When you read about people being forced out of their apartments because the landlord is going to raise the rent, you might this only happens in big cities like New York. You would be wrong. It's happening in other states, too. States like Michigan. A recently publicized case affects 144 people in the Ann Arbor area.
What's happening near Ann Arbor, Michigan
In Scioto Township, just outside Ann Arbor, 144 apartment dwellers at Woodchase apartment complex will soon be asked to leave. Why? The landlord is transitioning those units from affordable housing to market rate apartments. On a one-bedroom apartment, for example, the current rent of $770 will jump to $1,200 a month after the transition. Can the landlord do this legally? Unfortunately, yes.
Why this is happening
These units are under the Michigan State Housing Development Authority (MSHDA), who helps pay for a portion of the residents' rent. This is the Federal Section 8 Housing Choice Voucher Program that makes affordable housing possible for many low-income individuals and families. Developers who build apartment complexes can apply for a federal tax credit through the Low-Income Housing Tax Credit program. Initially, it seems like a good idea because it allows the developer to build the apartments with lower debt which enables them to offer low rental rates, which are subsidized by the government.
However, the commitment to keep rental rates low only legally obligates developers for 15 years. After the 15-year compliance period ends, landlords can opt to charge rent at fair market value. Low-income residents cannot afford it, so they are forced to move out. Some residents have had to move more than once. It's legal but it wreaks havoc on low-income families.
According to the U.S. Department of Housing and Urban Development (HUD), most properties built under the Low-Income Housing Tax Credit remain affordable once the affordability requirement expires after 15 years. But it's not much of a comfort for people like disabled Suzanne Aldea who stated “This is my hometown, I’ve lived here for 40 years. I would like to move to (an affordable unit at Woodchase) if I cannot stay where I am. I’ve been at the complex 15 years and it wasn’t my intention to leave here."
Read more about the Ann Arbor area housing dilemma at www.mlive.com/business/ann-arbor/index.ssf/2014/09/ann_arbor_area_apartment_compl.html
