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Archive for Monday, July 29, 1991

RENTERS

July 29, 1991

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Homeowners know all too well how much it costs them to maintain their homes and pay property taxes on them, but apartment dwellers tend to hand over their rent checks without giving much thought to exactly what they're paying for.

But in Lawrence, upkeep, debt payments, rising property values and tax increases translate into a $10 to $20 increase in monthly rent rates each year for most renters.

Also supporting higher rents this year has been a decline in the number of building permits issued for multi-family construction in Lawrence.

Jack Brand is an attorney who represents the Lawrence Apartments Assn., whose members are mostly owners of large apartment complexes. He said apartment owners must pass along cost increases to their renters to service debts and secure a profit.

"It's a fact of life in America and in Lawrence that when the costs of operating an apartment go up, the rents go up," he said. "The biggest expense in most projects is debt service."

Developers typically borrow about 75 percent of the costs of a new apartment complex and their large principle and interests payments make up the bulk of their operating costs. While that cost is relatively stable, other costs, including maintenance expenses and property taxes aren't.

FOR EXAMPLE, Colony Woods, with 370 units, is valued at $9.6 million. That translates into about $151,813 in property taxes this year. Expected increases in the local mill levy rate for 1992 would push that total even higher.

That increase will be shared by the owners and their tenants, but the increases could have been even higher. Developers and renters alike fought an attempt that began last year to increase the rate at which rental property is assessed from 12 percent, which is the rate for private homes, to 15 or even 20 percent.

Resistance has stalled the movement, said Brand, because many legislators thought neither renters nor owners could afford a stiff hike. A joint legislative committee had considered studying the issue this summer but struck it from the agenda.

Owners have other concerns, Brand said management costs, maintenance expenses and sometimes utility bills.

Renters too can face problems, said Julia Pitner, a renters' advocate and representative of the Consumer Affairs Assn., which will close its office soon.

Strong demand for housing near Kansas University makes Lawrence the most expensive place in Kansas to rent, she said. And although most landlords' practices are commendable, a few cause serious problems for renters.

AS MANY leases expire this week, Pitner expects to hear complaints at the consumer affairs office about owners failing to return security deposits within 30 days or fully explain withheld portions. For an unreturned deposit, Pitner said, tenants should take their landlords to small-claims court after a reasonable time has passed.

"The law's fairly clear on that," she said. "However, the court doesn't like to hear these complaints on the thirty-first day."

For serious problems that arise in the middle of a lease, she recommends the renter send a letter to the landlord demanding compliance or an end to the lease within two weeks. Most oblige, she said.

"No landlords likes to lose a tenant in the middle of the lease," Pitner said.

Another pitfall is brought about by the renter's own negligence. Most landlords send renewal notices to tenants, specifying that they return them to indicate whether they will renew another 10 or 12 months. Some renters, Pitner said, fail to realize that renewal will go into effect automatically if the notice is not returned.

THE CONSUMER Affairs Assn. is scheduled to close shop Aug. 15, but a non-profit credit corporation dedicated to improving housing conditions based in Topeka may open an office here to take up the slack in housing matters, Pitner said. Also, renters and other consumers can call the Better Business Bureau at 749-0990.

In addition, Lawrence has applied for membership to the Neighborhood Reinvestment Corp., a non-profit organization that lends money to renovate existing housing.

"There's a real big push for housing," she said. "Housing is a fundamental need. Eliminating what we do would create a big hole," she said. "It hits people where they live, so to speak."

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