In an upcoming article, I will attempt to assess the state of the rental housing market in Houghton and Hancock, drawing on the experiences and perspectives of local tenants. In doing so, I will focus on the recent buyout of Houghton Rental Housing by their competitor Bradway Enterprises. While I won’t dwell on the specifics of these companies or the deal between them here, one of the issues raised in my investigation is the possibility of an impending rental monopoly in the area. In this piece, I hope to describe what such a monopoly might look like, and consider some ways it could be mitigated.
Increasingly, housing in the United States has become concentrated in the hands of a few large landlords. This has occurred both on the national scale with investment firms like Blackrock, as well as on the scale of towns, cities, and neighborhoods by individuals and smaller companies like Bradway Enterprises, Houghton Off Campus Housing (HOCH), Lahti Properties, and their competitors.
Common across these scales is an ideology which holds that housing is first and foremost an investment, rather than a place for people to live. The clearest practical effect of this belief is landlords’ tendency to do the bare minimum to keep units functional and up to code (or, in many cases, to violate codes where possible), extracting ever-higher rents for service that only ever changes for the worse. This can have dangerous or even deadly effects in an area full of fire-prone buildings like the Keweenaw.
Furthermore, property owners are incentivized to rent out units that were historically owner-occupied, decreasing the prospects of homeownership for Millenials and Gen Z (to say nothing of avocado toast). Other units that could house full-time residents are increasingly converted into short-term vacation rentals, which are often more lucrative and less regulated. In some cases, houses simply sit empty for years while investors wait for their value to increase, before selling them off again. This cartel behavior artificially increases the scarcity of rental housing, driving rents up.
Especially around the MTU campus, landlords like Bradway and HOCH already own nearly all the rental properties, locking in guaranteed leases from the many students who do not own cars and need to live close to campus. The Copper Country is becoming home to more and more renters, at a time when the cost of housing is increasing and rental units are being concentrated into fewer and fewer hands. If nothing is done to change course, we can expect the trends already present in East Houghton to spread to all of Houghton and Hancock, and perhaps beyond.
Needless to say, this situation is bad for renters. When the prevailing belief among the owning class is that profits (i.e. rent payments) come first, everything else is neglected. Too often, landlords think of tenants’ legal responsibilities under a lease as a duty, but treat their own obligations as an inconvenience. As I discussed above (and will expand upon in the upcoming article), this leads landlords to deprioritize tenants’ comfort and safety, price them out, and violate their legal rights.
Worse yet, local government and other institutions tend to share this perspective with landlords, or even help them enforce it and enshrine it in law. Municipalities generally provide police assistance in carrying out evictions and other enforcement against tenants. However, enforcing tenants’ rights is rarely within the purview of those same police departments, forcing renters who may not be able to afford a lawyer to pursue civil claims against their landlords in court. Tenants who live in unsafe conditions, have deposits withheld without reason, or face other illegal treatment by their landlord often have no practical recourse. As a result, crime by landlords runs rampant throughout the country. In college towns like Houghton, universities can also help solidify housing monopolies through tit-for-tat deals with large local landlords. However, these institutions could, and in some places do, serve the needs of tenants instead.
Local governments on the city, township, and county level have significant, though not unlimited, power to improve the situation of renters in the Copper Country. Historically, renters’ rights have not been a priority for city councils. Perhaps this is a reflection of the fact that nearly every member of the Houghton and Hancock city councils are homeowners, and a few are even landlords themselves.
Both Houghton and Hancock have implemented and amended procedures for licensing landlords in the last decade or two. While licensure is a common demand for tenant advocacy groups, the version of it that our local city councils have adopted is relatively toothless. In both cities, landlords must annually go through a building inspection, fill out and submit a one-page license application, and pay a fee to the city. The application is reviewed and (nearly always) approved by a Code Enforcement Officer. While there are provisions for denying or revoking rental licenses, these most often come into play when landlords fail to renew licenses, apply to rent a house without adequate parking, or exhibit other issues unrelated to safety.
One easy way for our local governments to help tenants is to strengthen this existing licensure process. Instead of leaving inspections and application review up to a lone city official, Houghton and Hancock could delegate these processes to separate individuals or bodies, and make the whole process more democratic and transparent. (Until 2019, Houghton had a Rental Housing Board which voted on licensure requests; a similar body could be reinstated). Additionally, township and/or county governments could implement similar requirements, since there is no landlord licensing process currently in place in Houghton County outside of the cities of Houghton and Hancock.
Relatedly, local municipalities could increase standards for building codes, as well as improve code enforcement. In Houghton and Hancock respectively, the same Code Enforcement Officer tasked with reviewing rental license applications is also the singular official in charge of inspecting rental properties and ensuring compliance with landlord-tenant ordinances. On top of offloading application review onto a separate entity, cities could hire additional workers to ensure that inspections are regular and thorough. They could also do a better job of interfacing with other enforcement authorities, such as the county building inspector and state health department, to ensure that rental properties are safe for their occupants.
Better yet, municipalities could require that some of the individuals involved with these enforcement mechanisms are themselves tenants, in order to counter the trend of regulatory capture by landlords and developers. One straightforward step would be for cities to make it easier for tenants and neighbors to report suspected violations to the city. Additionally, if a Rental Housing Board or similar body were reestablished, a quota could be set for renters to be represented on the board. Local residents including tenants could even be hired, permanently or seasonally, to participate in building inspections.
While currently illegal under Michigan state law, legislation is currently under consideration in Lansing to unban rent control. If the law changes, Houghton and Hancock (as well as surrounding townships) should institute strong rent control ordinances. This would maintain the Keweenaw as an affordable place for students and young working people to live, rather than increasingly funneling their money into the hands of a few large landowners.
Another contributing problem to the housing crisis in the Copper Country is the lack of new, affordable development. Many new housing projects, such as the development at 100 Pearl Street, are only affordable to a minority of the residents they hope to attract. Given the monopolistic conditions that exist in the housing market especially close to the MTU campus, students who cannot afford to live in developments like this one will have no choice but to sign leases on apartments outside of their means. Houghton’s Planning Commission (as well as similar bodies in other municipalities) ought to prioritize affordable developments instead of luxury ones, especially in areas where residents’ income is unlikely to be high. Cities could also allocate funds to their respective Housing Commissions to develop, purchase, and subsidize rents in additional affordable units.
Other, more ambitious ways for local governments to deal with impending (or already-extant) rental housing monopolies exist as well. Large landlords contributing to monopolies could be broken up, and some or all of their properties taken over by city Housing Commissions. Municipalities could pass ordinances similar to one already in place in Dollar Bay, disincentivizing absentee homeownership, encouraging owners of vacation and short-term rental properties to rent out or sell their properties to longer-term residents, and raising property taxes on those who do not. In particular, owners of vacation homes which sit vacant outside the summer months could be encouraged to rent to college students, who are typically away during the summer.
Another way to combat the local housing crisis is to provide increased transit service. A robust, reliable, and affordable transit network connecting densely populated areas of Houghton, Hancock, Chassell, Calumet, and Laurium could be established, reducing the need for MTU students to live close to campus, and for workers to live close to their workplaces. This would have the added benefit of reducing residents’ reliance on cars (a stated goal of many local developers). This would allow denser developments to be built without the need for extensive parking space, as long as local ordinances were changed accordingly.
Lastly, tenants can take things into our own hands to improve the situation. An organized body like the Keweenaw Tenants Union (KTU) allows renters to act as a political bloc, affecting change through local government or confronting landlords directly. The early stages of KTU have already created a space for Copper Country residents to engage in effective mutual aid, sharing information about local landlords and landlord/tenant law. Going forward, the group hopes to be able to organize rapid responses to illegal evictions, demonstrations against abusive landlords, and rent strikes. KTU also intends to act as a voice for tenants in local government meetings. If the prospect of organized, militant tenancy in the Keweenaw sounds off-putting to local landlords, they ought to improve conditions in their properties before their tenants feel the need to join such an organization.