) has set her sights on repealing the Michigan Public Act 226 of 1988, signed into law by Gov. James Blanchard in July 1988. That Act stripped local governments of the right to control what’s referred to as “rent stabilization” and prohibited rent control. Rent control allows governments to limit how much a landlord can charge for a unit. Rent stabilization puts caps on rent increases. On Sept. 7, 2023, Rheingans introduced House Bill 4947 which would repeal 1988 PA 226 (MCL 123.411). Along with the co-sponsors of her legislation to repeal 1988 PA 226 (MCL 123.411), Rep. Rheingans would restore the power of local government in Michigan to control and curb the amount of rent charged by landlords statewide.
Critics of the Michigan Public Act 226 of 1988 say that one direct result of that legislation is that in a number of Michigan cities including Detroit, Ann Arbor and Grand Rapids, more than one in four renters now spend at least half their income — or more — on rent. In comparison, banks generally will not originate a mortgage for someone to purchase a house if the purchaser would pay more than 35 percent of her/his pre-tax income on the mortgage, taxes and insurance. Financial experts recommend home buyers pay no more than 25 percent of their pre-tax income on their mortgage, taxes and insurance.
Research shows that an average worker in Michigan has to earn at least $21.65 an hour — more than twice the state’s minimum wage rate of $10.10 an hour — to afford the rent for a two-bedroom apartment.
Ann Arbor voters had a chance in 1988 to vote for rent control. However, voters rejected a rent control ballot question by a 2-to-1 margin.
Opponents campaigned on claims that property taxes would increase by double digits. Specifically, that rent control would result in landlords refusing to do upkeep and maintenance on their units. As a result, assessments would fall and homeowners would be left paying higher property taxes to make up the shortfall. The Ann Arbor News labelled the 1988 rent control ballot proposal “The Great Hoax” and editorialized against it.
Citizens for Ann Arbor’s Future (a group comprised of Ann Arbor landlords) raised and spent $200,000 ($516,806 in 2023 funds) in 1988 to defeat the rent control ballot proposal.
Anti-rent control groups then elected three Republicans to the Ann Arbor City Council in this same election.
In July 1988, Gov. James Blanchard signed the Michigan Public Act 226 of 1988 into law.
In August 1988, Detroit voters approved a rent control ballot proposal. However, because Gov. Blanchard signed Michigan Public Act 226 of 1988 into law, rent control in Detroit was never implemented.
A Renter’s Prospective
In 2021, renter Carrie Rheingans threw her hat into the ring to run for Ann Arbor City Council in Ward 5. During her campaign, she talked about the fact there were no renters on Council. Her campaign pitted her against Mayor Chris Taylor's candidate, Jenn Cornell. To get Rheingans out of the City Council race against Briggs, Ann Arbor politicos encouraged Rheingans to run in the Democratic primary election for the Michigan House of Representatives in the 47th District.
When she ran for City Council, Rheingans issued a statement in which she said: “I’ve spent the last two decades of personal activism and my professional career addressing health disparities, many of which result from social and economic policies around housing, community safety and education set at local, state and national levels. I became frustrated with my experience trying to break into the Ann Arbor housing market, and, like so many systems in our country, when I dug deeper, I saw the stark and unfair differences in ability to participate between races and economic groups.”
In Nov. 2022, Rheingans beat her Republican opponent handily and now represents Michigan's 47th House District, which includes the western part of Ann Arbor.
While Rep. Rheingans works in the House to repeal the Michigan Public Act 226 of 1988, there is currently a Bill to repeal Michigan Public Act 226 of 1988 in the Michigan Senate. It was sponsored by Ann Arbor's State Senator Jeff Irwin in 2021. That legislation is currently stuck in committee.
Should the repeal succeed, Rheingans will put her political friends in Ann Arbor in the position of having the legal right to curb rents charged by their top campaign donors and business associates.
Money Talks, While Renters Protest
In 2020, Ann Arbor real estate executive Jeff Hauptman donated the maximum amount permitted by law directly to the City Council campaigns of Taylor, Ward 1 Council candidate Disch, Ward 2 Council candidate Song, Ward 3 Council candidate Radina, Ward 4 Council candidate Eyer and Ward 5 Council candidate Briggs (all of these candidates were elected). Hauptman made those donations shortly after April 2020, when he received a $1.2 million PPP loan. (His entire PPP loan was forgiven in Nov. of 2021.)
In Dec. 2020, an employee of Hauptman's company, Oxford Companies, was nominated by Mayor Taylor to serve on the city's Planning Commission. In 2022, Ann Arbor City Council rezoned over two dozen commercial properties owned by Hauptman's company, doubling the property values overnight.
In 2015, the year after Christopher Taylor was elected mayor, Ann Arbor set a quantitative target of 2,800 new units of affordable housing by 2035. Public records show over the past seven years Ann Arbor has fallen behind on that target by almost 600 units.
Going back two decades in a search of legislation proposed by Ann Arbor Democrats on City Council, including the present City Council members, there have been many symbolic ordinances in support of social issues such as trans rights, Asian-American rights and in support of various social movements. What there has never been offered up by Ann Arbor's Democrats on City Council was any proposed legislation that called for a repeal of the 1988 Michigan law that blocked rent control.
The reason for this glaring omission is simple: Ann Arbor's mayors and City Council members have taken many thousands of dollars in campaign donations from local landlords, real estate attorneys and PACs focused on real estate issues funded by real estate agents. Long-time former Mayor John Hieftje was a real estate agent before being elected to City Council. Mayor Chris Taylor's law firm represents many local landlords and real estate companies that control the city's 40,000+ rental properties.
The Rent is Too Damn High
Rep. Carrie Rheingans, a long-time renter, has recently been quoted in The Detroit News, Bridge and Michigan Advance as saying that she will work this Fall to repeal the the Michigan Public Act 226 of 1988 and give complete control over "rent stabilization" and "rent control" to local governments, including in Ann Arbor, Detroit and Grand Rapids.
A recent protest that included around 200 people at the state capitol in Lansing focused on the need for affordable housing in the state and rent control. According to reporting from Michigan Advance, "nationally, experts say wages are remaining stagnant as rents skyrocket....Michigan is in the top 10 for states with the highest increase in rent prices from 2022 to 2023, according to Rent.com, with rents increasing on average by over 8% with the median rent sitting at $1,366."
The rally highlighted that fact that the median rent in Michigan rose nearly 9 percent in the past year — the ninth-highest increase among all states, according to an August report by Rent.com, a nationwide apartment search engine owned by real estate company Redfin.
Ann Arbor has been a hotbed of landlord-tenant struggle since the 60s and 70s. The Ann Arbor Tenants Union was formed in 1968. For decades, the group provided help and legal advice to tenants. In 2022, the ATU announced it was no longer providing services to renters due to "staff burnout" and the loss of several key leaders. AATU's Facebook page recommends tenants in need of help turn to the University of Michigan graduate student union (GEO).
There are other tenant organizations, however. McKinley Tenants Association says that company owns 60% of workforce housing in one of Michigan’s most populous counties making it “impossible” for people like nurses and teachers to live in Ann Arbor.
Over the past two decades, including during the years City Council was controlled by Democratic Council members and led by Democratic mayors John Hieftje and Chris Taylor, median rents in Ann Arbor increased from $958 to $1,139, according to data from the U.S. Dept. of Labor. The percentage of renters in Michigan has remained steady at about 28 percent. In Detroit, the rental fraction of the housing marketing is around 18 percent. In Ann Arbor, the portion of the housing market comprised of rentals is 38 percent.
To further compound the problem, Ann Arbor and Detroit are thousands of units behind in building or creating the number of low- and middle-income apartment needed to provide housing for low- and middle-income renters.
In Ann Arbor, the current Mayor and City Council have danced around advocating for rent control.
In Sept. 2021, Ann Arbor City Council members voted 10-1 and established a Renters Commission. From the 2022 Annual Report: "City Council wished to create a commission where stakeholders can discuss issues relating to renters and advise City Council regarding policies, practices, trends, and
legislation." The group has 17 members and is advisory in nature. There is even a 2023 Renters Commission Work Plan. In that Work Plan, working to curb gentrification is listed as a "low priority."
In Oct. 2022, Ann Arbor City Council members voted 11-0 to implement a "Right to Renew" ordinance. Landlords, under this ordinance, have to give tenants the right to renew unless grounds exist to evict.
Could the current and previous Ann Arbor City Council members have done more to fight for rent control in order to mitigate the steep increases in rent over the past two decades?
Look to Boston for one answer to that question. In Massachusetts, Boston Mayor Michelle Wu and the City Council are working to push legislation at the State level that would exempt the city from the state’s 30-year-old rent control ban.
Six states—California, New York, New Jersey, Maine, Maryland, and Minnesota—have localities in which some form of residential rent control is in effect. The District of Columbia also has rent control for some rental units; publicly owned or assisted properties, properties built in 1978 or later, and properties held by an owner with fewer than five rental units are exempt from D.C.'s rent-control law.
Thirty-seven states either prohibit or preempt rent control, while eight states allow their cities to enact rent control, but have no cities that have implemented it.
As of 2019, about 182 U.S. municipalities have rent control: 99 in New Jersey, 63 in New York, 18 in California, one in Maryland, and Washington, D.C. The five most populous cities with rent control are New York City; Los Angeles; San Francisco; Oakland; and Washington, D.C. The sole Maryland municipality with rent control is Takoma Park.
Should Rheingans' legislation pass the House and Senate and be signed into law, Michigan would join Oregon and California as the only states with rent control permitted statewide.