Archive for Monday, September 5, 1994

BIG RENTALS BRING EVEN BIGGER RENTS

September 5, 1994

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Several factors play a role in establishing housing rental rates in Lawrence.

Many people looking for rental housing in Lawrence find themselves priced out of the market.

Consider, for example, Anne Calvert. She and her roommate scoured the classified ads, called landlords and talked to friends as they tried to find a house to rent.

Calvert, 27, said she had some criteria:

  • She wanted a house.
  • Although she would have settled for an apartment in a house, she wasn't interested in an apartment complex.
  • She needed two bedrooms.
  • And she hoped to find something within walking distance of downtown, although she was willing to go outside that area.
  • Her price range: less than $500 a month.

It was a difficult search.

"I called at least two dozen people. At least," said Calvert, a non-traditional student.

She looked at several apartments, some of which were just "too weird." In one, the kitchen and living room were one area and the bathroom sink was in a bedroom.

The grapevine pays off

She stumbled onto the three-bedroom house she now rents in East Lawrence. Word-of-mouth was her savior.

Calvert, who grew up in Emporia, said the price of rental housing in Lawrence was a shock to her.

"Everything revolves so much around campus, so you have to gear your life to the semester break," she said.

It's more than the semester break.

College students, particularly Kansas University students, can have an adverse effect on other people in Lawrence who are seeking housing.

"The student market has really boosted rents here," said Jay Leipzig of the city's Housing and Neighborhood Development Department.

Part of the reason is competition. Another reason is that several students can afford to rent, say, a three-bedroom dwelling.

"Students skew the rental market incredibly," said Charlotte Knoche, director of the Section 8 program for the Lawrence Housing Authority. "The presence of a large student population causes a lot of competition for the more affordably priced unit. It also creates a situation where larger units -- three- and four-bedroom units -- can be rented for more by what I call `renting by the head.'"

That's a practice by some landlords of charging each person who lives in a dwelling the same amount, say $200.

"Automatically that house rents for $600, whether or not it's worth it," said Knoche.

Students like it off-campus

At KU, no vacancies exist in family student housing, graduate student housing, scholarship halls or Jayhawker Towers apartments. However, it's a different story in the university's residence halls, where 400 to 500 additional students could be accommodated.

Ken Stoner, director of KU student housing, would like to see more students in residence halls. The university hopes to convert at least some residence hall rooms into suites that might attract students who otherwise would move to apartments, he said.

There is no question that rents in Lawrence have increased steadily over time. In the past few years, the rate has accelerated.

A market analysis of Lawrence apartments showed rents increased between 6 percent and 8 percent in the two years that ended last January.

Costs increasing

The demand for housing by students is just one part of the equation, said Mike Bogard, a realtor at Stephens Real Estate who owns several rental units. Higher property taxes and the increased cost of construction also contribute, he said.

"The price of buying the property and maintaining the property has gotten higher and higher," he said.

The cost of a vacant lot, for example, has risen from the $12,000 to $15,000 range five years ago to $26,000 to $30,000 today, he said.

So landlords who own new housing are forced to increase rents to cover their payments to lending institutions. Other landlords, of course, follow suit.

"You can't own them if you can't make your payments or at least break even," Bogard said.

According to information provided during the 1990 U.S. Census, monthly rents in Lawrence are higher than most other areas in the state. The median monthly rent in Lawrence is $415, compared to $372 for the state. Median means that half of the rents are higher and half are lower.

Monthly median rents in other large Kansas cities ranged from a high of $549 in Overland Park to a low of $374 in Kansas City.

According to Census information, of Lawrence's 13,145 renter-occupied housing units:

  • 702 carried monthly rents of less than $200.
  • 1,829 had rents from $200 to $299.
  • 6,810 were from $300 to $499.
  • 2,931 were from $500 to $749.
  • 463 were from $750 to $999.
  • 228 rented for $1,000 or more.

As the mayor-appointed Housing Study Group has worked to produce a guideline for housing policy and the allocation of resources, rental rates have been examined. The group hopes to submit its report to the city commission in the next month.

According to Jim Schneider, a landlord who is a member of the housing group, information compiled by the group indicates Lawrence offers affordable efficiency, one- and two-bedroom apartments. But he said there's a need for larger rental dwellings -- ones that are attractive to both students and families.

"If you look at the data, then we need to build more three- and four-bedroom apartments," he said.

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