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Film ed as Xerox University Microfilms 300 N orth Zoob Road A nn A rbor, M ich iga n 401 DO 75-7188 IPCAR, Charles, 1942THE RENTAL HOUSING MARKET OF A UNIVERSITY TOWN: AN ANALYSIS OF RENT DISCRIMINATION AND LANDLORD OLIGOPOLY IN EAST LANSING, MICHIGAN. Michigan State University, Ph.D., 1974 Geography Xerox University Microfilms, AnnArbor. Michigan40100 THE RENTAL HOUSING MARKET OF A UNIVERSITY TOWN i An Analysis of Rent Discrimination and Landlord Oligopoly In East Lansing, Michigan By Charles Ipcar A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Geography 1974 ABSTRACT THE RENTAL HOUSING MARKET OF A UNIVERSITY TOWN* An Analysis of Rent Discrimination and Landlord Oligopoly in East Lansing, Michigan By Charles Ipcar This study provides a comprehensive overview of the socio-economic environment of the youth community of a major university town. Specific questions ere examined relating toi 1. rent discrimination and oligopolistic control in the youth ccronunity rental housing market 2. the appropriateness of the youth ghetto analogy 3. the overall success of the indigenous social action approach in altering existing conditions The analytical techniques utilised to verify the hypotheses relat­ ing to rental price discrimination and landlord oligopoly include aulti­ pie regression and factor analysis. The analytical findings confirm that substantial rental price differentials existed and were directly related to youth-atudant household composition. It is further argued that a large portion of this differentia- represents excess profit accruing to the landlord and/or the supporting financial institutions. The structure of control in the apartment sector appeared analogous to a form of oligo­ poly. Furthermore, there were indications of rent differentials posi­ tively related to tho scale of management control. Charles Ipcar Tho youth ghetto has four Important dimensions* economic, political* psychological , and social. Thin study confined the youth ghetto analogy along Its economic dlaenoloni a complete verification of tho model re­ quires more research along other basic dimensions. Tho Probicm-S oIvor Change Model was introduced as a conceptual soheme for describing the indigenous social action portion of this study. While major phases of the model were Implemented, the social action coalition was unsuccessful In institutionalizing fundamental housing reform at the municipal level, Mare successful were those ccaponents that dealt with tho identification of major community problems their analysis, and the formulation of specific programs for change. ACKNOWLEDGMENTS I wish to express graditude to my thesis advisor, Dr. Gary Hanson, for his encouragement and criticism of this work. I also express thanks to Dr. Horvath and Dr. Hltcholl Stengel for thier continuous encouragement and constructive criticism over the past three years. Thanks are also due to Dr. Horvath for making avail­ able his own research on student distributions and landlord owner­ ship in the study area. Speacial thanks are due to the more than two hundred members of the East Lansing youth community who directly assisted in the collection and coding of research data. I would also express my thanks to those members of the Coalition for Human Survival who have worked with me in all phases of the social action program and to Nelson Brown and Margaret McNeil who campaigned to implement basic housing reforms. Finally, I wish to express my doep appreciation to my previous landlords, George and Ellen Ziegler, who helped spur my research on in a very basic way. li TABLE OP CONTENTS Pag© ACKNONLEDQtENTS ............................................... 11 LIST OP TABLES ................................................ vl LIST OP FIGURES ............................................... vili CHAPTER I. INTRODUCTION .......................................... 1 Trends in Urban Geographical Research .............. 1 A Consideration of Advocacy Research............ 8 Objectives of Study and Methods Employed ........ II. THE YOUTH GHETTO ANALOGY .............................. Conceptual Approaches to the Ghetto The Emergent Youth Community Historical Background Research Response .• 11 14 14 ........ 23 ....... ..... 24 28 Comparisons with the Classic Urban G h e t t o .......... III. HOUSING AND THE GHETTO RENTAL HOUSING MARKET ......... 34 44 Housing as a Social and Economic Commodity.......... 44 Trends in the Housing Supply System ................ 5° Oligopoly and the Rental Housing Market 57 ....... Market Separation and Rent Discrimination........... 59 IV. THE EAST LANSING YOUTH COMMUNITY ..................... 64 Housing Supply and D e m a n d ...... 65 The Spatial Diffusion of Off-Campus Students....... 69 Spatial Segmentation as a Product of GroupInteraction The Homeowner.................................... The Youth-Student Tenant ...... The Housing Entrepreneur......................... lii ?8 80 86 92 Chapter Page V. 99 DATA BASE, METHODOLOGY, AND ANALYSIS ................ Review of Related Local Research 99 The Study A r e a ......................... Sampling Design 100 .............................. Specification of Analytical Model ..... 105 Discussion of Variables.......... .•••••*•...»•■••■ 110 .............. The Base of the Rent Structure Household Characteristics Landlord Classification........... 112 122 125 Simple Correlation Matrix .... Regression Analysis 126 .... 132 The Basic Model .... The Factor Model ................................ Examination of Residuals .... 132 138 150 Summary of Analytical Results VI. 157 SOCIAL ACTION ....................................... 159 Specification of Model 160 Social Action in East Lansing ..................... 164 Reconnaissance of Goals and M e a n s ........ General Plant Research and Social Action ......... The 1973 City Council Election.................. The Social Action Experience in Retrospect ....... VII. 101 SUMMARY AND CONCLUSIONS ............................. 164 17^ 183 189 193 Rent Discrimination and Oligopolistic Control •••••• 193 The Youth Ghetto Analogy .......................... 201 The Indigenous Social Action Approach .... 203 EXPLANATORY FOOTNOTES ...................................... 207 BIBLIOGRAPHY ............................................... 21 5 Iv Page APPENDICES ..................... 230 A. Rent Survey Questionnaire B. Peripheral Route* Position Paper 233 C. Proposed City Housing Ordinances*PositionPaper ... 236 D. Sing Along With City Council ...................... 233 E. Where Were You When The Heat WentO f f ? ........ 240 F*. 10-Point Housing P r o g r a m ..................... 242 G. Where Your Rent Dollar Goes H. East Ian sing Housing Expedition.............. I. City Housing Ordinances* Point of View...••.••••••. 250 J. The East Lansing Housing Crisis* PositionPaper 251 K. Editorial Support for McNeil-Brown .... v ..... 230 ........ 24? 249 .... 253 LIST OF TABLES Table Page 1, Trends in Housing Cootsi 1960-1970 2. Households Inside SMSA*s Paying 35^ or More of Their Income in R e n t ......... 54 Comparisons between SMSA*s and Central Cities in 1970 .......... 54 4. Oligopolistic Classification ........................... 58 5. Comparative Growth between the City and HSU ....................................... 65 6. The Off-Campus Housing Marketi 1972 .................... 69 7. Control in the Apartment S e c t o r ....... 93 8. Tho Rental Housing Marketi 1972 ....... 101 9. Abbreviations Used in Tables 10 to 24 10. Stratum Ii Summary Statistics....... 11. Stratum II1 Summary Statistics...... *......... 12. Stratum Ii Correlation M a t r i x ......... 129 13. Stratum II1 Correlation M a t r i x ..... 13° 14. Stratum It The Basic Model 133 15. Stratum lit The Basic Model ................... 136 16. Stratum It Varlmax Rotation Analysis 140 17. Stratum It The Factor Mode1-A 142 18. Stratum It The Factor Moc. 'l-B.............. 142 19. Stratum lit Varlmax Rotation Analysis 146 3* .... .............. ..... vi 5^ Ill 127 . 12B Table Page 20. Stratum IIi The Factor M o d o l - A ............ 147 21. Stratum IIi The Factor Hodel-B 149 22. Comparison of Residuals 23. Stratum It The Basic Sector Model 24. Stratum lit The Basic Sector Model ............ 156 25* Chronology of Social Action 166 ...............*••••. ......................... .................... ........ vii 150 155 LIST OF FIGUHES Figure 1. Page Direction of Money Transfers in Metropolitan Detroit ............................... 19 2. Matrix of Territorial Clustering...................... 21 3. Matrix of Social Mobility within the Ghetto .••••••*........ ..................... Trends in the Consumer Price Index for Selected Housing Costs 5« 6. 7# 55 East Lansing Population C h a n g e ........................ 66 Apartment Construction by Total Assessed Valuei 1960-1970 68 Percentage Student DU'si I960 .••••••........... .....•• 71 8. Student Population/Blocki i960 ................... 72 9a Percentage Student DU*si 1965 ......................... 73 10. Student Population/Block 1 1965 ........................ 7^ 11. Percentage Student DU'bi 1970 ............. 76 12. Student Population/Block 1 1970 ........................ 77 13. Apartment Units/Block 1 1970 .......................... 79 I**-, Comparative Mean Incone 81 15. Zoning* i960 16. Zoning) 1970 ......................................... !?• Study A r e a ........... ................. ..... 95 96 102 viil Figure Page Id. Stratum It Rental House Units 106 19* Stratum lit ApartmentRentalUnit3 ........... 107 20. Rental Housing Supply Model .• 108 21. Stratum It Residuals.... ............. . .............. 152 22. Stratum H i Residuals ............................. 153 23. Problem-Solver Change Model ... ...................... 1&3 24. Applied Social A c t i o n 25. Peripheral R o u t e ..... .................... ••••• ............. ............ ix 165 176 CHAPTER I INTRODUCTION As geographers and concerned citizens, many of us find ourselves forced to re-evaluate tho relationship between the work we sot out to do and the world we set out to do it In. No longer do we feel coafortablo, as we surely did a decade or so ago, to work up a more sophisti­ cated functional classification of urban systems, a more rigorously specified distance decay function for urban interaction, or even a further articulation of classical location theory. In the 1970*s the hope Is that more humanistic concerns will achieve their rightful pri­ ority in our discipline. In the sections which follow, I review some general trends of urban geographical research in the post World War II period, examine the underlying assumptions, and formulate a new approach which combines research and social action. Trends in Urban Geographical Research In the years following World War II, geographers contlnuod to approach the exploration of the urban environment fron a regional perspective. However, it was also during this period that the domi­ nant research philosophy of the Hartshome school, described as the study of regions as unique spatial structures, was fundamentally transformed ty advances in quantitative methods which enabled a new generation of geographers to conduct research in a more systematic 1 2 fashion. Although surveys of the Methodological literature reveal that this transformation caste about only after a decade of heated debate (Burton, 19^31 Harvey, 1969) • by tho early 1960*3 geography as a disci­ pline had been brought In line with the donlnant positivist movement within other social sciences. In the analytical work which followed, urban geographers dealt with two broad questions* 1. What variables help differentiate and account for urban patterns? 2. What variables help account for the process of spatial change through time? Included in the first group were studies on internal structure, hinter­ land delineation, and functional classification of cities. In the sec­ ond group were historical studies of land use change within an urban region and the city's role as a center for the diffusion of innovation. The Initial efforts of geographers and other regional scientists to utilise quantitative methods were not unqualified successes. Although new urban classification schemes were statistically based on actual conditions, and in that sense were more reliable than previous intui­ tive schemes, It soon became clear that classification based on sta­ tistical regularity did not necessarily lead to useful insight(King, 1969). Theoretical models would have to be evolved or borrowed if the overall objective was to provide more than superficial spatial generalisation•* 3 In their search for theoretical models! one group of geographers became attracted to the work of urban social ecologists associated with the University of Chicago (Park, Burgess, and McKensloi 1929). In this approach tho structure of urban residential space, as well as land use succession, was explained by socio-economic variation within the total population, David Harvey, among others, has recently criti­ cised this approach, along with its more technically sophisticated antecedent, factorial ecology, for failing! •••to reaognlne that spatial differentiation is fundamentally geared to the production and appropriation of the social surplus, (Harvey, 1972-bi 13) While the human ecological approach represents a classic example of olrcular rationalisation of the status q u o (Boos, 1971), it has enabled geographers to document in more comprehensive fashion the degree to which socio-eoonomio variation is spatially expressed as distinct resi­ dential subregions. Other urban geographers adopted an economic approach. Basing their wocrk on the sector theory of Homer Hoyt (1939)» they specified general market factors to account for variation in urban spatial struc­ ture, Unlike the Park-Burgess approach a basic underlying mechanism was d e a r l y identified, the competitive bidding for land between urban residents who had different resources at their command. Although both approaches were eventually reconciled by recent work in factorial ecology, little if any geographical research was Initiated to further explore the social implications of spatially stratified residential eubreglono. The inpllclt assumption of geo­ graphers seeaa to have been that a high degree of social mobility existed In contemporary urban regional If Individual households chose they could Increase their inocae and then migrate to more advantageous residential space(Harvey* 1972-b* Hurst* 1973)• As urban systems began to evolve toward crisis in tho I9601a, some location school geographers, along with other regional scien­ tists, attempted to transform their findings into specific policy recommendations (Garrison £t al . 1959l Vance, I960* Berry £t ql, 19631 Prod, 196**) • Their basic reasoning appeared to bo that if certain structural inefficiences in urban systems could be corrected, conditions would return to equilibrium and aggregate savings would bo generated for society. Very few at this time questioned the legi­ timacy of the location model itself. More recently, Harvey has cri­ ticized such recommendations as shortsighted because they accept as a desired goal a return "•..to an equilibrium in which the poor still live where they can least afford to live...**(1972-a, 8). By focusing on the aggregate economy as the seasurement of economic efficiency, and ty implication social well being, urban geographers joined ranks with neo-classical welfare economists in avoiding consideration of 2 the resulting income distribution. Left unanswered was the Important question of hew the market exchange system continues to generate in­ equalities of income in spite of aggregate growth. One searches in 5 vain In the worka of William Aloneo# Kartin Beckmann, or Richard Kuth for any connidaration of how the baalo market mechanism might bo al­ tered to generate results that would Increase the welfare of low In­ come people. A similar critique con be mode of the social relevance of & sec­ ond major approach to urban geographical research which focuses on the process of spatial change. Drawing upon the diffusion innovation re­ search of tho Hagerstrand school, geographers greatly Increased the power of the basic communications model so as to replicate and pre­ dict spatial process(Brown, 19681 Berry, 1971)* Of particular Inter­ est has been the work of Richard Morrill(i965) and Harold Roae(l9?0, 1972) who have designed simulation models which describe ghetto growth within North American cities. However, while Morrill and Rose criti­ cally discuss tho social Implications of their studies and the rele­ vance of certain behavioral and environmental constraints for ghetto residents, they have advanced no overall theory which specifies the function of ghettos within the larger metropolitan system. Thus, there is continued progress in the willingness and ability of geographers to research a wide range of questions concerning the urban environment in the post Worl War II period. At the same time in­ dividual geographers were also becoming aware of the continued deterior­ ation of social conditions in that environment, and began to form In the late 1960*e a new movement of citisen scholars. 6 This new movement within the discipline can be traced back to the special session on the Status of Negroes in Geography organized at the annual meeting of the Association of American Geographers (1968)» Since then more special sessions have been organized at the annual meetings, focusing on a variety of socially relevant questions* the reports by the Detroit Geographical Expeditlon(l969» 1970* 1971); the debates on spatial injustice(l971» 1972); the discussions spon­ sored by SERGE on environmental pollution; and the presentations by Bunge, Harvey, and Hurst on "The Question of Survival"(1973)• This movement was reinforced by ihe publication of two new geographical journals, Antlpode and Field Notes, presenting critical discussion of the prevailing "value free" attitude toward research as well as substantive accounts of social action projects. In addition resource papers dealing in particular with contemporary urban problems were sponsored by the Commission on College Geography* "Social Processes In the City* Race and Urban Residential Choice" by Harold Rose(l969)» "Metropolitan Neighborhoods* Participation and Conflict over Change" by Julian Wolpert et al(l972), and "Society, the City, and the SpaceEconoray of Urbanism" by David Harvey(1972-b). Since 1968 we have also witnessed a growing number of articles, some in more established professional journals, which advocate a re­ orientation of the discipline toward humanistic concerns; most notable among the authors are William Bunge, Fred Donaldson, David Harvey, Michael Elliot Hurst, Richard Morrill, Gunnar Oloson, Julian Wolpert, 7 and Wilbur Zelinsky. Socially concerned geographers have also pub­ lished a number of major works, Bunge's comprehensive study of FitzgeraldfDetroit,(1971) is an extended case study of research and social action. Of more general interest has been The Geography of Poverty(l971) by Richard Morrill and Ernest Wohlenbergj Conflict. Power, and Politics in the Clty(l973) by Kevin Coxi and Social Jus­ tice and the City(1973) by David Harvey. Several anthologies of the resonses of geographers to current social issues have been published* Geographical Perspectives on American Poverty and Social Well Being (1973) edited by Richard Peet and Geography and Contemporary Issues (1973) edited by Melvin Albaum. The emergence of this new movement is based in part on what Harvey describes asi ...a clear disparity between the sophisticated theoretical and methodological framework which we are using and our ability to say anything really meaningful about events as they unfold around us.(l972-a# 6) Both Harvey and Hurst state that deteriorating social conditions make imperative an explicit rejection of the positivist dictum that the relevancy of scientific inquiry be judged solely on its ability to mirror reality. For example in the context of research on the ghetto housing market, is it enough that empirical weight be given to such "externalities" as racial discrimination in a regression equation? Would it not be more socially desirable if the focus of theoretical concern were on tho elimination of such discrimination as an 8 explanatory variable, that understanding gained through research lead to policy changes that alter reality to a mote socially just set of conditions? As has been suggested by geographers such as Losch, Bunge, Harvey, and Olsson, we must be more concerned with what should be than evaluating what is. A Consideration of Advocacy Research The concept of "advocacy research" has been particularly attrac­ tive to those Interested in combining research and social action. As a concept advocacy research was introduced by a small group of liberal urban planners. Their initial critical insight, put forth by Paul Davidoff in 1965, was that much of the work done by professional plan­ ners in the "public interest" was in fact a reflection of particular group interest and all too often reinforced the interest of the most powerful group. Disadvantaged groups were either ignored or given token representation in planning decisions. Advocacy planning was to help ensure thati ...all segments of society would have an equal opportunity to participate in the pluralistic contention over the setting of public policy. As blacks and other minority groups lacked financial resources to hire professional advo­ cates to represent them, they were effectively precluded from their democratic rights.(Kravitz, 1969, M ) The response to this call for advocacy planning was Impressive, both in number as well as diversity of projects. For example in a recent 9 review article Kenneth Corey observes thati Since the early 1960*s hundreds of organiza­ tions and agencies have been engaged in plan­ ning advocacy as well as advocacy activities that have required input from related fields, including architecture,geography,law,organi­ zational development,social work,and community health administration. (1972, **7) Corey classifies all planning efforts into five basic modes of advo­ cacy research, differentiated largely on the basis of the relation­ ship between planning staff and client community(1972, 52“58)» 1. inside-nondirected 2• outside-directed 3. educational 4. ideological 5. indigenous liberation The first type is largely typical of traditional professional planning agencies, where tho locus of decision making lies outside the communi­ ties affected and within an established bureaurcratic structure* direct community input is largely limited to public hearings if permitted at all. The second type represents an explicit attempt by a planning staff to reinforce a community's decision making power, essentially by offer­ ing professional services to that community; the role of the community would be to decide on planning priorities while the role of the staff would be to supply tho necessary technical expertise to transform com­ munity objectives into workable plans. The third type has as its pri­ mary responsibility the training of community people themselves to prepare plans, usually within the context of an existing planning 10 situation. In the fourth type the locus of decision making again lies within the planning staff but the staff 1b not a part of an estab­ lished bureaucracy. It views itself as opposed to the existing power structure and the client is broadly defined as society at large. Through its research and public criticism of existing conditions, the staff seeks to alter public consciousness so as to generate the political pressure necessary to bring about fundamental reform. The final type represents efforts by the community Itself, through Its awn political analysis and planning skills, to achieve as much direct control over major decision making within its territory as possible. While Corey has helped Identify a number of basic relationships between a team of change agents and a client community. I would have serious reservations about describing all five types as forms of ad­ vocacy research. The first type would seem more appropriately des­ cribed as conventional professional planning. The fourth type might be characterized as radical planning and the fifth type might be characterized as indigenous community planning. Education as training would seem to be a possible attribute to any mode of planning. Rather than extending the use of the term advocacy planning to include all approaches to community social action, I would prefer to restrict the term to those situations in which the client community representatives invite in an external team to help them resolve an immediate problem. In this way we can better focus on the strengths and weaknesses of each approach as a particular mode of social change. 11 In tho prosent study my Intention is to demonstrate a four-fold approach of cocamunity social action i one which identifies and provides greater understanding of an existing problem, proposes technical stra­ tegies for resolving It, and helps organize the political pressure required to bring about the institutionalization of needed change. Since I have been an active participant in the c camunity study area for more than three years prior to the initiation of formal research, I characterize my own role as change agent as indigenous social action. Ob.leotlves of Study and Methods Banolovod Hie analytical focus of this study is the existence of rental price discrimination and landlord oligopoly within the housing market of a large university town. Several related questions are also raised and examined. A basic conceptual question is the appropriateness of the analogy between the central city ghetto and what has come to be referred to as tho "youth ghetto." A basic methodological question io how to describe and evaluate the Impact of a social action project. In Chapter II several conceptual approaches to the ghetto ore re­ viewed and & new model proposed which more explicitly specifies factors which generate and sustain the ghetto as a territorial subsystem. Dis­ cussion then shifts to a review of research on the contemporary youth community. Finally, the youth ghotto analogy is subjected to a compara­ tive analysis and some preliminary conclusions drawn. 12 In Chapter III the theoretical basis for the questions of rental price digcrimination and landlord oligopoly is reviewed, with particu­ lar emphasis on trends in tho I960* a within the central city rental housing market* Rental housing is selected for emphasis in this study because of its economic importance as a major consumer need and because a rental housing sutmarkot is the territorial base from which a partic­ ular tenant group relates to every other aspect of tho total urban environment. In Chapter IV the particular aspects of the youth community of East Lansing, Michigan, are summarisedi changes in housing supply and demand, and tho spatial diffusion of off-campus students during tho 1960's. After the basic background information has been presented, the focus shifts to the interaction between three major interest groupsi the homeowner, the youth-student tenant, and the housing entrepreneur • In Chapter V the methodology and analytical results relevant to verifying the two major research hypotheses are presented! 1. Research Hypothesis I - if the percentage of students and other young adults In a rental unit increases, the household members will be charged higher rent. 2. Research Hypothesis II - if the total value of a landlord's holdings in the city increases, the rent charged for units under his control will tend to be higher. The general analytical model is multiple regression. The results from three specific regression models are compared* ano composed of raw 13 and transformed variables, the other two composed of standardised score* generated from a factor analysis of explanatory variables. In Chapter VI the focus ohif to to a discussion of the social change process, with particular reference to the role of change agents Involved In ccornunity social action. A conceptual nodol of social change is specified followed by a description of the social action experience In the study area. In particular the process of transform­ ing research results into political demands is described. Simultan­ eously, a description of the evolution of the social action coalition that I primarily associated myself with during the study period Is provided. Finally, Chapter VII provides a summary of results frcn the ana­ lytical research and the social action experience. Final Judgments are made on the questions of rental price discrimination and landlord oligopoly within the youth community housing nubaarket. The appropri­ ateness of the youth ghetto analogy Is assessed and the relative suc­ cess of the social action experience Is examined. Recommendation for further research and social action are proposed. CHAPTER IX THE YOUTH GHETTO ANALOGY One of tho major objectives of the present study Is to evaluate the appropriateness of the analogy between the central city ghetto and the youth cooaunlty of major university towns. Several conceptual approaches to tho ghetto ore reviewed and a new model proposed which more explicitly specifies factors which generate and sustain the ghetto as a territorial subsystem. The discussion then shifts to a review of research an the contemporary youth cornuunity. Finally, the youth ghetto analogy is subjected to a comparative analysis and some preliminary conclusions drawn. Conceptual Approaches to the Ghetto Historically, the term "ghotto" can be traced to medieval Europe whore it referred to that area of a city whore Jewish residents were territorially clustered. Lewis Wirth suggests that the social situa­ tion within such areas had evolved over three hundred years from a voluntary to an involuntary formi What the Jews had sought as a privilege, and what hitherto had been merely sanctioned by personal courtesies and custom, was soon to became a measure forced upon them. The fonts of community life that had arisen naturally and spontaneously in the course of the attempt of the Jews to adapt themselves to their sur­ roundings gradually became formalised in cus­ tom and precedent, and finally crystallized into legal enactments. (1956, 29) 15 The question of whether the term ghetto was first used to describe social situations in which territorial clustering was the preferred rather than the compelled choice of Jewish residents remains unclear. What can be expected is that all examples of territorial clustering described as ghettos in the research literature may not reflect the current negative implications of the term. From other historical studies, it is clear that the usage of the term ghetto in North American cities has been generalized to include any ethnic or racial urban enclave. In many cases the occupants of particular ghetto areas have changed over time as successive waves of new Immigrants replace previously assimilated groups. Most recently, American Blacks are the minority group which has become identified with ghetto status(Lieberson, 1963)Rather than emphasizing its ethnic or racial character, an alter­ native approach defines the ghetto as a subsystem of economic and social deprivation, i.e., an area relatively worse off than the sur­ rounding metropolitan region(Adams, 1972). Most measurements of rela­ tive deprivation begin with such basic human needs as food, shelter, and medical care. A more comprehensive definition would specify such environmental variables as neighborhood amenities, job opportunities, transportation options, and educational facilities. In such a sub­ system not only is the range of choice for satisfying human needs more restricted but the options supplied are frequently more costly and of pooror quality.^ Though the ghetto is a distinct subsystem. 16 much conceptual confusion stems from trying to account for it strictly as an isolated situation, an approach typlified by "culture of poverty" adherents Nathan Glazer and Daniel Moynlhan.^ Their critics maintain that to fully explain the ghetto situation, researchers must go beyond some set of socio-economic characteristics. Included should be the specification of a set of relationships between the ghetto and the external society. The external relationships of the ghetto are more explicitly em­ phasized in an approach advanced by William Tabb(l9?0), In Tabb's ap­ proach the ghetto is reconceptualized in terms of development econo­ mics as an internal colony. Two key relationships relevant to the questions of territorial segregation and economic discrimination are specified( 1. economic control and exploitation 2* political dependency and subjugation In defending his characterization of the ghetto as an Internal colony, Tabb argues that the spatial separation of a* ...colony and colonial power is secondary to the existence of control of the ghetto from the outside through political and economic domination. .. (1970, 2*0 Spatial separation simply makes the measurement of social and economic segmentation an easier analytical task. In more general terms, a ghetto represents an open rather than a closed system, open in the sense that there axe definite flows of information, money, goods, services, and people which permeate the subsystem's boundaries on a day to day basis. 17 The subsystem's resources, particularly its marginal labor force, are controlled and developed In large part by and for the benefit of ex­ ternal groups. Furthermore, given the trend toward industrial decen­ tralisation, the economic position of the ghetto has continued to de­ teriorate In recent years as it has become more Isolated from the major supply of low skilled jobs7 Even the income which is brought home try ghetto workers is channeled out again to meet the day to day expenses of the market distribution system; once again the ownership of ghetto residential and commercial property is generally located external to the subsystem. The spatial dimensions of the urban ghetto have attracted tho attention of geographers and other regional scientists. For example geographers have joined the debate on how best to specify the bound­ aries of the subsystemi the relative merits of "segregation indices" based on block data(Zelder, 1970), nearest neighbor analysis(Relner, 1972), or factor analysis of socio-economic varlable3(Hartshorn,l97l)* Socio-economic variation within the ghetto has been explored by Meyer (1970), Ward(l970)f and Deskins(l972). Other research has focused on the delineation of interaction patterns within the ghetto as well as between it and the surrounding metropolitan region(Deskins, 1972* Wheeler, 1966, 1969). A3 mentioned earlier, considerable attention has been focused on simulating the process of ghetto growth(Morrill, 1965* Rose, 1970, 1972). However, much of this geographical research 18 would appear vulnerable to a general criticism advanced by Hurst* Few geographers have actually gone beyond the first step of pattern identlf1cation* patterns are described and can be simulated, but it is usually beyond the competence of geographers using the ideographic or nomothetic approaches to explain them. (19?3» ^3) Two geographers stand out in having approached the study of the ghetto and associated urban problems in a manner as comprehensive as that advocated try Tabb. The first would be Will*aw Bunge, as demon­ strated in his book Fltzgeraldfl971). Utilizing the basic land use competition model, Bunge argues that deteriorating conditions in the central city slum are linked by money flows to the increasing pros­ perity of the suburbs as portrayed in Figure 1• David Harvey has also written extensively on the ghetto as a spatial subsystem. According to Harvey, the residential stratification so evident in our modern cities reflects basic Inequalities generated by the normal operation of the market economy* Stratified and market societies of necessity create the conditions for extracting and ap­ propriating the surplus product. The differ­ entially distributed access to the basic means of livelihood, the social control over scarcity, and all the concomitant institutions associated with the market exchange economy, provide the necessary conditions for the appropriation of the surplus product by those in command of the means of production. (1972-b, 6) Unlike the majority of urban geographers, Bunge and Harvey do provide an explicit overview and critique of how the ghetto functions within the total urban system. 19 DIRECTION OF MONEY IN METROPOLITAN O A K L A N TRANSF ERS DETROIT 1 D POlTIIC 50 B U R a MORTCA £ pltwowth payoff5 TRANSFER OF RENTAL PROFITS Source* Bunge, Fitzgerald. p, 13^ FIGURE 1 20 To help clarify tho discussion up to this point, I have designed a matrix which differentiates among categories of territorial cluster* Q lng(Figure 2). The three axes represent political power, economic utility, and residential mobility. The diagonal axis represents the relative ability of groups to resolve the outcomes of social transac­ tions In their favor% Cell I represents tho moat influencial cell while Coll IX represents the least influential. The horizontal axis represents the economic situation of each cell, with situations rang­ ing from beneficial to exploitative. The vertical axis represents the relative mobility of cell residents, with situations ranging from voluntary movement or residence to forced movement or residence. Each axis is further defined in terms of the locus of decision making, be­ ing subdivided into three segaentst 1. Local - a decision made by the resident group completely free of external group influence. 2. Mutual - a decision influenced jointly by both resident and external groups. 3. Exotic - a decision completely determined for the resident group by external groups. In all, nine categories of territorial clustering are generated, most of which have their real world counterparts. Each cell should be con­ ceptualized as a subsystem of the larger society, with the existence of certain dominant cells limiting the range of conditions for all others. Cell I, for example, represents a territorial unit occupied by a ruling elite, the group which largely determines the distribution of the economic surplus from the prevailing mode of production. This 21 Matrix of Territorial Clustering POLITICAL POWER ECONOMIC UTILITY Exotic Local Local II IV ELITE ENCLAVE III VII RESIDENTIAL MOBILITY VI VIII IX Exotic GHETTO FICURE 2 22 group also exercises a high degree of control over movement In or out of ltB residential space. Specific examples would Include the central city enclaves of the feudal elites of preindustrial societies and the suburban enclaves of the capitalist elites of Industrial societies. Cell DC represents the mirror image of Cell I, being a segregated and economically exploited situation occupied by the most politically im­ potent group. The key conditions are that the resident group has al­ most no influence on movement in or out of its residential space and little opportunity to improve its collective economic situation. In contrast most other external groups have considerable influence over movement in or out of this cell and economically benefit, directly or indirectly, at the expense of Cell IX residents. The classic ghetto would be one territorial expression of such a socio-economic situation, with the black ghetto of North American cities being the most recently recognized raanifestatlon. In summary,' the contemporary central city ghetto is a territorial subsystem largely occupied by groups who are socio-economically disad­ vantaged and whose prospects for achieving significant welfare gains are minimized by residential segregation and other discriminatory prac­ tices imposed by external groups. From a historical perspective, it would be recognized that the occupants of the ghetto may be an ethnic­ ally homogenous or heterogeneous social class. The occupants of a ghetto can change as a function of social processes from one period to another, especially If they can be replaced by a new groupi 23 furthermore, the spatial configuration of a particular ghetto could also change as a function of Internally and externally generated pro­ cesses. However, if an Harvey and other radical analysts suggest, the narket exchange system and its supporting institutions all function to reinforce the interests of more advantaged social groups, the ex­ istence of ghetto situations somewhere in our society could only bo eliminated by a fundamental transformation of tho entire social and economic structure. The ttam-flwnt Youth Community In the past decade a new form of territorial clustering has evolved to significant size in urban areas adjacent to major univer­ sity campuses. The residents of such areas are primarily distinguished by their youth and student status. What makes this phenomenon especi­ ally relevant to the present study is tho contention that this high degree of territorial clustering represents a segregated residential pattern and the occupants share many of the adverse conditions des­ cribed in the ghetto literature. The discussion which follows reviews the historical factors leading to the emergence of the youth community as a distinctive urban subsystem and the research response from geo­ graphers and other social analysts. Tentative conclusions are offered on the appropriateness of the youth ghetto analogy, with final conclu­ sions following a discussion of the analytical research and the social action experience. 24 Historical Background Off-oaapua youth communities are not In themselves a recent urban phenomenon. In Europe tho historical evolution can bo traced back more q than fifteen hundred years* In the United States social dichotoales between tho university oriented population and the rest of urban soci­ ety are evident in Mtown-gown** rivalries dating bock to colonial tines. Two characteristics noke present day youth communities distinctivei their sheer else and dominantly anti-establishment values. Two major trends in the American education system have made pos­ sible the emergence of the youth community as a significant spatial subsystem, Tho first has been the continued increase in the percentage of high school graduates enrolling in institutions of higher education each yeari In 1969 about 45 percent of our young adults (or close to 60 percent of the recent high school graduates) entered a degree-crodit program in a college or university, A decade ago only about one-third of the appropriate age group entered college, (Digest of Educa­ tional Statistics, 1972, 8) The second trend has been the expansion of existing educational facili­ ties to accomodate this influx of new students rather than the construc­ tion of new facilities at new locations. This trend has led in recent years to the rise of more than 60 universities with enrollments exceed­ ing 20,000 students(Digest of Educational Statistics. 1972, 85)1 a con­ siderable proportion of the more than 2 million young adults who migrate 25 to these campuses each year move out into the adjacent off-campus resi­ dential space in search of alternative houaing(Heilveil, 1973)* Off-campus youth—student settlements appear to have passed a cri­ tical threshold in the 1960*8,10 permitting tho evolution of a dis­ tinctive urban district with its own set of commercial and social In­ stitutional subsystems. Within these districts young adults reside relatively isolated from direct supervision by parents, the university, or the Municipality| this situation has helped foster experimentation with alternative life styles. The character and evolution of these youth communities, however, cannot be understood as purely a function of population growth, territorial clustering, and reduction of direct supervision. What must also be examined are the social, economic, and political factors which brought about a crystallisation of youth con­ sciousness on a national level which was radically different from that prevailing in the 1950*s. The anti-establishment character of many youth communities of the I960*e was manifested along two principal dimenslonsi alternative life style and political protest. While the general transformation of tho youth-student group was diffusing at the national level, a process of reciprocal social change was taking place between two major subgroups within the youth community, what Roazak(l968, 27-41) describes as the political radical lsatlon of the Mcultural left** and the cultural trans­ formation of the **political left,'* While it is the synthesis of these 26 two subgroups which defined the anti-establisliment character of a youth community at a particular place and time, for didactic pur­ poses they will be discussed separately below. Initially, the diffusion points for the cultural left were those off-campus areas in close proximity to existing ’’bohemian dis­ tricts" of New York and San Francisco(Krim, 1969* 16-18). In the early 1960*s exclusively youth-student bohemian districts began to coalesce around other major campuses as more and more young adults became attractive to the rock music, exotic dress styles, hallucina­ tory drug3 , and counter institutions emanating from the earlier cen­ ters. Tho diffusion process itself was expedited by mass media cov­ erage as well as the efforts of commercial enterprises to exploit the more material aspects of this movement. However, thousands of young adults actually migrated to the early centers such as HaightAshbury and Greenwich Village, absorbed elements of the new life style, and then returned' to their home towns or campuses as culture change agents(Flacks, 1971, 60-73). A great deal of the creative energy which produced the rock music, underground literature, and co-operative enterprises appears indigenous to these evolving youth communities, rather than generated from the commercial establishment of the larger society(Roszak, 1968, 33**39). The political radlcaliaation of the youth community was manifest in the increasing willingness of members to engage in direct forms of political protest at the local and national level. The origin of the 27 new political left* however, appears not to have been directly related to the growth of tho youth community. Rather, it arooe in conjunction with the direct action phase of tho Negro civil rights noveaent, rein­ forced by the rhetoric and proaileo of the New Front lor (Flacks, 1971 * 73-02) • Contingents of white liberal, students from different parts of the country Joined blacks In their struggle for basic huaan dignity, assisting with voter registration drives and a variety of social prograns in southern states as well as northern urbcn centers. The escala­ tion of the Indochina War in the I960*a was significant in considerably broadening the base of support for the new political left as sore and sore young adults found themselves facing the reality of the draft. The pro grans of the new political left were Initially acted out at regional and national sites as designated by a variety of civil rights and anti-war organisations. However, a new series of local denonatrations began to evolve'in the alddle I960*a as university author­ ities state legislators attempted to impose restrictions on the use of ths oaapus as a base for political organizing. Beginning with the Berkeley Free Speech Movement of 1964, the activities of the new poli­ tical left drew an increasingly authoritarian response fro* established Institutional authority at all levels(Heirlch, 1971* 86-94). By the end of the 1960*s repression of political dissent was no longer confined to distant and exotic places, nor was it aiaed solely at "other** people. Members of the new political left could perceive themselves as the 28 object of repressive tootles In the streets and buildings of their campuso b or In the adjacent off-campus residential space. As tho base of support for the political left Increased) nare critical attention became focused on the role of the university Itself In the perpetuation of racismf the war effort) and student alienation. 11 Thus, while Important political demonstrations, such as the 1967 narch on the Pentagon, continued to evolvo at the national level, they were becoming reinforced by local demonstrations with specific Hpmandn for institutional change. Research Responge Scholarly research initially focused on the anti-establishment character of the emerging youth-student group. Some social analysts suggested that the anti-establishment manifestations of the cultural and political loft steamed frees generational conflict and primarily resulted from moral and personal problems rather than a collective 1? response to a group situation. Others such as Paul Goodman(l960), Frledenberg(1959), and James Coleman(1961) maintained that young adults were facing increasingly evident contradictions in the larger society while experiencing a more alienated and authoritarian learning environment. As Herbert Gintis(l972) has more recently ex­ pressed it, the educational system in particular seems more geared to the production of "machine surrogates” far the use of future em­ ployers than the fostering of self-directed, integrated, and loving individuals. 29 The first research to deal directly with the question of the emerging youth community, as a community, is generally credited to John Lofland(l96?)* It was Lofland who suggested the term "youth ghetto" as an appropriate designation for these new territorially clustered subsystems. In addition to documenting the spatial sepa­ ration of the youth community, Lofland reviewed evidence that the youth-student group was assigned low status by the more established surrounding residential groups. He also summarized the dominant characteristics of the youth community residential environment as substandard and overpriced. Finally, Lofland set forth the basis for political activism by a significant portion of youth-student residents in terras of immediate local Issues and broader, fundamen­ tally challenging, societal issues(l96?, An explicit attempt to examine the political economy of the youth community is demonstrated by John and Margaret Rowntreo(l968). Their basic proposition is that the primary factor in the growing anti-establishment attitudes and activities of young adults was their own systemic exploitation rather than generational conflict or vi­ carious concern for "down-trodden others," In supporting this propo­ sition, the Rowntrees review national economic trends in the post World War II period, focusing on the transformation of a commodityproducing private economy to a government sponsored economy increas­ ingly dependent on the defense and educational industries* Both the defense and education industries are viewed as heavily dependent on 30 the exploitation of young adults who, given their lack of alternative job opportunities, find it necessary to participate. Only four geographers have focused their research attention on the emerging youth communities of the 1960*8, The first one appears to have been A.J. Krlm(i969) who wrote a provocative article which sought to explain the location of "bohoaian-anti-establlohaant"(BAE) districts in terns of conventional models of urban internal structure! the neighborhood-ghetto model and the ring-sector model. The universitystudent BAG district was portrayed as a particular variant of the more general urban BAG district of the 1950*s. Four conditions were speci­ fied by Krim as critically related to the emergence of a BAE district (1969, 20) i 1, rate of economic growth through time 2, rank of a particular city within the upper levels of the urban hierarchy 3, presence of an established intellectual community in respect to institutions of higher education a certain critical tolerance for deviant behavior within the local culture area While Krini's work remains valuable for its historical analysis of the BAG districts, his contention that there is not a political and eco­ nomic basis for their dominant anti-establishment character Is highly questionable . Ronald Horvath's exploratory research on the youth community of Bast Lansing, Michigan, was jointly stimulated by the research of 31 Lofland and Krim. His initial research(1970) confirmed that residential space in a major university town was stratified by social rank, with those of lowest status exhibiting the highest degree of terri­ torial clustering and occupying the "zone of transition'* adjacent to the commercial district and university campus. The lowest status group tended to be single, young, undergraduate, low-income, and highly transient. More established residents tended to regard this group as "socially deviant," Horvath also suggests that there was a neighborhood "tipping point" related to a 5 percent concentration per block of single undergraduates, analogous to findings from ex­ panding central city ghettos. Four key characteristics of this "youth ghetto" were set forth* 1. spatial enclave 2. subcultural traits 3• inferior status 4. lack of choice While Horvath can be credited with documenting tho reluctance of more established residents to share social space with students, he provides only brief comments on the economic and political dimen­ sions of the subsystem. Peter Kason is responsible for several articles which focus on describing the characteristics of the youth community. On the basis of his review of studies on two youth communities, Isla Vista, Cali­ fornia, and Boulder, Colorado, Kason has proposed a "youth ghetto" 32 model similar to that proposed by Horvath above. In addition to Hor­ vath's four basic elements, Mason adds "social disorganization" which is defined as a function of the high degree of transiency endemic to the youth community, the identity crisis of many young adults, and the anti-e3tabllshment activities of a small but influenctial minor­ ity (1972, 527~532). A subsequent paper by Mason(1973) focuses squarely on the question of "youth ghetto disorder" which is explained as being primarily related to spatial Isolation, cultural deviance, and tho student/non-student ratio with non-student young adults playing the key catalytic roloi Non-student, youth ghetto youth are believed to be older, more unstable and footloose, more drug dependent and thus they often tend to deprecate a community...Thus non-student presence in the youth ghetto provides less of a basis for ghetto/ non-ghetto interaction and this may ultimately contribute to an intensification of disorder, (1973. 168, 169) While Mason qualifies his conclusions as being "tentative" and re­ quiring "further testing," he has missed a more basic set of ques­ tions. What issues were raised in the 1960's that might provoke a group within the youth community to "fundamentally challenge" the social, economic, and political practices of the larger society? I would also object to the strong implication in Mason's work that "non-student" young adults manipulated the larger segment of the youth community for their own ends and that the questions they pose are categorically less legitimate than those emanating from the younger student population. 33 The geographical research of George Denko et al focused on the spatial distribution and diffusion of student demonstrations at a national level. While acknowledging the difficulty In determining what constitutes a significant demonstration, given the available data sources, the research team presented the following regional generalisationsi The northeast quadrant of the country is a focus of activity,with the states of Massachusetts,Hew York,Connecticut,Wisconsin,and Ohio standing out most sharply. California Is an outstanding focus of unrest In the western portion of the country. As a region,the sourthem and border states are of soao importance,although the ordering of the states varies considerably with the measure used. (1973»5^) Chronological trends were also Identified, Indicating an evolution in the political sophistication of demonstration demands) while the de­ mands of earlier demonstrations tended to focus on single Issues, those of later demonstrations frequently Involved complex combina­ tions of local and national concerns. In general, current geographical research has only begun to pro­ vide Insight into the emergence of the youth community as a signifi­ cant spatial subsystem, neglecting In large part the social, economic, and political basis for its anti-establishment role in the 19&0*s , With this in mind I will now compare the basic elements of the youth commun­ ity with those of the classic urban ghetto and draw some preliminary conclusions about the appropriateness of the youth ghetto analogy. Comparisons with the Classic Urban Ghetto Xn recent years university youth communities have come to be referred to as "student ghettos*1 or "youth ghettos," the former term being current among the occupants themselves, the latter pre­ ferred try academicians, Tho strength of the ghetto analogy is rein­ forced by several systemic regularities* 1, settlement process 2, proximity to a major workplace 3, residential segregation 4, economic exploitation 5, political subjugation The power of the analogy is somewhat reduced, however, by important distinctions and qualifications in each category. The settlement of the youth ghetto can be described as a two­ fold process of in-migration from distant areas followed by a high degree of intra-migration within the local housing market from year to year. 1*4- The generation of housing demand is distinctive in tho sense that indigenous natural increase plays no significant role. Furthermore, effective demand is directly regulated by an university administration; in this sense the youth community has more in common with the "company town" than the modern urban ghetto. Finally, like the immigrant ghettos of the early twentieth century North American cities, large numbers of residents migrate out each year, "melting" into the larger society; the period of ghetto experience at the 35 Individual level Is significantly shorter, in general, four years rather than a generation. If off—canpus settlement H e r e purely a function of supply and demand, mitigated by travel time from residence to workplace. He would expect the density of the youth community to gradually decrease as distance from the campus increased. Other variables are certainly in operation, some of which effect the spatial distribution of house types; other restrict the usage of neighborhood housing to particular groups. For example, there is a functional similarity between the youth community and tho university, on the one hand, and the rela­ tionship of the ghetto to the central business district on the other* Students must complete at least one journey to work a day to campus. At the same time their mode of transportation is often restricted to foot or bicycle, either by university regulation or the economic costs of procuring and maintaining a car. In the absence of an efficient mass transportation net work, this situation effectively confines stu­ dent residential space to a radius of one to two miles. The existence of a ghetto-like spatial pattern does not answer the basic question of whether territorial clustering is largely volun­ tary or involuntary. This question may be partially resolved by examin­ ing the socical interaction which takes place between tho youth community and the surrounding urban region, as well as the institutional barriers. One geographer who has examined the social trip behavior of metropoli­ tan regions found a striking similarity between a youth community and 36 a nearby black ghetto; the pattern was almost totally Internalized in either case,compared with the more random movement of the general pop­ ulation (Stutz, 1970). John Lofland and others suggest that little in­ formation is directly communicated across territorial boundaries and that few social institutions are shared on a regular basis by "youth ghettoites" and the larger community, precisely a situation conducive to the reinforcement of negative stereotypes on either side. Lofland describes the emerging stereotype in the following terms; One hears it commented that "they" are bois­ terous, they have no respect for property, they work irregularly and drive recklessly. They throw garbage out of their windows, and break bottles in the streets and on the side­ walks. They lounge in an unseemly fashion on balconies, dangle out of windows and congre­ gate in public thoroughfares...They gamble all night, fail to pay shopkeepers and land­ lords, shoplift and engage in riotous drinksprees...They let their dwellings run down, living like "animals", crowded six to seven together in small apartments. They have loose sexual.behavior and fail to keep their bodies and clothes properly scrubbed and ordered... (1967, 23-24) Community newspapers are about the only public forum in which the ridicule, fear, and scorn of the larger community reaches young adults; This country has no use for the subversive, the worshippers of vandalism or the freeloading, dope-addicted vagrant, and if it takes a certain amount of so-called "police brutality" to destroy this scum, then so it should be.(Mason, 1972, 531* quoted from a local newspaper) 37 On an institutional level public sentiment against the youth com­ munity is reflected in the enforcement of zoning ordinances which dis­ criminate against rental households composed of unrelated individuals,^ ^ noise ordinances regulating block parties, and drug related police harassment. Still, few people would maintain that the level of social discrimination experienced by young adults in university towns 1b as intense or enduring as that experienced by classic ghettoites. Even during their residency at a university, students would find the bound­ aries of the youth ghetto aore permeable than would occupants of an ethnic or racial ghettot the middle class life style of young adults can be more readily modified than can ethnic life style or skin color. Students can reasonably view their inferior social status as a tempor­ ary situation from which they could expect to escape upon terminating their student status. Economically, members of the youth community represent a low and fixod income group with a per capita income of less than $3000. Vhile a substantial portion of this income is directly derived from more well to do parents, their day to day economic situation would be more analogous to that of low income people. An important qualification is that in emergencies students can generally count on support from heme. On the other hand, job opportunities for students are generally highly competitive, low skill, and poorly paldj their academic role precludes aore than a part tine role in the labor market of a university town. 38 Those employers who do utilize student labor find themselves in a powerful bargaining position | there is always a surplus of alterna­ tive employees so that if current employees attempt to Improve work­ ing conditions they may easily be replaced. The necessity for young adults to pursue a program of higher education has been emphasized by the Howntrees who point out the inability of our economic system to provide jobs for that age group. The alternative to further school­ ing for young adults in the 1960*3 was to face unemployment rates three tines higher than for those over the age of 2k and risk becom­ ing drafted into the armed forces(l968, 163-170). It seems fair to conclude that students generally represent a low income group whose financial options in the short run are severely constrained. The youth community is also exploited by many of the same econo­ mic practices which have been described for the ghetto market place (Ankele and Sommer , 19731 Burghardt, 1972). In so far as housing goes, from accounts of rental housing conditions in major university towns such as Ann Arbor, Berkeley, Boulder, Cambridge, Davis, and Is la Vista, come consistent reports that students as a group pay more rent for crowded and dilapidated housing than do residents in surrounding urban areasf the so called "luxury" apartments that have been especially de­ veloped for the student market are notorious for high rents, overcrowd­ ing, restrictive leases, poor service and maintenance. However, the level of real estate activity in terms of resale and redevelopment 39 is considerably higher in the student ghetto, as reflected by the inflated rent structure, than in the central city ghetto. The major exception would be when the campus itself coincides with an existing central city zone of transition. Wo might expect that the restrictive income of students combined with the cyclic nature of their housing needs and the limited housing available to them as a group, would gen­ erate a classic separate market situation with the landlords in a dom­ inant bargaining position. A final question of major importance focuses on the political situation of the youth community with respect to the university, the adjacent municipality, and higher levels of governmental authority. Like traditional ghettoites the vast majority of students have been disenfranchised and have no direct access to the established political Institutions. For those concerned about social issues, the non-violent demonstration of the civil rights movement seened an effective alter­ native way of focusing collective public pressure on those in decision making positions. All too often those in authority chose to defer or ignore demonstration demands, while characterizing the mode of politi­ cal protest as inappropriate. The transformation of peaceful protest to “social disorder*' typically took place when those in authority saw no other way of dealing with dissent than resorting to force* their agents of force, the police and national guard troops, were generally inexperienced in non-violent methods of crowd control and many small peaceful demonstrations evolved to major student strikes. As the 40 anti-establishment character of the student movement became more mani­ fest, authorities at all levels recruited paid informants and under­ cover agents to more efficiently control dissent, and succeeding in the process to make the issue of “repression" a major focus of demon­ strators. The chief difference between the "social disorder" manifested in youth ghettos and central city ghettos was a matter of scale and the initial reluctance of authorities to use overtly repressive methods on studentsi in places like Berkeley and Kent State this reluctance was overcome by the end of the decade(Flacks, 1971, 90-96). Further escalation was headed off in the early 1970*s by a com­ bination of positive response at the national level and internal dis­ organization of the political left. Positive response at the national level was reflected in the gradual winding down of the war and the passage of the Age of Majority Amendment for 18 year olds in 1971* For the first time the majority of young adults were given a socially acceptable way to challenge political policy at all levels. However, in most university towns young adults still found themselves in a mi­ nority role similar to that of most ghettoites in the central cities. In those few municipalities where young adults constituted a majority of the eligible voters, coalitions of liberal and radical groups be­ gan to form and in cities such as Madison, Berkeley, and Santa Barbara have come to power. The question remains, how effectively these coali­ tions will be in implementing structural change to resolve major urban 41 problems, problems which in many instances are the logical outcome of the national socio-economic system. The same question is relevant for municipalities in which black based coalitions have recently come to power as in Atlanta, Detroit, and Newark, In summary, there seem to be important areas of overlap between the youth community and the conceptual model of the central city ghetto as described in Figure 2. Although the youth ghetto would not lie as far along the dimensions of economic exploitation, residential segregation, and political subjugation as an ethnic or racial ghetto, it seems to belong in the same general category. The chief difference is one of attitude, whether the resident group believes their situa­ tion to be a temporary or permanent one. Even in a time of Bevere eco­ nomic crisis, it seems clear that the dominant expectation of the youth-student group is to leave after a few years, secure a job, and proceed to advance in social status. In the central city ghetto only a small minority'would have Buch expectations, and given the persis­ tence of institutional racism even fewer would actually realize them in the larger society. Charles Stokes (1962) has presented a matrix model of "slums'* which helps clarify what kind of ghetto a youth ghetto might be. In his model Stokes specifies a psychological dimension, which I will substitute into my own conceptual model of a ghetto cell. In Figure 3 I have subdivided the ghetto cell and relabeled the vertical and 42 I M a tr ix of Social M o b ility II IV within the G h etto III V VI VIII VII IX %\ % \ \ \ \ \ \ Ghetto CASTE BARRIER \ Non-Escalator After Charles J. Stokes, 1962 FIGURE 3 ^3 horizontal axes after Stokesi One of these Is the psychological attitude toward the possibility of success In nerving up through the class structure by assimila­ tion or acculturation to full participation in the oconcalc and social life of the c ea­ rnunity. The other Is a measure of the soclo......... and barriers to ouch noveIf the youth community can be appropriately described as a youth ghetto as Lofland and othere would load us to believe 9 then It would be represented ty Cell IX-A, the most hopeful and potentially upwardly mobile group* CHAPTER III HOUSING AND THE GHETTO RENTAL HOUSING MARKET The symptoms of urban crisis have become increasingly evident in almost every aspect of urban life since the late I960'a* The purpose of this chapter is to focus on those manifestations which are reflected in the rental housing market, with particular attention to the situa­ tion in the central city ghetto• The discussion begins with a recon­ ceptualizat ion of housing as a multipurpose commodity whose value is set by transactions between those who live in it and those who live MoffM it. Next, I discuss the implications of the transformation of the housing supply system from a highly cocapet it ivo situation to one more characteristic of oligopoly. Finally, I discuss in more detail the economic function of residential segregation and rental price dis­ crimination as an example of what it means for particular household groups to have to live where they do. Housing as a Social and Economic Commodity For those who live in it, housing can fulfill a wide variety of needs. To begin with, the structure Itself must satisfy the essential need for shelter by meeting certain minimum standards of size and qual­ ity. In a broader sense, housing can be conceptualized as a base for neighborhood reciprocity, redistribution, and market integration.^ 45 As David Harvey(l972-a, 16) has recently described housing, "...above all it is the point from which tho user relates to every other aspect of the urban scene.M Reciprocity refers to that set of social interactions a household has on a day to day basis with other households within a locally de­ fined territory. Balanced reciprocity implies* ...the nutual exchange of goods, natorlalc, and favors among ssabers of the group with the amount of exchange being approximately equal aaong the participants.(Harvey, 1972-b, 29“30) Unbalanced reciprocity is also possible within a neighborhood environ­ ment. Its progressive form involves a redistribution of goods and ser­ vices from those who have directly to those in need. Its regressive form involves a redistribution flow reinforcing the socio-economic position of those least in need. In general it would be advantageous for a low income household to locate itself in residential space so that the outcome of social interactions was progressive. Redistribution refers to that set of goods, services, and related externalities which accrue to a residential neighborhood, and by exten­ sion to the individual household, as a function of its location within a larger urban system. Controlling factors would be the lmplioit and explicit policies of centralized decision making, both public and pri­ vate. The net effect of such territorial redistribution can also vary from progressive to regressive as a function of the social welfare priorities of centralised authority, the relative political influence of particular teritoriol units* and the ease of migratory movement betwoan territorial units. In general, it would be advantageous for any household to be able to seleot a residential neighborhood which was well serviced by the city* had good access to other centralised turban functions such as work places and retail services* and was well Insulated fron such negative aspects of urban life as industrial pol­ lution* crlne* and traffic congestion. Market integration refers more directly to the relationship of the basic residential unit to the larger economic system as repre17 seated by its "exchange Value" in the housing market• How accurately this exchange value corresponds to its "use value*" i.e.* its utility to household members as a necessary component in the life support systea* depends upon the characteristics of housing as a commodity* the operating conditions within the housing market* and the relation of the housing sector to other sectors of the national economy. The housing, market con be manipulated in various ways to Increase the financial return of the housing entrepreneur as well as that of the underlying financial institutions. In a perfectly well-ordered housing market* exchange value would equal use value. However* the validity of this assumption as a reflection of contemporary reality has recently drawn sharp criticism from several prominent economists. In a similar fashion Harvey has advanced criticism from his perspective *7 as an urban geographeri Unfortunately vit la normally ae named In economies that these values are equiva­ lent at the margin by which is noant that the purchaser or renter,in determining exchange-value,bid exactly that extra quantity of money which represents the value to his or her of obtaining an extra quantity of use value,**(l972-b, 16) Harvey advances five major reasons why he believes that contemporary housing markets deviato from a perfectly well-ordered state* (Housing) is fixed in geographical space, it changes hands Infrequently,it is a com­ modity which we cannot do without,and it is a form of stored wealth which is sub­ ject to speculative activities in the mar­ ket and the object of use by capital It­ self as a means for reaping income or for increasing capital value* In addition,the house has various forms of value to the ueor*.,(l9?2-b, 16) The net effect of these special conditions can shift the balance of bargaining power to those who deal in housing transactions on a day to day basis, providing a direct basis for excess profits from houalag investment* 19 Others have pointed to a sepcial set of real estate practices which function to ensure high rates of returns for housing entrepre­ neurs. These would Include the public policies on mortgage financing, depreciation schedules, and capital gains* The principal beneficiar­ ies of these policies are particularly those who have access to large amounts of capital rather than small housing entrepreneurs or those us who require shelter* 20 Defenders of such public policy often point to aggregate gains In the quality and quantity of tho national housing stock. However, these gains ore nost evident In the suburbs rather than the area of greatest need* the central city ghettos. Thus* Har­ vey (1973# 578) for one has suggested that the net redistributional effect of this attempt to "lure" private financial investment Into the housing sector can only be regressive under capitalism. While homoownera receive some of the same mortgage and invest­ ment benefits as housing entrepreneurs* tenants receive almost none. What tenants basically receive is possession of a dwelling unit and the right to utilise the bundle of services related to that unit for the duration of a contract. They have no legal claim to any return* or tax shelter benefit* generated from the use of that unit as an investment good. Such a situation seems particularly one-sided when mortgage financing is involved# given that the tenant's rent payments are boing used not only to cover ordinary operating expenses but also equity build-up and interest payments. Furthermore* no systematic ef­ fort is made by regulatory agencies such as the Internal Revenue Ser­ vice to ensure that normal operating expenses such as are written off as "depreciation" are actually re-invested in the structure or, alter­ natively* that rent charged reflects a decline in use value rather than accruing to the landlord as tax free income* 21 <*9 A final consideration is the way in which the housing supply system responds to changes in housing demand. In general the hous­ ing supply has been observed to be most responsive to the demand of upper income groups and less than elastic to that of lower inOp come groups. Longer terra imbalances are reinforced by the inor­ dinate time required for the production of new housing stock and the fact that once it is produced it is fixed in geographical space. Michael Stone identifies the increased Importance of mort­ gage financing as another major reason why increased housing de­ mand is not adequately translated into new housing construction. He argues that housing developers only expand operations if they can be assured that potential profits will not be wiped out by in­ creased production costs, which is precisely what happens if there is a major new demand for mortgage funds. As the mortgage market tightens up, interest rates tend to rise generating new costs that must be absorbed by the developer or passed on to the prospective householder. In this way the mortgage market can play a major role in inhibiting major new constructIon(Stone, 1972, 32-33). The net effect is to reinforce many other regressive tendencies In the en­ tire market system, mitigating against significant improvement in the housing situation for vast numbers of low and middle income tenants. Several generalizations can be drawn at this point, all of 50 which reinforce the argument that housing entrepreneurs typically find theasolves in a superior position with regard to setting ex­ change value than do householders. The conplexity of houses as a commodity also gives a coapetltlve advantage to those who are more faallar with pricing Its attributes. Major institutional policies at the Federal level reinforce the financial interests of housing inves­ tors, particularly those who operate at a large Beale. Finally, given the structure of shelter costs and the tendency of the housing supply system to remain less responsive to the needs of low and moderate in­ come groups, I would expect to find exchange values most Inflated In their rental housing markets. The precise relationship between exchange value and use value, however, depends on other Important narkot factors. In the section which follows the focus shifts to the historical trans­ formations which have been taking place in the structure of the hous­ ing supply system. Trends in the Housing Supply System The history of social interest in the housing question can be traced back hundreds of years as is evidenced by an edict issued by Count Rupert I, Paletine of the Rhine, in 1386 for the benefit of offcampus students attending the University of Heidelbergi Lest the scholars of our institution may be oppressed by the citieens, moved by avarice, through extortionate prices of lodgings, we have seen fit to...determine the price of the students* lodging.(Wieruszowski, 1966, 186) 51 However, with the exception of crisis periods such as war, depression, earthquake, fire, flood, and plague the vast majority of feudal hous­ ing law was structured to reinforce the rights' of those who had con­ trol of pro party (Will is, 1950* 5**“92), During the industrial revolution of the nineteenth century, heated debates took place among social reformers on the priority of the housing question as a basic social issue, as both the working class and the emerging middle class began to experience increased 23 economic pressure in developing urban centers,' Marxists, while recognizing the reality of the housing situation as a major social problem, ascribed it secondary importance to what was for them the more fundamental question of the exploitation of labor power directly by the capitalist class. Their argument ran that while effective hous­ ing reform might reduce exhorbltant shelter costs in the short run, the net effect in the long run would be a decrease in wages paid to workers since less money would be required to maintain them at a sub­ sistence level, with the difference accruing to the ruling class rather than the petty bourgeoisie. While the Marxian analysis remains important for understanding the failure of much housing reform legislation in the latter nine25 teenth century, and has even been resurrected by some contemporary critics of urban renewal, 26 significant changes in the structure of the housing supply system have begun to emerge in the postwar period. 52 These changes night beet be described as an Increasing institutional integration betweon housing entrepreneurs as a class and the larger capitalist system, a tendency which has been sanctioned and in many instances directly subsidised by the federal government* 27 No longor can there be identified a single major group of small competitive firms who, while functioning within a larger economic system* are directly responsible for the development and distribution of housing* In the housing construction industry there is evidence of restructur­ ing toward large scale tract development* An associated trend in the rental housing market is evident in the prevalence of large scale apartment management companles(Kuyek* 1971* 57)* Nowhere is this trans­ formation more apparent than in the critical area of housing finance* The collective power of present day mortgage lending institu­ tions is remarkable compared with the atomistic pattern of housing investment in the nineteenth century. At the end of 1970 nearly $3^0 billion of outstanding home mortgages were held by five major types of savings institutions* with a typical net increase in the mortgage debt of over $25 billion per year. About 70 percent were held by banking firms, with much of the remainder concentrated in life insur­ ance companies and employee retirement funds* Not only haB the con­ trol of housing finance become increasingly standardised but also the coordination of lobbying efforts at the state and federal levels. Their increased financial Importance has given mortgage lending 53 institutions considerable influence over many kinds of housing deci­ sions including architectural form, site plan, and prospective devel­ opment location(stone, 1972). The role of the federal and state governments has been to help expedite this process by making it more lucrative for financial in­ stitutions to invest In housing, particularly in the past 25 years. For example the policies related to mortgage insurance, secondary mortgage markets, and subsidized housing construction all utilize public revenue to attract commercial capital into the housing sector by underwriting financial risk, increasing the liquidity of mortgage investment, and subsidizing interest rates. The redistributional bene­ fits of such public policies have primarily accrued to the financial institutions rather than to those households who are most in need of adequate and low cost shelter. 28 The impact of general market trends in the 1960*8 on the hous­ ing sector is consistent with the observation that the welfare of the majority of disadvantaged urban residents has not significantly improved. Overall housing costs have escalated by 32 percent. The major components Include increases In mortgage interest rates, real estate taxes, and maintenance costs(Table l). Graphing these trends clearly reveals that inflationary escalation began in 1965* pattern which continues unabated in the 1970*s(Figure *0. The adverse conse­ quences of these trends are readily apparent in statistics from 54 TABLE 1 Trends In Housing Costsi 1960-1970 All Housing Costs ••••••............ + 31.9s£ Homeowner c h i p + 48.9& Mortgage Interest Insuranaa Property Taxes ................. Maintenance & Repair ....•••••*• + + + + 38.6^> 47.4# 63.1#* 46.5^ Fuels St Utilities + 12.5# Furnishings + 15*1^ Source* Handbook of Labor Statistics. 1972» 188-189. * Estimated since figures axe only available from 1964. TABLE 2 Households Inside SMSA's Paying 35# or More of Their Income in Rent Blacks Whites I960 1970 1960 857*146 673,191 3*355*529 30.0# 29.9# 2,139.659 18.45? 1570 Number Percentage 23.0# Source* Census of Population and Housing. 1971. TABLE 3 Comparison between SMSA* o and Central Cities in 1970 Inside SMSA's Households with Incones less than $5000 paying 35# or more in rent Central Cities Blacks Whites Blacks 829,468 2,997,593 725*162 29.05? 20.65? 29.45? Source* Census of Population and Housing. 1971. Whites 1,922,915 22.53? TRSJD3 IN THE CONSUMER PRICE INDEX FOR SELECTED HOUSING COSTS Figure 4A. Homeownership Figure 4B. Fuel and Utility Figure 4C. House Furnishing 130- 130-j 130- 120- 120- 120- 110- 110- llO-i1 100- 100- 90- . .• ■ 1965 1970 11960 . . ......... * •.. • 90-i 90n 1960 ioo4 * 1965 Source! Handbook of Labor Statistics, 1972» 288-289. 1970 I960 1965 1970 56 major metropolitan regions(3M3A,S), particularly for low income ten­ ants. In 1970 a larger percentage and number of this group were pay­ ing more than 35 percent of their income for rent than in 1960(Tablo 2). Although it has been argued by some that there have also been general improvements in the quality and quantity of the housing stock in this same period(Zelder, 1972), much of this improvement has taken place 29 outside the central city. We could further note that while rent and quality differentials between white and black households have been closing, they still persist in substantial degree oven within income classos(Table 3)» The majority of disadvantaged tenants, then, still have the dubious choice of continuing to live in substandard and over­ crowded housing or paying an excessive portion of their income for a more decent nlace to live. For the majority of black tenants, segre­ gated In central city ghettos, even this trade-off is precluded. More­ over, many of the traditional economic advantages of the central city location for low income groups have been undercut by the massive de­ centralization of residential, commercial, and Industrial development 30 within expanding metropolitan regions. What can be gained from the above brief review? There is the gen­ eral implication that today the relevance of the housing question does extend beyond that of the more equitable distribution of a major con­ sumer need, that a comprehensive analysis could provide insight into important aspects of the m o d e m capitalist economy. What remains to 57 bo explained Is how increased Institutional integration within the housing supply system can directly affact exchange value* and in this context the concept of oligopoly will be introduced and discussed below* Oligopoly and the Rental Housing Market The model of oligopoly from economics generally defines a mar­ ket situation in which there is interaction between a small number of sellers* Oligopolies may to further differentiated on the basis of type of leadership and degree of colluslon(Table **•), According to Fritz Machlup(l952), in the more highly organised and coordinated oligopolies* participating firms are better able to manipulate out­ put and exchange value to their advantage* While all firms benefit from such collusion* those firms which operate on a larger scale would benefit the most. Only then can they be assured that the eco­ nomies of large scale operation will accrue to themselves as excess profit rather than being dissipated in advertising campaigns or passed on to consumers through aggressive price competition. The critical distinction between this form of collective economic behavior and that of a monopoly is the number of major decision makers involved* Even in a highly coordinated oligopoly there is always a risk of a major fint or subgroup of firms resuming aggressive behavior if a clear advantage is perceived* In oligopoly some segment of the market* 58 TABLE I. II, III, 4 Oligopolistic Classification Completely Coordinated Oligopoly A. Syndicatedi centralized selling through a "syndicate," perhaps reinforced through pooling of revenue, B, Organizedi cartel, less tightly organized than syndi­ cates but involving agreement, explicit or only implied, about prices, quota, or other determinants of sales, Incompletely Coordinated Oligopoly A. Leadershlpi cartel without organization and agreement, based on tacit understanding and accepted leadership, resulting in concert of actions* may include also par­ tial oligopoly with quasi-polypolistic sectors, B. Cooperatlvei restraints imposed by "business ethics" and "realization of common interest," without organi­ zation, agreement, or leadership; may also include "considerate competition" and live-and—let-live policies, Uncoordinated Oligopolyi constituent firms in aggressive competition with one another as well aG those in the polypolistic sector. After Fritz Machlup, 1952, 364-365, 59 known as the polypolistio sector, can bo operated by small scale firms who have no active role in influencing price or supply| Instead, they adjust their business practices as well as they can to those of the larger firms and institutions. When the above model is applied to the urban rental housing mar­ ket, a number of special considerations come to mind. First of all the heterogeneous nature of housing as a good may make it more dif­ ficult to identify symptoms of oligopolistic controli considerably more effort must be made to control for internal variation in the product than for commodities such as steel ox* wheat. Secondly, a significant portion of an urban rental housing market Is generally operated by very small scale landlords whose node of competitive be­ havior may differ considerably from that of larger firmsj they may be more concerned with maintaining the premises, ensuring a steady but modest cash flow. 31 Finally, to complete this analysis, we have to specify in what way other institutional subsystems reinforce oli­ gopolistic control over particular segments of the rental market area such as the ghetto housing market of the central city. Market Separation and Rent Discrimination From the economic theory of the firm, we learn that it is in the interests of a monopolist, or oligopolist, to charge different prices for the same commodity if consumers can be classified into 6o distinct submarkets, with different and Independent demand curves (Hadar, 196?* 96*98)# As measured by the Paxoto Criterion, the wel­ fare Implications of this form of market behavior would be on un­ ambiguous loss to society(Hadar, 1967* 300-301)• The classic example of separate market theory Is one drawn from international trade, whore national boundaries coincide with market boundarieB(Bocker, 1957* 11*12)• Current research on the question of market segmentation suggests that an analogous situa­ tion occurs within the metropolitan housing market, where effec­ tive separation between submarkets la maintained through institu­ tional forms of ethnic and racial discrimination(Haugen and Heins, 1969)# The residential clustering of a particular group may also be a major function of proximity to a common workplace, especially when income is low relative to transportation costs# Market separa­ tion could also be reinforced by limited access to information about alternative housing submarkets# Finally, the spatial development of homogeneous residential tracts targeted for particular socio-economic groups, reinforced by zoning constraints, underlies other forms of housing market separation. In the ghetto housing market of contemporary central cities, researchers have found evidence of several forms of economic dis­ crimination# Most promInant have been the actions of mortgage and Insurance firms, functioning as a highly coordinated oligopoly, in 61 "rod lining" blighted central city areas. While tho financial insti­ tutions night justify such discriminatory policies on the basis of stability and security of investment opportunity, the direct effect is to impose higher fixed costs on the Intermediaries who supply housing to ghetto residents. 12 Certainly, much of the housing in central city areas would be classified as substandard purely on the basis of age, design, and residential environment. However, the imposition of higher fixed costs in ghettos precludes any "rational" managaent stra­ tegy other than overcrowding and minimal maintenance, precisely the set of conditions that leads to accelerated deterioration and subso­ quent abandonment of the housing stock itself. il On the demand side, ghetto residents are precisely the tenant group least able to avoid or modify the shelter costs passed on to them by the landlord intermediaries. Because of the ethnic or racial prejudice of the larger society, as reflected in the discriminatory practices of many real estate firms(Brown, 1972), alternative resi­ dential areas axe not open to them even if individuals manage to overcome discrimination in education and employment and have the in­ come to make such a move) the urban literature is replete with exam­ ples documenting the high social costs of the pioneering experience for former ghettoltes(Morrill, 1965. 3*^0- Thus, even when environ­ mental costs "justify" higher mortgage and insurance rates, the net effect is socially unjust if these higher costs are ultimately im­ posed on disadvantaged and segregated groups(Harvey, 1973* 581“582). 62 The dynamics of ghetto expansion provide another basis for the expropriation of excess profits by tho special group of real estate speculators knows as "block busters"(Rothman, 1968). The role of the block buster Is to reinforce the social and economic fears of home­ owners residing in close proximity to a ghetto, so as to induce them to sell out at bargain prices. These windfall profits become "capi­ talized" into the exchange valuo of the structure through resale to ghetto landlords, providing another "justification" for higher rent. A final question which remains to be discussed is how to distin­ guish between higher costs and excess profits. The theories of market separation and rent discrimination would both account for mark-ups in rent for ghetto tenants. However, some portion of those mark-ups, or positive rent differentials, nay well be accounted for by higher ser­ vice charges for ghetto tenants. Mitchell Stengel(l973) clarifies this question conceptually by distinguishing between two sources of rent differentials, that which cannot be rationalized by extra operating costs resulting from the uso of a rental unit by a particular tenant group and that which is not related to the location of a rental unit in a particular residential environment. In the first instance the focus is on excess profit accruing to the landlord, in the second to that accruing to the underlying financial institutions. According to Stengel it may be important to further characterize the discriminatory role of the landlords, with respect to whether they operate in several submarkets, charging different rates in each, or 63 whether they specialize In a particular sutaarkot and charge the go* ing rate. While the not effect on segregated tenant households would be the oane, higher rents for what they receive, the policy implica­ tions for the elimination of rental price discrimination would be quite different* As Stengel points out (l 973 > 27-28), reform legisla­ tion aimed at the discriminatory landlord may be futile If In fact the locus of discrimination Is at the higher institutional level| in such a situation ghetto tenants would be exploited by the normal oper­ ation of the market economy rather than by the actions of individual landlords. In summary, housing is conceptualized as a commodity which serves a mult itisle of functions, seme of which relate to the social and eco­ nomic well-being of householders and others which primarily relate to the economic interests of financial institutions and housing entre­ preneurs. The increased institutional integration of the supply aspects of housing under m o d e m capitalism, particularly those aspects which relate to the financial sector, has led to further economic pressure on low income central city tenants* The theory of oligopoly has been extended to the rental housing market and would appear to have a high degree of relevance to explaining the economic aspects of residential segregation and rental price differentials* CHAPTER IV THE EAST LANSING YOUTH COMMUNITY Tho spatial focus of the present study Is the youth ccanunity of the university town of Bast Lansing, Michigan. In the preceding chapters I have set down ny philosophical approach to urban geogra­ phical research and ny assumptions regarding tho nature of the con­ temporary central city ghetto, the youth community, and the rental housing Market. In the discussion which follows I present basic background information on the evolution and growth of a particular youth co m s unity including* 1. deaographic change in the post World War II period 2* apartment construction growth 3* spatial diffusion of off-caapus students 4. socio-economic groups and their interaction In this way I hope to demonstrate how changes in spatial form re­ flect the channeling of increased student housing demand by social, economic, and political forces. Since its founding in 1855» Michigan State University (HSU) has clearly dominated the social and economic structure of the City of Bast Lansing, while functioning as a secondary nucleus within the greater Lansing metropolitan region. Throughout its history a small proportion of students have resided off-caapus, either with their parents or in rented rooms or apartments eloseby. It was not until 64 65 the 1960*n, however, that youth-student demand for off-campus hous­ ing became sufficient to begin to transform the adjacent residential area Into a distinctive spatial subsystem, tho East Lansing youth community Housing Supply and Demand Population growth and urban development in East Lansing have largely reflected changes emanating from HSU. In the post World War II period, for example, several phases of rapid university develop­ ment took place and transformed a town of 11,000 into a city of over 50,000(Table 5)• The period of the I960*a was particularly charac­ terised by massive changes, decisively shifting the balance of TABLE 5 Comparative Growth between the City and HSU Total Residents* Non-Student Residents Student Residents HSU Fall Term fin-roTleent 1940 11,065 5»839 5,226 6,967 1950 I960 20,325 30,198 7,996 14,014 12,329 16,184 I4y996 1970 51,343 10,123 33,220 * 21,157 40,411 Residents include on-campus students. Source 1 East Lansing Planning Commission, 1971 student and non-student residents within the clty(Flgure 5) • By 1971 HSU students represented over 65 percent of the resident population. In the adjacent off-campus area the student resident population 66 East Lansing Population Change V 35.000 -i ! 30,000 -iI 1 i.000 H 25i / , 20>,000 15.000 -i I I 10.000 -| 5,000 — — i960 1950 — Student Population - - Non-Student Population FIGURE 5 i— 1970 6? expandod from 3900 In I960 to over 11,000 by 1970, In fact by 1971 It was estimated that students represented about 40 percent of tho total off-caapus resident population. 34 Increased deaand for housing off-caapus can be directly traced to changes in HSU policies with regard to enrollnont, doznitory con­ struction, residency requirements, and dormitory social rules. En­ rollnont nearly doubled in the I960*a and HSU engaged in a massive dormitory construction progran. However, the program goal was to provide for only 5° percent of the expected Increased enrollment. Presumably HSU adalnlstrators expected private housing entrepreneurs to accelerate apartment construction in order to absorb surplus de­ mand off—campus. Even then considerable policy adjustment was re­ quired by administrators from year to year to ensure that dormitor­ ies were filled to capacity, that the surplus students net off-caapus residency requirements, and that dormitory social rules were liber­ alised enough to keep pace with on-student demands for noro responsi­ bility and control over their residential environment. Prior to 1962 slngle-famlly structures constituted the majority of the off-campus housing supply. With MSU's expansion a major apart­ ment construction boom did In fact take place, generating over 3600 units In the next eight years (Figure 6) and radically transforming the residential character of several adjacent neighborhoods, Unliko the previous pattern of rental housing development, which was locally funded and small scale, much of this new construction was developed Apartaent Construction by Total Assessed Value* 1960-1970 $1,000,000 $900,000 - j $800,000 -j 1 $700,000 - j 1 $600,000 - j I $500,000 - j r $400,000 - j Major Construction Booa 1 O' 03 $300,000 -j I $200,000 -| 1 $100,000 - j 60 61 62 63 64 65 FIGURE 6 66 67 68 69 69 by statewide firms and consisted of conpiexes of one hundred units or sore contracted out to professional management companies. A related development was.the transformation of owner occupied houses to tenant occupied houses as small housing entrepreneurs made their novo to tap soae of the Increased student housing demand. By 1972 the off-caapus housing market consisted of the following sectorsi owner occupied single-family houses, single—family and du­ plex rental units, apartment units, and various types of group hous­ ing units as indicated in Table 6.^5 In 1972 apartments comprised over 60 percent of the rental dwelling units. TABLE 6 The Off-Campus Housing Market* 1972 Stock Owner Occupied Houses Tenant Occupied Houses* Apartments** Group Housing*** ■ 3626 1250 3986 761 Market Segment du's du's du's du's 39* 13* 41* 9* 9623 du's 100* * Structures with less than 3 dwelling units ** Structures with 3 or more dwelling units *** Fraternity, Sorority, or Co-op dwelling units The Spatial Diffusion of Off-Campus Students The Spatial diffusion of off-campus students changed markedly between I960 and 1970. Prom examining isoline maps based on the per­ centage of student dwelling units per block, I determined that the 30 percent isoline provided the clearest delineation of the student 70 rental sutnarkot.^ Tho 30 to 70 percent interval aeems analogous to what Harold Rose(1970# 3“7) has described as a "zone of active transition” for the black ghetto. Similarly, within the 70 percent isoline would represent the "core" of the youth casmunlty. In I960 the spatial distribution of student rental housing was largely clustered within throe blocks of campus# with the exception of a major protrusion extending north along tho central streets par­ allel to Abbott Road(Plgures 7 and 8 ). The higher lsolines of resi­ dential density reflect the distribution of fraternities# sororities# other group housing# and small apartment buildings. Owner occupied rooming houses account for the more general but moderately settled student areas. The isolated concentrations represent individual fra­ ternity# sorority# or small apartment structures# some of which functioned to spur subsequent homeowner exodus from adjacent blocks. In i960 the zone of active transition appears relatively broad in all sections# indicating a lack of active resistance from homeowner neigh­ borhood associations. By 1965 the number of off-caapus students had increased from 3900 to 7^00# filling in many portions of the i960 transition zone and generating expansion in several sections (Figures 9 and 10). Par­ ticularly rapid expansion took place along the narrow commercial strip east of Bogue Street and south of Grand River Avenue in re­ sponse to high density apartment development* A new phase of frater­ nity# sorority# and cooperative housing construction consolidated the northern and western fringes of the I960 transition zone. Further 71 CI TY OF EAST LANSING Michigan L L SsSlnsw I H* J - - " V i f J iMIcblEss si d PERCENTAGE STUDENT DU'S 1960 MSU Campus N o n -R e sid e n tia l •*m FIGURE 7 t*** 72 “ T i n r iTs\ Michigan a iiiiiiiw I ii* [r S T U D E N T P O P U L A T IO N /B L O C K 1960 1 0 0-1 3 9 M S II C om pui >139 N o n -R e s id e n tia l FIGURE 8 73 CI TY T *-~pnr,Tr. OF EAST LANSING Michigan t139 N o n - R e s i d e n t la I FIGURE 10 75 expansion north of Burchaa Drive was largely precluded by a wide zone of institutional land use consisting of parks, schools, churches, and municipal facilities | north of this zone are found higher incocae res­ idential housing, suggesting to Horvath(l970) that city planners had deliberately sought to establish a "buffer zone" between socio-econo­ mic groups. Major isolated apartment complexes were constructed along Burchaa Drive and Haslett Road which were almost immediately occupied by large numbers of student tenants. In contrast to I960, the width of the transition zone varies considerably from one sector to another. In addition to encountering institutional barriers, prospective stu­ dent tenants were beginning to encounter differential resistance from homeowners. Far example while students were rapidly occupying now res­ idential territory in the northeastern sector, their efforts to set­ tle in the adjacent Bailey neighborhood, west of Gunson Street, were firmly resisted. By 1970 the off-caapus student population had grown to over 11,000(Flgures 11 and 12). Again there is general evidence of the filling in of the former transition zona, especially in the blocks just east of Abbott Road. The only major territorial gains appear to be in the northeastern sector, resulting in the almost total encir­ clement of the Bailey Neighborhoods new settlement appears to be con­ tinuing to flow east of Hagadorm Road into blocks occupied by middle income housing. Densities continued to pile up in the developing apartment zone east of Bogue Street, with some blocks exceeding 4D0 76 CI TY OF E A S T LAWSJR1G Michigan J ASsglnsw 1 fi PERCENTAGE STUDENT DU'S 1970 MSU Campus N o n -R asld en t la l ii ** FIGURE 11 t m 77 CI TY l___ OF EAST LANSING Michigan •♦1 ,L-■ . j 1 1 i S a g i n a w \ . ;i - j [ 1 . n i t i * t t i«*. 1 TtSfcsi i S T U D E N T P O P U L A T IO N /B L O C K 1970 < 20 20-59 60 - 99 1 0 0 -1 3 9 MSU Campus >139 N on>R osfden t l a l FICUFE 12 ■i.X 76 tenants. In addition a new apartment complex was completed just south of Michigan Avenue which was almost completely occupied by students. In contrast, other apartment complexes developed north of Saginaw Highway were almost entirely occupied by non-students(Figure 13)» reinforced by a deliberate policy of discrimination against youthstudent tenants by management firms. The impact of urban redevelop­ ment in tho central commercial district adjacent to Grand River Ave­ nue is reflected by a thinning out of student residential density| many older rental structures were torn down to make way for new stores, restaurants, and parking lots. Finally, further expansion of tho tran­ sition sane appears to have been retarded in the northwestern sector and along the western edge of the Bailey Neighborhood! in the north­ western sector prospective student tenants and housing entrepreneurs encountered stiff resistance from the high income homeowners of the Glsncalm Neighborhood as reflected in a successful action for more restrictive zoning. Spatial Segmentation as a Product of Group Interaction Given the increased off-campus housing demand in the I960*a, I will now focus on the situation in Bast Lansing in the early 19?0*s. In particular I will discuss the respective roles of homeowners, ten­ ants, and housing entrepreneurs in determining the spatial form of the youth community rental housing market. The Interactions of these groups will be considered along social, economic, and political dimensions. 79 CI TY ■nr.TO OF EAST LANSING Michigan J | I n ■w I - o L , u » ittu ' I *- iMIch l i n j f i i i ' M Y'm .s.u. >M I** 1 M O Ii il .iL-ka,.-- } rr ‘.u J A P A R T M E N T U N IT S /B L O C K : 1 9 7 0 1 0 0 -1 3 9 I MSU Campus >139 N o n - R esidential FIGURE 13 80 Much of tho residential territory presently occupied by youthstudent tenants was until quite recently occupied by honeownere. Such rapid residential transition appears quite do l l a r In form to the pro** c o b s described as Minvasion and succession" along the expanding mar­ gins of central city ghettos* with the students being perceived as the invading group. There are several reasons why homeowners and prospective hone owners night tend to view tho youth ccmn unity as an undesirable place to reside in or near* based on tholr relative socio­ economic positions and concom for reinforcing their own respective interests. The Homeowner Kast Lansing homeowners would generally be classified as well to do in terms of income and social rank. In 1970* for example* family mean income was reported to be $1?,400 In census tracts south of Sag­ inaw Highway* which inolude the youth community| north of saglnaw High** way family Income was even higher (Figure 1*0. in contrast the Income of students and other young adults was considerably more modest* even when aggregated to the average household level* From an occupational perspective* Bat Lansing homeowners can be classified Into three major groups. Many would be associated with HSU as senior faculty and admin­ istrative personnel, A second group would inolude other professional personnel* state officials* retail and Industrial management personnel, A final group would be composed of retired senior citizens* many of whan live on more modest Incomes. 81 38.02 CITY OF EAST L A N S IN G jj^l^ I"| i«t* »*Vn-* J' 3 8 0 ^ i 39.6 t ft I life ;* * C O M P A R A T IV E MEAN INCOME U n related I n d iv id u a ls F a m ily H o u s e h o ld s Income N Limber 465 $9,122 $19,015 466 $7,993 55 324 39.01 $37,550 247 $10,338 38 39.02 $19,610 969 $3,424 1148 40.00 $20,270 967 $4,303 768 o o . 3 $12.53** 406 $2,138 3963 43.00 $14,105 1075 $2,393 3060 forth of M-78 $24,267 1178 $8,360 417 South of M-78 $17,400 3417 $2,300 9940 Census Tract Income 38.01 ■ $22,474 38.02 Number A**re*ated Sourcei 1970 U.S. Census FIGURE 14 82 It io not surprising that aany homeowners view prospective youthstudent neighbors with deep misgivings. Host social groups would pre­ fer to.live in a residential environment where everyday life is pri­ marily a "value-reinforcing experience" rather than primarily a Hvaluealtering experience"(Downs, 1968, 1338). Moreover, as the socio-economic status of groups in our sooiety increases there is a tendency for mem­ bers to regard the value-reinforcing experience as an absolute privllege. 39 In this sense the presence of youth-student tenants in a tradi­ tional family residential neighborhood can be perceived as noxious and even threatening. In particular those families with young children are apt to worry about "deviant" social behavior, increased traffic flow, and reluctance of other families with children to settle nearby. Be­ cause housing represents a considerable investment, other homeowners would be equally concerned about what they think will be the inevit­ able physical deterioration of the residential environment. Further­ more, given their turnover in East Lansing, only UO percent of tho so called "permanent residents" were still living at their same address after five yearn(1970 U.S. Census), it is not surprising that many homeowners would be concerned about maintaining the exchange value of their property. There have been no systematic surveys conducted in the city to establish the validity of a negative stereotype for most youth-student neighbors. However, according to reconnalssaaoe reports gathered 63 by tho City Planning Dopartaent(l97l) fron a variety of sources, pre­ dominantly student oocuplod blocks tended to have higher noise levels, later hours of activity , win Inal lawn care, and parking pr obi can. The Planning Do portaent also suggested that the conversion of owner occu­ pied housing Into rental housing often led to accelerated deterioration of the structure and yard(l965 and 1971)• What Is not so clear is the general validity of a causal relationship between student occupoace and housing deterioration. Housing n&lntenance is probably better con­ ceptualised as a Joint function of the type and quality of services provided by the landlord as well as the attitude and resources of the tenants. Still, while individual homeowners night sake similar dis­ tinctions between the locus of responsibility for housing deteriora­ tion, the net negative residential Impact remains the same. Homeowners In Kast Lansing have demonstrated three alternative strategies for dealing with Incipient student Invasion of thelx neigh­ borhoods, sometimes shifting from one strategy to another as percep­ tions or conditions have changed) these include peaceful coexistence, resistance, and exodus* Peaceful coexistence aeans that the homeowner accepts neighboring student tenants as a new group of block residents who are entitled to share social space on a day to day basis. Such an attitude may lead to a whole series of reciprocal transactions through­ out the year, from borrowing basic tools to collectively confronting external threats to the quality of the neighborhood environsoat, 1* e., 8*4- a new road construction projects or coonoreial rezoning dispute. Al­ though peaceful coexistence nay be nore typical of younger homo ownora. it has been aanifestod on occasion by older, nore established groups, particularly when the neighborhood seened threatened by city redevelopaent plans. Resistance takes nany forns and nay lead to an escalation of dis­ criminatory acts from both sides. As Horvath points out. resistance begins to crystallize as neighborhood gossip starts to project nega­ tive stereotypes of student social behaviori There was the one about the students who novod next door to Widow Jones on the next street over, already 60 per cent student.Changee began immedi­ ately t nany parties ensued, loud nuolc destroyed the former nocturnal serenity, a street full of cars congested the view on weekends.beer cans be­ gan appearing in the yards, young girls slithered out of the house early in the morning.Quite obvi­ ously drugs were being used at these partiest con­ cluded the widow. The police were called, a raid followed, but no drugs were found* men and women all over 21 were only drinking. So the story goes. Mrs. Jones woke up tho next morning to find her tires slit and sugar in her gas tank.(1970* 12) The next stage of resistance involves direct complaints to tenants about observed instances of non-conforming behavior, which can easily escalate to formal complaints registered with the police and other city departments. For instance, some homeowners have checked zoning codes to determine if a particular rental house conforms to the sec­ tion regulating the maximum number of unrelated tenants for particu­ lar areas of the cltyi if there are too many such tenants in a house 85 pressure can bo focused, on the City and the landlord to evict at least an sone of then. In Its moot organized fora resistance involvoo the form­ ation of a homeowners association. In the past a major function of such groups has been to lobby for stronger anti-tenant ordinances at city meetings. For example in 1970 the Bailey Homeowners Association peti­ tioned City Council toi ...enact without delay ordinances that will halt further proliferation of rooming houses and help restore the family residential char­ acter of deteriorating neighborhoods. (Towno Courier. November 9» 1971) Other functions of such groups have included support for city council candidates sympathetic to their concerns, recruitment of new homeown­ ers to replace those who must leave, and repurchasing property from absentee landlords. The third response, exodus, may take place at any tine depending upon the perceived student threat to individual homeowners and the alternative housing situations available. The decision making process of one recently resettled homeowner was described by a local newspaper in the following termst In his old neighborhood in East Lansing he tried to get sidewalks installed. He went around to his neighbors with a petition, but there were so many absentee landlords he couldn't get enough signatures. At this point, he noted, "We saw the writing on the wall." (Towns Courier. November 9,1971) Not all homeowners would have the financial resources or energy to make such a move to a new suburban subdivision, especially older senior 86 citisene, Like their counterparts in the central city ghetto they fre­ quently find themselves left behind as younger families flee the en­ croaching youth coomunity. Same housing entrepreneurs specialise in reinforcing homeowner fears of student tenants for their own economic gain, employing a variety of conventional "block buetlng" techniques. Homeowners have reported being harasnod by letters, telephone calls, and even agents on thelx doorsteps. What they are told are more stories about student anti-social behavior and how real estate values in their neighborhood will be dropping fast. Once a house Is sold it is rapidly transformed into rental property, orammed with tenants, and then cited as more evidence of "imminent invasion" to more recalcitrant homeownerst one enterprising realtor actually moved in an aspiring rock band I As in the central city ghetto the principal beneficiary of this self-fulfilling prophecy is the housing entrepreneur. He generally obtains well main­ tained houses at low prices and then resells them to full time land­ lords for windfall profits. The Yottth-gtudent Tenant The housing expectations of the youth-student group differ con­ siderably from those of most homeowners. Basically, they Include shel­ ter, housing services, and some privacy, all at modest individual cost. In order to achieve these objectives they often put up with overcrowded and substandard housing conditions, stringent and often illegal lease 87 provisions, and high collective rents that would outrage more mature tenants* In contrast to East Lansing homeowners* moat student house­ holds would ha characterised as low or moderate income. For example in 1970 the average off-campus income of unrelated Individuals lo­ cated south of Saginaw Highway was $2300(Figure 14-) ( when aggregated to the household level this would mean $5520 for those occupying tho average apartment and $9430 for those occupying the average rental house. From this income came major fixed expenses such as tuition* housing* food* and transportation. Housing alone consumed from 3° to 40 percent of tenant income} in the census tracts south of Saginaw Highway over 84 percent of the tenant households earning less than $5000 paid 35 percent or more of their income for rent(1970 U.S. Cen­ sus). Such a situation compares closely to that of low income central city tenants. While student tenants generally come from middle and upper-middle income families, their everyday economic situation would appear to bo considerably more spartan. Students are a highly transient tenant group and there are sev­ eral basic reasons for this characteristic. First of a-ii many return home during the summer season for vacation or for procuring full time jobs. Second* students often move during the school year in the hopes of finding a better housing situation* either in terms of new house­ hold members or improved rental conditions. According to ay own field research over 80 percent of all tenants in the study area resided at a particular address for less than one year* for both apartments and 88 rental houses. Such a pattern of settlement behavior might be expected to mitigate against the establishment of traditional neighborhood social ties, much to the frustration of longer term residents who find them­ selves dealing with new youth-student tenant households each year. Al­ though youth-student tenants tend to be individually transient on an annual basisp they often spend three to four years off-campus and can become socially raoponslvo to their own collective needs as well as sensitive to those of others as will be described in part in Chapter VI. In the long runv of course, the impact of the so called "transient element" persists am part of an evolving social process long after the participation of individual members. Student tenantB who wish to rent housing off-campus have several alternatives open to them. The vast majority move into high priced apartments, forming a collective household groupt for example, by pooling their incomes a typical group of four could pay up to $300 per month for a relatively new two-bedroom apartment, A second alter­ native was to join a housing cooperative, a strategy which lowers in­ dividual costs through large scale food purchasing and by eliminating cash flow profits to an external landlord, A somewhat more expensive alternative to co-ops has been the group housing situation offered by fraternities and sororities, in which membership fees are added to basic room and board. Many young tenants have found older rental houses the most satisfactory alternative, both in terms of modest Individual costs and more direct control over the immediate residential spacei 89 for exaaple in recent years a group of six students could generally rent an old eight-room house for about $360 per month, obtaining more privacy and apace at leas cost than they could expect to find in an apartment or group housing situation. Finally, there were student tenants, generally older or married, who moved out of East Lansing altogether into the greater Lansing metropolitan region, trading off higher transportation costs for lower rents. Much to the annoyance of many homeowners, students tend to place a higher priority on their day to day educational and social activi­ ties than they do on maintaining high standards of property upkeep. Such behavior is not surprising considering their low income and high degree of transiency from year to year. As Lofland points out in de­ fense of Myouth ghettoltesM t Middle class people are insufficiently apprecia­ tive of the very high total cost of the tools and machines, paint, repair materials and fur­ nishings necessary to the rehabilitation and maintenance of a "respectable" household,(196?, 3*0 Moreover, if there is animosity between the tenants and their landlord they are even less likely to be willing to Invest time and effort in maintaining the premises. In spite of the dominant student stereotype, students are not all alike nor are they treated in a uniform fashion in their dealings with the operators of the rental housing market, Horvath(l9?0) suggests that many landlords classify them into subgroups which progressively shade 90 into the non-student population in terras of social acceptability. Least desirable would be the more "hip" looking single undergraduates, especially if the prospective household were composed of both males and females. Single graudAte students would come next in order follow­ ed by married couples or married couples with children. Horvath pre­ sents evidence that these social status categories are reflected by distinctive settlement patterns* the least desirable groups cluster within what has been described as the core area of the youth commun­ ity (Figure 11) while the more preferred groups are randonly dispersed throughout the general city rental housing market. Faced with this typo oi’ housing discrimination, it is not surprising to find that some students become quite adept at role playing, passing themselves off as more respectable prospective tenants. Tho anti-establishment political character of the youth commun­ ity has been emphasized by many researchers as a key differentiating characteristic of pbuthnStudent settlements in the I960*s. During this decade, student political activism appears to have evolved in classic fashion in East Lansing. Like in many other youth communities, the radical youth movement was initiated by groups concerned with the Negro Civil Rights Movement, was reinforced by a series of academic freedom cases and tho growth of the political and cultural left, and became a mass movement by the end of the decade primarily organised around Issues relating to the Indochina War. The form of political dis­ sent, initially characterized by tactics of non-violent confrontation. 91 often provoked an authoritarian response from those in established decision making positions* which in turn led to an escalation in tac— tics by both sides. These events in turn helped shape the attitudes of Interacting groups sharing social space in the off-campus resi­ dential areas* with a longer terra effect on the non-student resident i±,p population. In terns of conventional electoral politico* students had lit­ tle influence over decision naking at the municipal level during the 1960*0. To begin with the vast majority were precluded from register­ ing to vote because of their age and student status. Secondly* there was an extremely high turnover in those students who did meet city residency criteria* naking it impossible to form enduring political coalitions. After the passage of the Age of Majority Amendment for 18 year olds in the spring of 1971 and related State Supreme Court rul­ ings permitting students to register to vote where they attended school* the political balance of power shifted decisively in favor of studentst by 1972 students made up more than 65 percent of the registered electorate(City Clerk and 1970 U.S. Census). In the 1970's* then* it is clear that youth community residents had the opportunity to fundament­ ally change their traditional politically subordinate role so as to alter the redistributional effects of municipal policies to better meet their own collective needs. Still* there were many problems Involved in organising a liberal voting bloc from this electorate as will be dis­ cussed in greater detail in Chapter VI. 92 The Housing Entrepreneur Unlike the homeowner and the tenant, the primary motivation of the housing entrepreneur Is to generate profit from housing invest­ ment. Landlords have four bailc ways of generating profita( b o g also Chapter III). First, they stay specialise In real estate speculation, reaping profits by the manipulation of exchange value ) Mblock bust­ ing is the most obvious example of this type of behavior but a more common form involves the reselling of properties every few years. Second, they may rent out heavily mortgaged property and generate return in the form of cash flow and equity payment*. Third, they can always take advantage of the various real estate tax shelters such as writing off depreciation and Interest payments, not to mention the capital gains status of profits from re sal* of property. Finally, they can generate profit as Increased cash flow through reduced main­ tenance# Landlords ore less concerned with high maintenance standards than are homeowners, except to keep up with existing city code enforce­ ment) nor are they apt to be concerned about the general well being of their tenants, except for particular contract obligations. Landlords in East Lansing may be dlvldod Into two basic groupsi those who rent older houses and those who rent apartment buildings. From Table 6, it is apparent that the vast majority of rental units are found in the apartment sector. The structure of control in these two sectors is strikingly different) less than 50 firms operate In the apartment sector while more than 700 firms and individuals operate in 93 the rental house sector. An even higher degree of centralized control within tho apartment sector la Implied by Table 7 1 hy 1972 I was able to estimate that over 50 percent of the apartment units were controlled by only eight Management firms. Such a situation uould appear highly TABLE 7 Control in the Apartment Sector No. of Firms Market Segment Total Units Total Tenants 3 8 i*f 31% 5336 6556 1230 2115 2610 3000 5100 6300 conducive to the kind of informal price fixing characteristic of market oligopoly. The rental house sector remains considerably more decentra­ lized in structure, with over 60 percent of the units controlled by landlords who only own one house in the city; this sector represents only 21 percent of the total off-campus rental housing market. Within each sector Individual landlords and apartment managers tend to specialize in terms of what tenant groups they will rent to. As is apparent from a comparison of Figure 12 and 13* much of the apart­ ment housing north of Saginaw Highway is occupied by non-students, one explanatory factor being an explicitly discriminatory renting policy with respect to younger unrelated tenant households. In Chapter V evi­ dence will be presented documenting the existing of a separate youth community rental housing market south of Saginaw Highway, within which the youth-student group is charged higher rents for units similar to those rented by non-student tenants. 9b With regard to municipal politics the larger housing entrepreneaurs have an influence on policy formulation far out of proportion to their numbers. In the late 1960*s, for example* the City Counoil and city commissions were largely composed of builders* realtors* h.'i and related businessmen. Conpared with the homeowners and tenants* the housing entrepreneurs were considerably more experienced in deal­ ing with the market economy to their collective advantage* being able to more accurately forecast the redistributional effects of policy changes. Prior to the 1960*3 their impact was even more apparent as reflected in a number of "spot rezoning" decisions* permitting random apartment construction within older residential areas. In established apartment areas the high densities permitted under an earlier zoning classification, R-4, generated traffic and trash collection problems which the city still has been unable to solve satisfactorilyt east of Bogue Street* for example* zoning permitted apartment construction at densities exceeding U0 units per acre. Toward the end of the I960'a, homeowners were able to generate enough political pressure to put a stop to the more blatant spot zoning decisions and establish a new set of more restrictive medium density apartment zones* which in the case of the R-6 zone permitted no more than 12 units per acre. Homeowners adjacent to the northwestern flank of the youth community were also successful in changing their duplex zoning classification down to single-family. However, If we compare Figures 15 and 16 it is clear that overall zoning changes have been relatively minor since I960* with 95 CI TY OF EAST LANSING Michigan *»tM* I M .S .U Z O N IN G : 1960 A gricultural Single-Fam ily Duplex A partm ent 3 MSU Campus Business N on - Re s i d e n t i a l FIGURE 15 96 CI TY OF EAST LANSING Michigan BB W M.S.U Z O N IN G : 197 0 A gricultural Single-Fam ily Duplex MSU Apartm ent Business Campus N o n -R o s id o n tia l FIGURE 16 97 the exception of those related to accelerated development north of Saginaw Highway. In particular It is clear that tho spatial distribu­ tion of rental housing south of Saginaw Highway has been basically set by an earlier series of zoning decisions cade by housing entre­ preneurs and related businessmen. In Chapter VII I discuss further more recent attenpts by hcaeownersf tenants* and housing entrepre­ neurs to Influence city development policy. In nunnery* the following pioture merges of East Lansing's youth community from i960 to the early 1970's. First* it has been predominantly occupied by students and other young adults whose life style and eaonomic resources differ markedly from those of older middle and upper-middle income residents. The youth community popu­ lation tends to be low income* unmarried, highly transient from year to year* and their social behavior exemplifies many of the antlestabllahment values which have been described for the political and cultural left. For much of its brief history the youth community has been politically excluded from participating in the conventional de­ cision making process at the municipal level, primarily because of age and student status of Its dominant resident population. Second* the housing stock of East Lansing has been composed of three major types. High density apartment complexes have emerged as the predomin­ ant rental alternative* most having been constructed within the last ten years and distributed in linear zones adjacent to major traffio 98 arteries• Older rental houses still form a significant portion of the housing markett with structures being intensely utilised and showing signs of accelerated deterioration. Finally, group housing represents the third major alternative to the off-compirn tenant population in the fora of fraternities, sororitieB, and cooperatives. Third, the youth community appears to form a distinctive housing submarket. It con be territorially defined within a broad contiguous area with fairly sharp boundaries! beyond these boundaries most apartment complexes ore only marginally occupied by students. The structure of market control re— veals that tho vast majority of rental units are centralized in a fashion characteristic of oligopoly. In the following chapter the basic structure of the youth community rental housing market is ana­ lyzed in greater detail. CHAPTER V DATA BADS, METHODOLOGY, AND ANALYSIS Tho questions of rental price discrimination end. landlord oligo­ poly within the youth community housing market of Bast Lansing are the analytical focus of the present study. In the first oootion of this chapter related housing research in the Lansing metropolitan region Is briefly reviewed. In the second section the basis far saaple design and questionnaire femulation is discussed. The next sec­ tion includes a sore detailed discussion of the analytical model and the relevant sets of explanatory variables. Finally, the analytical results from three alternative multiple regression models are compared and eonelusions drawn with regard to the resoaroh hypotheses. Review of Related Local Research Tho 1970 Census of Housing indicates that household rents in Bast Lansing were about 25 percent higher for all classes of housing than in the neighboring City of Lansing, even after "group housing" situations had been deleted from the summary statistics. Such rela­ tively high rents were even more apparent in a survey conducted by the Michigan State Housing Develop*ent Authority in 19711 after com­ paring Bast Lansing’s dominant rental unit, two-bedroom apartments, with those in all surrounding communities a difference of mare than tOi. 30 percent was reported. Both of the above surveys also confirmed 99 100 that vacancy rates In East Lansing were critically low, especially so kc in census tracts predominantly occupied by student tenants* J Finally* a special report issued by a select city housing committee baaed on data collected by the City Planning Departs ont and on public testi­ mony concluded that a shortage of low inc o h o housing was a key prob­ lem area whloh frustrated the needs of students, young families, and the elderly* In general, then, 1 found prellninary indications that rental housing in East Lansing was relatively expensive, scarce, and especially so in areas of the city predominantly occupied by the youth**student tenant group* The Study Area The boundaries of the study area were set to Include that por­ tion of the city rental housing market which was predominantly occu­ pied by off-campus students and other young adults in 1970, while also aaking efforts to ensure that a sufficient number of older nonstudents were included so that valid comparisons in rent could be made between tenant subgroups* The else of the rental housing market was primarily determined from three data sourcest the 1970 U.S. Census, the City Assessor's Office, and the City Planning Department* From these sources, supple­ mented by my own pilot survey, I was able to estimate that some 6000 rental units were present in the off-campus residential area in the spring of 1972| these are categorized in Table 6. 101 TABLE 8 The Rental Housing Marketi 1972 Number Houses* Apartments** Group Housing*** Market Segment 1250 du*s 3986 du's 761 du's 21/6 66?S 13% 5997 du's 1005? * Structures with less than 3 dwelling units ** Structures with 3 or more dwelling unitB *** Fraternity,Sorority,or Co-op dwelling units The distribution of student rental units was determined by plot­ ting data from the 1970 HSU Student Directory* as shown In Figure 12 and Figure 13* The boundaries of tho resultant study area are shown In Figure 17* The northern boundary is defined by Saginaw Highway (M-78), the western boundary coincides with the city limits, the southern boundary parallels tho MSU Cam .s, and the eastern boundary LA runs roughly two blocks east of Hagadom Road. Within these boun­ daries are found over 75 percent of tho private rental housing market and over 95 percent of the off-campus student tenants residing In the city. Sampling Design The first step in establishing a sample design was to conduct a pilot survey of the city rental housing market. In the process I was able to gain experience in questionnaire design, interviewing tech­ niques, and modes of empirical analysis. In order to gather the widest 10Z CITY O F E A S T L A N S IN G Michigan } FIGURE 17 | STUDY AR E A 103 range of possible variation In rental situations, this pilot study focused exclusively on rental units In houses* while ypartaont units sake up the douinant segnent of the rental housing narket it seemed reasonable to assume that the unite themselves would bo at least physically more hoaeogenoous than those in houses* Altogether, some 270 rental houses were surveyed in the 1970-71 academic year and lyj the resulting data subjected to regression analysis* The second step in sampling design was to divide rental units in the study area into two strata on the basis of structural type* Stratum I represents units in structures with less than three rental units and Stratus II represents units in structures with three or ■ore rental units* The total number of rental units in each stratum is as follows* Stratus I - 1128 du's Stratum II - 2753 du's This division solves two purposes* First of all, as mentioned above, it seems reasonable to assume that the variation of data parameters within these sectors would be substantially different, with the apart­ ment sector being more homogeneous* By separating the 3tudy area rent­ al units into these two strata, the overall sampling design could be more efficient in terms of size* Secondly, given my interest in the question of oligopolistic control, X felt that some attempt should be made to form stratum which represented distinctly different compe­ titive market situations. As I have polntod out in previous discussion. 10*4- economic control within the apartment sector is considerably more centralized than within the rental house sector* The sample size required for each stratum was estimated from the following standard equation* where e N n s Z *= ” - tolerable error target population sample size standard deviation confidence interval. The estimation of *'s" was based on the standard deviation of monthly contract rent from the pilot studyj "e" was based on the standard er­ ror of the estimated residuals from a regression analysis of that same study* The confidence interval was set at tho *05 significance level* For Stratum I a minimum sample of 123 was requiredj sample size was actually increased to 175 so as to help ensure that several important explanatory variables would meet the confidence limits. The sample size for Stratum II was similarly based on the parameters of the pilot study, assuming for reasons discussed above that they would represent conservative estimations of tho respective apartment para­ meters. Sample size was further reduced by conservatively estimating that at least two thirds of the rental units were Identical, given the great degree of replication of rental conditions within major apartment complexes. The minimum sample 3ize for Stratum II was cal­ culated to be 120. Each rental unit in the two samples was given a unique number, so as to ensure an equal chance of being drawn from a table of random 105 nunbora. In Stratum I tho numbers represented a particular rental unit in a housef beginning with the lowest numbered U.S. Census Block in the study aroa. Similarly, in Stratum II the numbers represented a particu­ lar rental unit in an apartment structure. The 19?2 spring rental hous­ ing survey produced 161 usable questionnaires for Stratum I and 116 usable questionnaires for Stratum II* the sample locations are distri­ buted respectively in Figures 18 and 19* The questionnaire fora used in the survey is presented in Appendix A. Specification of Analytical Model The analytical model that was used to account for the variation in rent is represented by a housing supply model of standard form Y - a + b. X. •••+b .X . + b X + b X + e 1 1 m-1 m-l mm n n where Y defines the total monthly rent charged for the unit supplied by the landlord, MaM is the Intercept value» the Mbas" are the regression coefficients of the relevant nets of explanatory variables as estimated by least-squares technique, and "o" is the randan disturbance) the comJiQ ponents of this model are depicted in Figure 20* The first set of variables, to t estimates what has been previously described as the use value of a rental unit, what the landlord supplies to the tenant household in the leasehold agreement as well as associated neighborhood externalities* The use value of a particular rental unit may be further classified Into three variable subgroups. The first subgroup describes 106 - -p.-rr.7T-. Michigan Illwm □ L.1 S T R A T U M I: House R e n ta l Units M5U Campus Non- Residential FIGURE 18 Crtu*i*1 C t- F 107 -— a CI TY OF EAST LANSING Michigan Ssglnsw \ Hr/WMiitL i S T R A T U M I I : A p a r t m e n t R e n t a l U nits MSU Cam pus N o n -R e s id e n tia l FIGURE 19 Rental Housing Supply Model INDICATOR: USE VALUE DISCRIMINATION OLIGOPOLY WELLING UNIT CONTRACT TYPE OP HOUSEHOLD SERVICES *■< i;0. of Bmoo lo . o f Botha, Floor A m CU Tolua 1 DU Toloo 2 Honao typa Lot A m S tx u e tm Ac* Hoot n tc E lo e trlc ltr Goa Stova B ffr lp n ta r F u n lto ra A ir Ccodltieoor Kao. -1 J r. Ato , I w , BIX How. Qool. BIX B M tol DU'S BIX S t. S tn e , HSU Dlatooea Uodorsrodaotaa A ll S todttta ro .16 .17 | 6 l .52 ,65 ,32 . 29 .26 .35 .15 .19 .27 ■.26 J6£ -.2 6 -.2 1 -.1 7 5 & -.3 V .2 6 -.3 0 -.2 5 • 10 ,19 .22 .28 ,23 .30 .60 .63 .5 6 -.1 6 ,2 8 -.2 6 “ -.2 J *5^ * 61 .26 .16 -.2 9 ,25 .21 ,26 ,26 .31 .38 .65 .50 *.1 8 .1 7 -.2 7 .18 .18 .63 29 .25 .15 71 .60 ,26 ,20 . 26 .19 .31 .66 .67 .55 .2T -.33 .20 .20 .65 62 .26 .25 .15 .15 . 05-.15 .16 .18 .31 -.2 3 .19 .26 .19 .16 -.1 7 .25 33 .61 .31-.32 .3 0 -.1 7 -.2 3 -.1 5 -.1 9 -.1 7 -.2 8 -.6 3 -.6 5 -.5 5 .16 -.3 0 .2 2 -.l6 -.2 3 -.2 6 .21- 6 2 -.5 5 -.6 5 -.3 1 -.6 2 -.6 6 -.3 2 - .2 3 -.l6 .19 -.2 6 -.1 9 -.2 5 -.3 1 -.6 6 -.6 9 -.2 2 -.1 7 -.2 7 -.1 9 . 26- 65- . 56-.56 -,3 0 _ .66 -.2 6 .15 .18 20 .22 .66 .18 .15 .19 .*5 1 2 3 * 5 2 7 8 9 10 11 12 1? 16 15 16 STRATUM I: Correlation M a trix * Correlations less than .15 between explanatory variables have been delted. 17 18 19 20 21 22 23 26 25 26 27 28 29 30 31 TABLE 13 1. Contract Rant 2. >o, of Tananta 3. >o, of Roaa k. Ho. of Baths, 5. Du Araa 6. Apt. V*lu, 7. Stroeturs A*, 6. Lot i r w 9. No. of Apia. 10, Floor Araa 11. IldA. Tain* 1 12. B U l. Valo# 2 13. Km i 1«. N aur 15. C ltc trle ltp 16. Caa 17. Stora 10. R a fr lfm te r 19. Ruraltura 20. A ir Ceadltlnar 21. Raa, -1 I r . 22. Ara. Raa, 23. SIX Hous. Qnal. 2k. H I Raaul DU'S 25. BU St. 3true. 26. HSU Diataaea 27, ttodarpadoatM 20. A ll StadahU 29. TotdC A ia lU 30. A ll F cula 31. A ll Xala 32. Rarriad DO 33. DU with C hili > . a H o iiia j* * .56 .k9 35 .k? .5k W .56 .58 39 .6? .kk , 6k V w -.5 1 .13- T T - * -.21 -.13 .20 -.03 .26 ,90 . 9 7 ^ W .16 .02 .22 -.2 9 .03 .95 . 9 5 ^ ^ .01 .16 .20 - , 2k .10 .61 .13 17 -.1 8 - , 23-.2k-. 2S*.32-,31-.27 .18 .09 .k0 .22 .kk .62 .k l . 5J*.kfl .15 .16 .22 .21 .k2 2k .37 .57 .k3 .50-.59 .17 .17 . 2k .22 .k6 kl -.kO-,23 ,16 .17 .k9 36 .33 .30 .36 .k2-.59 .19 .10 -.18 .16 .32 . 2k .23 .15 .19 -.12 .55-.33-.36-.32-.kO-.37 -.11 .09 .16-.22 -.2k-.2&*.2?-.25 .15-.17 -,52-,k6 .18 .35 32 -.21-.23 .52 .53 .68 .53 .50 -.33*.33 .2 k -.2 6 -.2 9 -.2 > .2 1 -,1 7 -.l7 .50 50 .20 .19 .kk 39 .19 .15 .25-.29-.26-.20-.17 .15 .17-.22-.27-.17-.20 .25 .38 ko .03 -.15 .23 .22 ,15 .16 -.25 - . 2k -.03 .35 . l 8-.k? .16 .30 .37 .kk .37 .25 16 .)0 1 2 3 6 5 6 7 & STRATUM II: Correlation 9 10 11 12 13 * .91 - .30 • .26 . 2k - ■ .3k .29 .37 .25 . 22- . 21-.kk -.25 •17-.19-.25 • .k> .1 5 -.1 7 -.1 8 .16 ,39 .15 .32 .25 * .25 .29 ■.23 .17 ,21- .35 -.k8 -.3k -.32 ,k7 .27 .16-.15 .16 ,35*.32 .18 . 32*.27 .21 .23 .17 .52 . 33 .15-.20 .22 .62 .k l . 2 > , 25 .36-,23 .18 .29 .22 .33 -.56 -.15 .23 .16 Ik .20 .21 .1? -.2 2 -.2 2 .39 15 16 17 18 19 20 21 M atrix * Correlations less than ,15 between explanatory variables have been deleted. 57 . 3 0 ' > ^ 16 .30 .15 -.3 9 . 38.20 - . 20-.20 - . 61^ . - ,33 -.1 8 .21 22 23 2k 25 26 27 28 29 30 31 32 * 33 36 131 or with a linear combination of other variables for that matter. If this assumption is seriously violated, the estimates of the regression coefficients may be highly Imprecise, In the present study nulticolllnoarity will be reduced in several ways. First, when a set of vari­ ables represents alternative specifications of the same basic index only one will be included in any single regression run, Seacnd, If there still appears to be a high degree of colllnearlty, alternative apacifications will be sought which assume a nonlinear relationship with the dependent variable| in several cases there would be theore­ tical justification as well for such transformations, A third alt oarnative will be to submit the data to a factor analysis and generate a set of indices which would have the desirable property of being statistically unoorrelatedt these factor indices would in turn fora the basis for a new regression model. Finally, I note that several explanatory variables have am ex­ tremely low simple correlation with Contract Rent, In some instances this low level of explanatory importance is clearly due to lew vari­ ance, e,g., Block Housing Quality, Similarly, low variance may be due to the limited number of observations with a particular characteristic, e,g,. Dwelling Unit with Child in Stratum II. A final decision on this question with regard to other variables must await an assessment of alternative specifications as well as a discussion of their interac­ tion effect with other explanatory variables in subsequent Multiple regression rums. 132 Regression Analysis The regression analysis of data from Stratum Z and Stratum II was carried out In several series of runs* The results from two basic regression Models will be discussed for each stratum. The first( re­ ferred to as the Basic Model, Is composed of raw and transformed vari­ ables. The second, referred to as the Factor Model, is composed of normalised scores derived from a factor analysis of selected explana­ tory variables. For each regression run statistics will be provided on all variables or factors includedi Irrelevant variables or factors will then be eliminated fron the regression equation by a stepwise de­ letion program on the basis of their partial correlation coefficient. The Basic Model The Initial series of regression runs of Stratum I provided an equation which accounted for 7556 of the variation in Contract Rent as shown in Table 14. After stepwise deletion, the base of the rent struc­ ture was controlled for by the following set of varlablesi Humber of Tenants, Humber of Rooms, Structure Age, Electricity, and Refrigerator. Together these variables accounted for about 6556 of the variation in rent. The signs of the regression coefficients are consistent with a priori expectations. However, I note the absence of any variable directly relating to block characteristics or location. On closer examination. Structure Age appears to be a proxy for MSU Distance, at least to a mod­ erate degree. The two housing service variables. Electricity and 133 TABLE 14 Stratus Ii The Basic Model Variable No, of Tenants No, of Boons Structure Aged Heat Electricity Refri gerator Furniture Res. -1 Yr. BIX Rental DU’S BIX St. Struc. MSU Distance Undergraduates Harried DU DU with Child LL holdings# Intercept C oeff iclent Stand. Error Par.Cor.Coef. 34.8483 7.4265 -.0088 -2.6384 29.4682 25.0024 -5.2408 .1766 -.0602 -.1758 -.1828 .2951 -2.0865 -25.4594 56.8294 21.6946 3,0070 3.3005 ..003? 14.3596 9.3676 11.9188 11.6369 .1110 .1952 .1940 .1444 .1374 13.7299 16,2889 46.0404 .603*** .183* -.194* -.011 .252** .171* -.037 .131 -.026 -.075 -.104 .175* -.013 -.128 .102 R2 - .7572 or .7340 when adjusted for degrees of freedom. F-Ratio - 32. 53*** Dependent Variable “ Contract Rent Basic Model After Stepwise Deletion# Variable No, of Tenants No. of Rooms Structure Aged Electricity Refrigerator Undergraduates DU with Child Intercept Coefficient Stand. Error 34.0937 8.3070 -.0078 30.0922 20.7509 .3559 -28.2382 22.4095 3.5332 3.2303 .0032 9.0124 10.3153 .1248 13.2863 Par.Cor.Coef. .615*'** .204* -.195* .261*** .153* .225* -.169* R2 - .74-71 or .7356 when adjusted for degrees of freedom. F-Ratio — 64.58*** Dependent Variable - Contract Rent *** - Significant at ,001 *» - Significant at .01 * - Significant at .05 ® ■“ Square Tranaforaation t ” I'O6^q(LoBjq00 ) Transformation # “ Stopping Criterion set at.05 ofPartial Correlation Coefficient, 13^ Refrigerator, unambiguously serve as proxies for more general cate­ gories such as payment of utilities and provision of major consumer conveniences! of theBe two variables Refrigerator is more highly cor­ related with household composition variables, which probably accounts for its modest independent contribution to R , less than IS? according 2 to the R deletion results. Attempts to respecify MSU Distance in log­ arithmic form, as suggested by previous housing market research, re­ sulted in little improvement in either simple or partial correlation with Contract Rent or in significance of the estimated coefficient in the final regression equation. However, the square transformation of Structure Age represents a more definite improvement over the linear specification, indicating that the negative effect of age on Contract Rent exponentially Increases as the former Increases In absolute value| conceptually this relationship is consistent with a discount for sub­ standard rental houses. Research Hypothesis I was supported at two levels. First, it is clear that Undergraduate Students is the group that pays the most rent for dwelling units, after controlling for the base of the rent struc­ ture. If a rental house unit were wholly occupied by undergraduates, they would pay more than the average sample unit occupied by co non-undorgraduates or about $3^ more per month. In contrast, family households with at least one child tended to pay the least rent for houses, 12.0£ or about $28 less per month for the average rental unit occupied by other tenants. The apparent price discrimination against 135 Undergraduate Student is significant at the ,01 level while the appar­ ent discount for Dwelling Unit with Child is significant at ,05, Research Hypothesis II relating to the total value of a landlord's holdings failed to meet the significance criterion in this series of regression runs. The sign of the regression coefficient is in the ex­ pected direction. However, its significance when added to the final regression equation is ,18, The Log^CLog^QCx)) transformation was Judged superior to other specifications given ay assumption of a rent ceiling and a noderate Increase in the significance of the estimated regression coefficient, The initial series of regression runs of Stratum II provided an equation which accounted for 83^ of the variation in rent(Table 15). Variables which control for the base of the rent structure Include Number of Tenants, Dwelling Unit Area, Structure Age, and Block Stu­ dent Structures( together they account for 70% of the rent variance. The regression coefficients all have the expected signs and are signi­ ficant at the ,01 level. Again, HSU Distance has been deleted from the final regression equation, no doubt due to its moderately high col lin­ earity with other explanatory variablest alternative specifications of distance provided little if any improvement in either partial correla­ tion with rent of in significance of estimated regression coefficient. This time Structure Age appears not to be Involved, its intercorrelatlon with HSU Distance being a modest -.23, such a low valuo might be expected given that apartment structures have been developed both in 136 TABLE 15 Variables Ho. of Tenants DU Area Structure Ages Heat Fumituro Air Conditioner Res. -1 Yr. BLK Rental DU'S BIX St. Struc. MSU Distance Undergraduates All Female All Male LL Holdings* Intercept Stratum II1 The Basic Model Coefficient Stand. Error 35.9699 •04-59 -.0087 -2.7228 —4,6064 9.0839 .0115 .0084 .1048 -.0621 .0305 20.4548 25.9493 34.4906 18.0489 3.2757 .0134 .0027 6.2112 8.3006 7.9696 .0788 .1373 .1241 .1163 .0732 7.6191 8.3187 45.4525 Par.Cor.Coef. .739*** .324*** -.303** -.045 -.055 .113 .015 .006 .14? -.053 .042 .259** .298** .076 R2 - .8306 or ,8144 when adjusted for degrees of freedom. F-Ratio - 34.64*** Dependent Variable - Contract Rent Basic Model After Stepwise Deletion# Variables Coefficient Stand* Error Ho. of Tenants EU Area Structure AgeB BIX St. Struc. All Female All Hale Intercept 37.3895 .0533 -.0093 .2115 21.6333 28.1436 25.2246 2.7075 .0116 .0021 .0778 6.8725 7.0369 Par.Cor.Coef. .798*** .403*** -.382*** .252** .289** .358*** R2 - .8333 or .8241 when adjusted for degrees of freedom. F-Ratio - 90.83*** Dependent Variable “ Contract Rent *** - significant at .001 • - Square Transformation ** - Significant at .01 £ - Log^0(Log^g(x) Transformation # » Stopping Crierion set at .05 of Partial Correlation Coefficient. 137 closo proximity -to campus as wall as in more distant locational clus­ ters. No variables directly represent the provision of basic housing services, which nay be accounted for by either low degree of variance or a high degree of colllnearIty rith the household composition vari­ ables. Finally, It Is apparent that Block Student Structures Is to a moderate degree proxylng for such deleted variables as Block Housing Quality, Building Value 1 and Building Value 2, Furniture, as Hell as MSU Distances the simple correlations all exceed .30. Furthermore, If Block Student Structures Is masked out MSU Distance appears with the expected negative sign as significant at the .05 level. Resoaroh Hypothesis I appears to be strongly supported within the apartment sector, with the key differentiating household charac­ teristic being single marital status. If apartment units were wholly occupied by female tenant b , they would pay 11 more than other groups for the average unit or about $22 more per month. If apartment units were wholly occupied by male tenants, they would pay 1 5 * ^ more than other groups for the average unit or about $28 more per month. Both of these relationships are significant at the .01 level. The vast majority of wholly male and female apartments are also occupied by students and other young adults. However, the strongest pattern of rental price discrimination la picked up by the above specification rather than by the category Undergraduate Student as was true for Stratum 1.*^ 136 Research Hypothesis II was not supported at tho .05 nigh If Icanco level although the regression coefficient sign of Landlord's Holdings was in the expected positive direction. As in the Stratum I regression runs, the Log^0(Log^0 (X)) transformation was judged superior to other specifications. When added to the final regression equation, the par­ tial correlation coefficient was still only increased to the ,26 sig­ nificance level. The regression runs utilising the Basic Model provide firm sup­ port for Research Hypothesis I in both strata. In contrast Research Hypothesis II is not supported at the .05 significance level in either stratum. Given the noderate to high degree of nultlcoll in parity in the final regression equations, a second phase of analysis seemed in order. This basically involved a factor analysis of explanatory variables fol­ lowed by another series of regression runs against Contract Rent. The Factor Model Factor analysis has proven a useful tool to geographers and other analysts for reducing a large number of variables into a smaller set of more general factors(Greer-Wootten, 1972* 57~&7). Since the factors generated are orthogonal, they have the desired property of being un­ correlated with one another, thereby conforming to a basic assumption of the general regression model. When factor analysis is followed by normal varimax rotation, each variable will tend to load an a single factor, considerably facilitating interpretation. In the present study 139 I expected to generate a eet of factors analogous to the explanatory subgroups defined In the Rental Housing Supply Model(Figure 20).^° In the regression analysis of the factor scores from Stratum I and II, the results from two alternative specifications of the dependent vari­ able Contract Rent are cocapared. As mentioned previously, Stengel's review of housing research(l970) suggests that the natural logarithmic transfornation of rent generates superior statistical results cocapared with the linear regression model. Such a transfornation makes intuitive sense as well, indicating that rental price differentials are In the fora of a constant percentage of Contract Rent rather than a constant dollar amount. To test the relevance of this generalization two factor models are specified, the linear model referred to as Factor Hodel-A and the natural logarithmic model referred to as Factor Hodel-B, The results of the factor analysis, followed by varlaax rotation, of selected explanatory variables from Stratum I are presented in Table 16, using an eigenvalue threshold of unity. Six factors were generated which accounted for a large proportion of the internal variance, 8Q£, and were Identified as followsi Factor 1 - Youth Dwelling Unit Factor 2 - High Density of Use Factor 3 “ Payment of Utilities by Landlord Factor h - Large Landlord Factor 5 “ Youth Block Environment Factor 6 - Low Turnover * 140 TABLE 16 Stratum It Varimax Rotation Analysis Variable Factor Loadings 1 2 3 _ Communalitles 4 5 6 .60* .22 .08 .26 -.28 .5939 No. of Rooms .19 .0? .72* .13 .19 -.18 No. of Baths .08 .65* .05 .10 .27 -.14 DU Area .03 -.11 .10 .6100 Lot Area .15 .12 .77* -.04 .52* -.14 .11 .00 .6145 .5386 -.21 -.01 .3816 .64* -.13 .12 -.17 .4658 .15 .7038 .09 .5359 No. of Tenants Structure Age .09 .02 -.52* .16 -.17 -.10 .4254 House Type -.22 DU Value 1 -.02 .82* -.02 .19 .07 DU Value 2 -.02 .70* .10 .03 -.14 .08 .21 -.05 .8491 -.05 .04 .7791 Heat .11 -.06 .05 .88* Water .21 -.10 .84* .04 .12 Gas .24 .06 .72* Stove .13 .10 .19 -.16 Refrigerator .69* -.11 .73* -.10 .13 .00 -.04 .00 Furniture .66* .04 .18 .04 Res. -1 Yr. .24 -.01 .00 -.24 -.07 -.10 .00 .03 -.04 .19 .00 .11 .22 .08 .22 .01 Ave. Res. BLK Hous. Qual, -.01 -.17 -.18 -.19 -.74* .77* .60* .6269 ,5606 .5905 .5431 .6018 .6643 .4587 BLK Rental DU'S .13 .16 BLK St. Struc, .15 .03 .21 .04 .09 .39* -.04 .72* -.09 -.11 -.06 -.18 -.04 -.70* -.14 .18 .13 .10 .16 -.11 All Students .73* .70* .5575 .6327 .14 .11 .00 .28 -.04 .6024 Young Adults .72* .23 .09 .13 .20 -.16 .6611 -.74* -.19 -.69* -.08 -.05 -.01 -.03 -.18 .07 .6168 .02 -.21 .5418 .8124 MSU Distance Undergraduates Married DO DU with Child LL Holdings 1 .04 .08 LL Holdings 2 .08 .05 Cummulative % Variance * = Highest Loading .07 .10 .89* .88* .01 -.09 -.02 .10 -.04 .58 .67 .80 .88 .2285 .5965 .8036 All of these factors were described as subgroups In the Rental Housing Supply Model, However* some brief comments axe In order. Since Factor 2, High Density of Use, Is formed from the independent weights of tho dwelling unit space and population loadings, it would appear to be a superior specification of a maintenance factor than a conventional Index of residential density. Factor 1, Youth Dwelling Unit, must be interpreted with caution since in addition to characteristics relating to the household composition we find major consumer conveniences load­ ing highly* All other factors unambiguously represent basic dimensions of the total set of explanatory variables,^ The Factor Model-A regression runs of Stratum I provided an equa­ tion which accounted for 62& of the variance in Contract Rent, or IJ# less than provided by the Basic Hodel(Table 1?), In spite of the drop 2 in R the resulting regression coefficients appear superior in several respectsi greater conformity to the ideal regression model, greater stability as indicated by increased significance of explanatory factors, and greater Independence of explanatory factors as indicated by partial 2 correlation coefficients and R deletions. If the household and landlord factors were deleted, the base of the rent structure would still account for about *+6% of the rent variance. Research Hypothesis I was further supported by the Factor Model-A regression results, the Youth Dwelling Unit factor being positive and significant at the ,001 level. Since the entire range of households is represented by this factor, a method had to be devised to evaluate tho 142 TABLE 17 Factor High Density Utilities Low Turnover Youth BIX Youth DU Largo LL Intercept Stratum It Factor Model—A Coefficient Stand. Error Par.Cor.Coef. 52.1793 28.7433 -19.7705 15.3541 35.2248 11.6143 235.5962 4.6470 4.6625 4.3560 4.4088 4.6475 4.5914 .445*** -.343*** .270*** .521*** .200* R2 - .6180 or .6031 when adjusted for degrees of freedom. F-Ratio - 41. 52*** TABLE 18 Factor Dependent Variable — Contract Rent Stratum It Factor Model-B Coefficient Stand. Error Par.Cor.Coef. High Density .2134 .0191 .669*** Utilities .376*** .0965 .0191 Low Turnover -.378*** -.0907 .0179 Youth BIX .0448 .0181 .196* . 533* * * Youth DU .1492 .0191 .277*** Large LL .0674 .0189 5.3820 Intercept p R **.6142 or *5992 when adjusted for degrees of freedom. F-Ratlo - 40.86*"** Dependent Variable - Contract Rent® *** - Significant at *001 * - Significant at .05 • — Natural Logarithmic Transformation 1*4-3 rent differentials associated with different household groups, In par­ ticular units predominantly oooupied by younger single undergraduates and ones predoaInantly occupied by non-students or narrlod graduate students. One standard deviation unit from the mean of the factor scores was selected as the basic differentiating criterionj In the following discussion the two basic groups will be reffered to as Youth HS and Family HS respectively. If a house were occupied by a Youth HS, they would pay 15*7£ more for the average unit or about $37 sore per aonth. In contrast If a house were occupied by a Family HS, they would pay 15.75^ lees for the average unit or about $37 less per month. There** fore, It is clear that substantial rent differentials are directly re­ lated to household composition, with an absolute value of $7*+. Research Hypothesis II was also supported by the regression re­ sults of the Factor Hodel-A specification, the Large landlord factor being positive and significant at the .014 level. Since nulticollin­ earity has been minimized by the factor analysis, these regression re­ sults would be more reliable than those generated from the Basic Hodel. Large landlords would tend to charge 10.*4£ aore per month, or $25* for the average rental house than small landlordsi again one standard devi­ ation unit was selected to differentiate between large and small land­ lords. The Factor Model-B regression runs of Stratum I provided an equa­ tion which accounted for 6256 of the rent variance, almost Identical to that provided by Factor Hodel-A(Table 18). Upon closer examination of 1U4 Tables 17 and 18 two major differences are apparent) the significance of the Large Landlord factor has Increased from .05 to .001 and that of the Youth Block factor has deeroasod from .001 to .05* The Increased sign Ifleance of the Large Landlord factor is consistent with my a 'pri­ ori expectations with regard to a rent celling effect, and on those grounds alone the natural logarithmic transformation would bo the pre­ ferred specification. However, on a purely statistical basis there would be little justification for a clear preference. The absolute rent differential between a Youth HS and a Family KB, evaluated as in Factor Model-A, is $68. The absolute rent differential between large and ssall landlords is on the order of $31• The results from the factor analysis of Stratus II are presented in Table 19* Five factors were generated, again using an eigenvalue threshold of unity, which accounted for 91/C of the internal variance. Again, the factors generated were similar to the subgroups described in the Rental Housing Supply Modelt Factor 1 — Saall Scale Development Factor 2 - High Density of Use Factor 3 - Family Dwelling Unit Factor 4 - Youth Block Environment Factor 5 - Large Landlord The only new factor. Small Scale Development, represents the else and value of the apartment building that a rental unit is located within. As in Stratum I several non-household variables have loaded on the household composition factor, in particular those describing provision 1*5 of furniture and payment of utilities. This makes the task of unambigu­ ously identifying tho effect of household composition on Contract Rent even more difficult than in Stratum 1. Still, tho other four factors do control for Important subgroups in the base of the rent structure. The Factor Model-A regression runs of Stratum II provided an equa­ tion which accounted for 753^ °f the rent variance as shown in Table 20, or about 956 less than provided by the Basic Model. Only two factors were significant at the ,05 level. High Density of Use and Family Dwell­ ing Unit. When the household factor was deleted from the final equation. High Density of Use still accounted for 5256 of the rent variance. Research Hypothesis I was again strongly supported by the regres­ sion results, the Family Dwelling Unit factor being negative and signi­ ficant at the .001 level. If we again define youth and family house­ holds as being opposite in sign and one standard deviation from the mean value of the factor score, we may evaluate the respective rent differentials. If an apartment were occupied by a Youth HS, they would pay 16.9)6 more for the average rental unit or about $31 more per month. In contrast, if an apartment were occupied by a Family HS, they would pay 16.956 less for the average rental unit or about $31 less per month. The absolute rent differential associated with household composition, then, would be on the order of $62. Research Hypothesis II again failed to meet the significance cri­ terion in the regression runs utilising the Factor Model-A specifica­ tion. The sign of tho Large Landlord factor was positive but the 146 TABLE 19 Stratum III Varimax Rotation Analysis Factor Loadings Variable 1 No. of Tenants .04 5 .57* -.43 .69* -.02 .06 .5140 .05 .05 .14 .00 .03 .14 .15 -.03 .6315 .8742 .63* -.17 .6756 .11 .11 .08 .16 .9731 .9840 .21 .9408 .14 .9527 No, of Rooms -.13 DU Area .77* -.15 -.90* -.02 Lot Area Structure Age .05 Communal1ties 4 2 - .42 3 .19 .26 .5112 No. of Apts. -.97* - .07 Floor Area -.97* .09 .05 .08 Bldg. Value 1 -.91* .11 .04 Bldg. Value 2 -.94* .11 .04 .23 .18 Heat -.22 - .11 -.45* .16 .01 .2901 Water -.18 - .10 -.39* .06 .2134 .10 -.72* .12 Air Conditioner .13 .04 .13 -.01 .32 .30 BIX Hous. Qual. .29 .64* -.04 .5051 .5084 BIX Rental DU'S .21 .27* -.23 .1789 BIX St. Struc. .45 .50* -.09 .6958 Furniture .45* -.34 - .01 .13 .08 -.01 -.42 .17 -.22 Undergraduates .19 All Students .17 .16 Married DU -.10 .04 LL Holdings 1 -.19 LL Holdings 2 -.21 .25 .27 HSU Distance Young Adults -.46 .7900 .08 .25 -.0? -.68* .16 -.02 -.61* .01 .10 .5705 .4276 .62* -.10 .02 .4073 .38 -.60* .28 -.70* .24 .14 Cummulative .48 % Variance *^ * ■ Highest Loading .5577 .6154 -.03 .15 .91* .9507 -.08 .14 .91* .9713 .68 .79 .91 Stratum III Factor Model-A TABLE 20 Factor High Density Snail Scale Youth BIX Family DU Large LL Intercept Coefficient Stand. Error Par.Cor.Coef« 44.4558 3.9571 2.0780 -28.4842 4.2027 183.3704 2.7795 2.9876 2.6992 2.8291 2.943? .836*** .125 .073 -.693*** .135 “ .7563 or .7^53 when adjusted for degrees of freedom. F-Ratlo • 68.29*** Dependent Variable — Contract Rent Factor Model-A After Stepwise Deletion# Factor Coefficient Stand. Error Par.Cor.Coef. .831*** High Density 2.7936 44.2852 -.685*** Family DU -28.4291 2.8459 Intercept 183.3704 2 R - ,7*'66 or .7421 when adjusted for degrees of freedom. F-Ratio - 166.47*** Dependent Variable - Contract Rent *** - Significant at .001 # ■ Stopping Criterion set at .05 of Partial Correlation Coefficient. 148 significance of tho factor when added to the final regression equa­ tion was .164* inproved from what It was in the Basic Model but still rather modest. The Factor Hodel-B regression runs of Stratus II provided an equation which accounted for 8O3H of the rent variance* an compared with 7556 for the Factor Model-A 1 there is a definite statistical Im­ provement, then* in utilizing the natural logarithsia specification of Contract Rent(Table 21), If the regression results of Tables 20 and 21 are further compared, we find that the Factor Model-B speci­ fication has substantially Improved tho explanatory power of the Youth Block Environment and Large Landlord factorsj the significance of the former factor has increased from .443 to .001 while that of the latter factor has increased from .164 to ,066. Research Hypothesis I is once again strongly supported by the regression results* the Family Dwelling Unit factor being negative and significant at the .001 level. If on apartment were occupied by a Youth HS* they would pay $24 more for the average rental unit. If an apartment were occupied by a Family HS* they would pay $29 less than tho average rental unit. The absolute rent differential associ­ ated with household composition* then* would be on the order of $53* Research Hypothesis II is supported by the regression results, the Large Landlord factor being positive but only significant at the .066 level. Unlike the regression results from Stratum I* only a weak functional relationship is establishedt if the landlord factor 149 TABLE 21 Factor Stratum H i Factor Model-B Coefficient High Density Snail Scale Youth BLK Family DU Largo LL Intercept .0679 .0314 .0618 -.14?6 .0282 5.1497 Stand. Error Par.Cor.Coef• .0150 .0279 .0141 .0152 .0151 .869*** .046 .397*** -.693*** .176 r2 „ .7969 or ,7899 when adjusted for degrees of freedon. F-Ratio — 76.35*** Dependent Variable *** Contract Rent® Factor Model-B After Stepwise Deletion# Factor Coefficient Stand. Error Par.Cor.Coef. .2598 .0142 High Density .867*** .390*** Youth BIX .0137 .0613 .0144 Family DU -.1434 -.687*** .0150 Large IX .0278 .173# Intercept 5.1497 2 R “ .7967 or ,7894 when adjusted for degrees of freedom. F-Ratlo - 108,74*** Dependent Variable - Contract Rent® *** — Significant at ,001 # - Significant at ,0V # - Stopping Criterion set at ,10 erf Partial Correlation Coefficient, • ■* Natural Logarithmic Transformation 150 were delated from the final equation the R 2 value would drop by only 1*. Since the objective of the regression analysis was to identify & functional relationship with respect to landlord oligopolistic con­ trol, rather than strive purely for statistical efficiency, it seemed relevant to evaluate the rent differentials associated with large and man.il landlords In Stratun II. Tho absolute rent differential associ­ ated with large and small landlords was on the order of $10, or about one-third the else of the figure estimated from the Factor Model-B regression results of Stratum I. Examination of Residuals In using the regression model I have assumed that the distribu­ tion of the error term, or residuals, would be normal, a necessary assumption for the meaningful interpretation of regression results (Draper and Smith, 1966# 86-95)# A comparative summary of the overall plots of the residual frequency distributions from the regression models utilised in the present research is presented in Table 22% the TABLE 22 Comparisons of Residuals* Stratum I Stratum II 1 St.Dev. 2 St.Dev. 1 St.Dev. 2_S^,Degt Basic Model Factor Model-A Factor Model-B Normal Model * .* 69 6 95.6* 72.9* 80,7* 78.3* 93.8* 73.3* 77.6* 68.3* .* 99 9 95.5* 99.0* 99.8* 95.7* Based on standard error of the estimated residuals. 151 regression models are conpared, with one another and with the Hoar— tini Model. All three aodoln appear to approximate the N o m a l Model reasonably well, with the Basic Model perfomlng in a su­ perior fashion in both strata. A second basic assumption about the residuals is that they are independent of one another, that autocorrelation is zero. The spatial independence of the residuals has attracted the partleu* lar attention of geographers. 62 a condition which in the present study is directly controled for by the specification of variables for distance from caapus and block characteristics. The spatial Independence of residuals was tested by plotting residual values greater than 0.5 standard deviation, again based on the standard error of the estimate. on a nap of the study area. The resulting residual naps for Stratus 1 and Stratm* II(Figures 21 and 22) are based on the Basic Model} similar naps were generated fro* the factor nodelo. In Figure 21. three major clusters of negative residuals and one cluster of positive residuals can be readily identifiede Given this evidence of spatial autocorrelation, five dichotoaous sector variables were defined (as shown in Figure 21) and subsequently in­ corporated into the Basic Model} to avoid matrix singularity only four sector variables were included directly in any one run. In the regression analysis of the Basic-Sector Model. Sectors 1 and 5 152 CI TY OF EAST LANSING Michigan [>■■■S a g i n a w fl M.S.U S T R A T U M I: Residuals • > + 0 . 3 St. D e v . < —0.3 St. D e v . MSU mss Cam pui N o n - R e s id e n tia l FIGURE 21 . 153 CI TY OF EAST LANSING &v£j£i Michigan Sflc.j ;r j ’ r % a g I n s w M.S.U S T R A T U M I I : Residuals > + 0.5 St. D ev. < - 0 . 5 St. D ev. MSU Cam pus N o n - R e s id e n tia l FIGURE 22 / H * T ~ [ / h ■ • i• it 15* were found to bo significant at the #05 level* However, it will also be noted that in the process the sectors have displaced two other explanatory variables* Structure Age and Dwelling Unit with Child* which were significant in the Basic Model* The net result is a very n snail change in the value of R (Table 23), Tho stability of the re­ maining individual explanatory variables is generally inproved in the sector specification* as indicated by increased significance of their respective regression coefficients. Still* the addition of the sector variables is only a minor overall improvement. In Figure 22* there also appear to be several clusters of positive and negative residuals* distributed in the same general sectors as in Figure 21 * For Stratum II* then, the identical set of dichotomous sec­ tor variables was added to the Basic Model1 once again Sector * was deleted to avoid matrix singularity* In the regression analysis of the Basic Sector Model* no sectors were found to be significant at the *05 level(Table 2*)* Only Sector 5 significant at the .10 level* There­ fore it was quite clear that the Basic Model was the superior specifi­ cation* What the residual analysis of the two strata suggests is that the empirical reliability of the regression models could be slightly im­ proved by respecifying spatial variables* In addition to the re specifi­ cation of sector and distance variables* it is also apparent that a "block group" variable would be superior in controlling for environ­ mental externalities than the block level variables and factors used 155 23 Stratus Ii The Boalc Sector Model Variable No. of Tenants Ho. of R o o o b Structure Age9 Heat Electricity Refrigerator Furniture Res. -1 Yr. BIX Rental DU'S BUC St. Strue. HSU Distance Sector 1 Sector 2 Sector 3 Sector 5 Undergraduates Married DU DU with Child LL Holdings*! Intercept Coefficient Stand. Error 31 . ^ 3 9 8,1*325 -.0060 5.62*4-1 28.3092 25.3567 -.284-1 .1697 -.0068 -.2038 -.1170 -28.9933 -6.3877 3.1773 24.1522 .2764 -2.8891 -23.1788 82.3180 8.4066 3.9557 3.5582 .0039 14.7488 14.4229 12.0835 11.7660 .1103 .2070 .1998 .1574 15.9055 19.1676 13. 9 W 14.2635 .1389 13.9626 16.7234 66.1062 Par.Cor.Coef. .558*** .200* -.129 .032 .164* .175* -.002 .129 -.003 -.086 .1 0 °> U) TABLE -.152 -.028 .019 .142 .166* -.01? -.116 .105 R2 - .7735 or .7412 when adjusted for degrees of freedom. F-Ratio - 23.91*** Dependent Variable - Contract Rent Basic Sector Model After Stepwise Deletion# Variable Ho. of Tenants Ho. of Rooms Electricity Refrigerator Sector 1 Sector 5 Undergraduate s Intercept Coefficient 28.7466 10.6174 32.7267 30.2685 -31.0326 27.8261 .4330 -.0524 Stand. Error 3.4299 3.1597 8.9506 IO.3328 13.0476 11.5230 .1161 Par.Cor.Coef. .561*** .262*** .283*** .230** -.189* .192* ,289*** R2 - .7538 or .7425 when adjusted for degrees of freedom. F-Ratio - 66.91*** Dependent Variable - Contract Rent *** ■* Significant at .001 ** - significant at .01 * ~ Significant at .05 • — Square Transformation £ “ Log^Q(Log^Q(X)) Transformation # — Stopping Criterion set at .05 of Partial Correlation Coefficient. 156 TABLE 24 Variable Stratum II* Tho Basic Sector Model & Coefficient Stand. Error Par.Cor.Coef. #704*** Ho. of Tenants 34-.7672 3.5591 .1448*** DU Area .0675 .0137 -.006? .0031 -.274* Structure AgeSJ .016 7.17441.1612 Heat .072 Furniture 8.1872 5.8083 Air Conditioner 9.8911 .019 1.8897 .0218 .0823 Res. -1 Yr. .027 •31**8 BLK Rental DU'S .171 .1839 .2101 FUC St. Struc. .1378 .153 .2002 MSU Distance .135 .1493 12.2222 Sector 1 .015 1.8331 17.5300 •124 21.5874Sector 2 12.3858 .060 Sector 3 7.3854Sector 5 21.4880 13.6947 .157 Undergraduat ea .0801 -.0121 -.015 All Female 8.0071 20.6209 .253* 8.7544 All Male .246* 21.9289 .103 53.7742 LL Holdings^ 54.59^7 -64-.2263 Intercept 2 R “ .8397 or .8091 when adjusted for degrees of freedon. F-Ratlo » 27.63*** Dependent Variable - Contract Bent *** " Significant at .001 9 - Square Transformation * - Significant at .05 t ■ Logj0(Log^Q(X)) Transferaation # - Stopping Criterion for Stepwise Deletion was set at .05 of the Partial Correlation Coefficient. 157 la tho present research* the scale of bloak aggregation night be deternlned by systematically testing the output of aovoral conventional grouping programs* 63 However, it would be equally Important to improve the quality of the block level data as well, perhaps In the manner demonstrated by Kaln and Quigley (l970) • As doairablo as such improve­ ments night be, they were beyond the scope and resources of the pre­ sent study, and in all likelihood would not alter the validity of the two major research hypotheses* Summary of Analytical Results In many respects tho Factor Hodel-B constitutes the most satis­ factory regression model for both sectors of the youth comaunity rental 2 housing market* Although the Basic Model provides higher R values, the moderate degree of coll inearl ty between certain explanatory variables makes these values, as well as tha significance of the estimated re­ gression coefficients, somewhat suspect* Both factor models have the advantage of eliminating the colllnearity problem but do so at the ex­ pense of having to explain the effect of certain variables which have loaded on the household composition factor* this makes it difficult to unambiguously Interpret the observed rent differentials. While Factor Model-B is in many respects superior to Factor Model-A, it is much more difficult to discuss the rent differentials associated with the natural logarithmic transformation of Contract Rent* still, it Is the most satis­ factory model for examining the effect of the landlord factor on the rent variance. 158 The regression results indicate consistent and unambiguous sup­ port for Research Hypothesis I* In general, as the percentage of stu­ dents and other young adults inor ease a in a. household they tend to be charged higher rent. In both strata a predominantly youth-ntudent household pays about 30% a ore for the average rental unit than does a more conventional family household. The support for Research Hypo­ thesis II is less consistently confirmed in both strata, and is more dependent on tho particular regression aodel specification. In stra­ tum I the explanatory importance of a landlord faster is confirmed by both factor model specifications! there is a rental price differential of 1256 between what large and small landlords charge for the average rental unit in a house. In Stratus II the explanatory importance of a landlord factor is only confirmed in the Factor Model-B specifioation, involving a natural logarithmic transformation of tho dependent vari­ able! there is a more modest rental price differential of 6& between what largo and email landlords charge for the average apartment unit. Two general questions relating to the interpretation of the regression results remain to be discussed! what proportion, if any, of these ob­ served rental price differentials represent excess profits and, if so, to whom would such profits accrue? Some tenatlve conclusions and sug­ gestions for further research with regard to these questions are of­ fered In the concluding chapter. CHAPTER VI SOCIAL ACTION As demonstrated In Chapter V, normative economic theory can play an Important role In the analysis of existing urban structure. Given the evolving urban crisis cf the 1970"s a some geographer suggest that we re-oxanino our research priorities and begin to formulate a new series of questions related to tho normative concept of social justice (Harvey, 1971 )• Geographers can respond to urban crisis In three posi­ tive ways* Some will continue to utilize their research expertise to document the extent of systemic crisis, communicating results to those In established decision making positions(Horrlll and Kelley, 1969)* A second approach will be to work as advocacy researchers for short per­ iods of tine with disadvantaged community groups so as to Increase their collective decision making power(Volpert, 1973)- A third approach Is demonstrated by the present research, following the pattern practiced by the Detroit Geographical Expedition, that of becoming actively In­ volved In both the research and the process of social change from one's own comaunity base for an extended period of time. The analytical purpose of the present study as presented In Chap­ ter V has been to describe the structure of a youth community rental housing market. The overall objective of the social action experience outlined In this chapter was to bring about more reasonable rental condi­ tions while Increasing the decision making power of the youth community* 159 i6o a general model of social change Is specified and then utilised to describe the transformation of research results Into a set. of poli­ tical dcaands endorsed by a significant portion of the youth community. Included is a description of the evolution of the social action coali­ tion that I primarily associated myself with during the study period* In this way I hope to convoy an overall impression of the social action experience and some critical insight into the problems of organising for social change in a university town* Specification of Model The approach to social action adopted ie similar to one briefly described by Corey(1972) as "indigenous liberation." In this approach a particular relationship is specified between the research team and the client community* one in which the team begins its work as a sub­ group cf that com unity and in collarboration with other subgroups utilizes research skills to help bring about nora direct community control over important aspects of the local socio-economic environ­ ment. The term indigenous liberation seams appropriate for describing the status of ay own housing actloa-resesrch team since all of us were experienced members of the larger client community prior to the initi­ ation of formal research and social motioni clearly# we did not "para­ chute in" as a team of change agents to work with an exotic client com­ munity. While Corey can be credited with identifying a number of working relationships between a team of change agents and a client community# 161 ho has not provided a theoretical model for describing tho actual phases in the process of social change. In his review of the social change literature, Ronald Havelock (1969) provides a general discussion of the change process which I have found relevant to describing ay own social action experience. According to Havelock, most models of social change are one of three basic types1 1. the research, development, and diffusion model 2. the social interaction model 3. the problem-solver model The first model emphasizes the overall sequence from basic research through product development to distribution of the product to a mass client population, a process typical of large scale governmental in** stltutlons and commercial corporations. The social Interaction model emphasises the diffusion process in which a particular innovation Is adopted by a client population* this model 1b typical of ones used by geographers such as Hagerstrand, Morrill, and Rose. The problem-solver model emphasizes the needs of a client population and the process uti­ lized by change agents to assess those needs, formulate alternative solutions, and work with the client population to institutionalize social change. Of the models reviewed, the problem-solver model seems most appropriate to describing the social action dimensions of this study. 162 The problem-solver change model resolvea the process of social change into a ntabor of overlapping phase01 problem awareness* search for and selection of solution* action steps* installation and evalua­ tion* and diffusion to external communities(Figure 23)• Tho sequence* overlap* and recurrence of phases during social change is a topic of much debate among social theorists* with little experimental evidence to validate any one position(Havelock* 1969* Chapter lOt 11-15)* None­ theless* at its present level of articulation the problen-solvor change nodel can be adapted to a variety of social action situations* In desribing the collective experience of ay own teaa of change agents* I have found it useful to define ourselves as a subgroup inter­ acting with other subgroups within the youth community. After an ini­ tial phase of independent research* we helped fora a social action coalition with other community issue subgroups in a Joint effort to organize and win the political allegiance of the larger youth commun­ ity. Simultaneously* this social action coalition found itself in di­ rect competition with the organising efforts of external groups whose representatives were already in positions of decision making power with­ in the municipal government. Surprisingly, the social change literature provides little insight into the process of group formation of a social action coalition within a client community or the situation in which competing groups strive to win the allegiance of a particular majority constituency. In this sense the present study represents exploratory work. 163 Problem-Solver Change A In itia l Id e a Q G en eral £ Action Q In s titu tio n a liz a tio n £ E x te rn a l Plan Steps Diffusion FIGURE 23 M o d el 164 Social Action In East Lansing The discussion of the social action experience will be divided Into three sections, each one characterized by a dominant mode of activity as described In Figure 24*In the first section the focus Is on Initial research objectives, the problems of group formation, and experimentation with specific tactics of social change. In the second section the focus is on the specification of a general social action plan, followed by a description of action steps leading up to a municipal election. The third section focuses on the municipal election campaign itself. While I will be primarily documenting the transformation of the rental housing research into political demands, other activities will be described as they relate to the formation of the social action coalition and its interaction with the existing municipal decision making establishment. A chronology of the overall social action experience from the perspective of the housing team is presented in Table 25* Reconnaissance of Goals and Means My deliberate involvment as a housing researcher was prefaced by a personal dispute with a landlord in the summer of 1970. This experi­ ence aroused my curiosity as to the general conditions in the student rental housing market. Accordingly, in the fall of 1970 I made use of my position as a teaching assistant in a geography field methods class to form a group to explore the social and economic dimensions of the Applied Social Action GENERAL FLAN INITIAL IDEA {Action Step •Action jAction i Reconnais­ sance of goals and aeans Reconnaissance of results night indicate change in general plan Decision about Decision about Decision about 3 Reconnais­ sance of results ✓ After Lewin, 1952 FIGURE 2k Reconnais­ sance of * results / / ^^88 / 166 TABLE 25 Chronology of Social Action Fall 1970 Rant Group I i Winter 1971 Rant Group II Spring 1971 Rent Group III 1 E*La Rent Survey Sunaer 1971 Fall 1971 Vinter 1972 Spring 1972 Housing Task Force Geography^ Class ^Engineering Class Sinner 1972 Fall ->923 Burchan 1972 Winter 1973 Spring 1973 Housing ^ Suboomlttee Sunner 1973 M cNall-Brown Campaign Fall 1973 Vinter 197^ 1 ^Sociology Class Tenants Resource * Center 167 rental housing market. The project was defined at this time in the following terms* Any group of people needs to know as much as pos­ sible about the area In which they live. No doubt students In East Lansing know a great deal about their situation but It*s likely that what they know is confined to Individuals or at best a cir­ cle of friends, rather than the collective group. Like with so many things In our society, informa­ tion is the product of competition with other peo­ ple, Unfortunately, information therefore tends to be spatially fragmented, of varying degrees of reliability, and is easily lost as more experi­ enced people migrate out. Such conditions place the student population at a disadvantage to "pre­ datory" groups such as shopowners and landlords, not to mention wheeler-dealer city officials,,. It is our intention to help provide students with rent information which will facilitate the plan­ ning of collective strategies. In effect, we will be dealing with the system of landlord-tenant relationships within a community development frame­ work, ("Pro ject Proposal," Geography ^15* 1970) Ten members of the class elected to work with me on this project, forming what is described in the chronology as Rent Group I, The first responsibility of Rent Group I was to design and field test a rental housing questionnaire. This was accomplished with the advice and active participation of members from two existing housing interest groups* Off-Campus Council(OCC) and a Free University class or^nlzed by housing activist Peter Carrington, OCC was a student government sponsored organisation which primarily functioned as a counseling center for student tenants and a repository for housing research, Carrington*s class was run as a workshop, providing tenants with skills required for resolving common housing problems. 168 The next responsibility for our group was to conduct a pilot study of the youth-student rental house submarket. Since one of our basic objectives was to provide tenants with rent information, we decided to involve as many as possible in the actual process of data collection. In this way rent research, recruitment of new researchers, and initial feedback to the community would take place simultaneously. This plan was implemented in the following manner. First a booth was set up in the MSU Union for the recruitment of survey teams. Each team picked out a block from a large map portraying the "student ghetto,*' was briefed on interviewing techniques, and given a survey kit. Within two weeks completed questionnaires were being returned and a steady stream of new rent surveyors were appearing at the booth. By the end of the term over 100 tenants had been involved in the re­ search and we received completed questionnaires from sixty blocks scattered throughout the youth-student rental housing market. In Winter Term 1971» I formed Rent Group II from previous members of the original group, plus new people from OCC and the rent survey teams. The primary objectives of this group were to code survey ques­ tionnaires, collect and code background information from existing data sources such as City Hall, analyze the data, and plan for the next phase of survey work. By the end of the term all objectives had been completed, including a two-page summary of the preliminary regression analysis of 100 rental houses. 169 During Winter Terra, I also began a continuing association with an off-campus group called the Coalition for Human Survival(CHS) This group was to assume the major role of a social action coalition in organizing the youth-student group as a political force in the city on the basis of local issues. When the CHS was formed in late December, 1970, it was composed of people who were experienced in organizing for a variety of local and national concerns* Groups originally represented includedi Movement for a New Congress, Joint Issue. New University Conference, the East Lansing Democrats, a rent survey group. Cyclists for a Cleaner America, Seeds of Change, an organic farming group, the Lansing Area Peace Council, the Joint Housing Committee, and a sociology class that studied East Lansing from the standpoint of a candidate* (joint Issue. July 12, 1971) What brought these diverse people together was a common interest in furthering community participation in decision making at the munici­ pal level* Initial interest was stimulated by the anticipated ratifi­ cation of the 18 year old vote, given an upcoming City Council Elec­ tion* In this initial period of group formation considerable time was spent in discussing the potential of the youth community as a base for radical social change* In addition to sharing the general political objectives of the CHS, I was particularly interested in working to help transform the rent survey findings into concrete political demands. However, given my assessment of the political balance of power at the time, I was 170 not convinced that CHS candidates could actually be elected. Still, I thought the general electoral process would function to "raise the consciousness" of many members of the youth community for future political action. At the same time, we would be gaining valuable ex­ perience as a social action coalition. In Febuary the City Council provoked the CHS into action by scheduling a hearing to change the primary date frca its traditional time in the spring to the summer. In its initial public lobbying efforts the CHS emphasized how the proposed change could not fall to minimize the Impact of student voters, as far fewer would be in residence in the summer. However, these initial efforts to influence the municipal decision making process proved unsuccessful and the primary elections were rescheduled for August, In Spring Term 1971» I formed Rent Group III from volunteers re­ cruited from OCC and CHS. Our primary objective was to more completely survey the rental house submarket. In order to havo closer control over how the survey work was conducted, the survey teams themselves were recruited exclusively from classes. In this way the sample of rental houses was increased from 100 to over 250* representing over 20 percent of the sector*s rental units. In addition to administering the survey questionnaires, the teams were instructed to present tenant households with the two-page summary of the Fall Term survey analysis, our initial attempt to communicate general rent information back to the client community. 171 During Spring Tern members of Rent Group III also gained experi­ ence In the public presentation of research results. The Initial pre­ sentation was made to an Introductory geography class from which sev­ eral survey teams had been recruited. This presentation served as a model for critical Input Into a subsequent series of public hearings conducted by the City*s Joint Housing Committee. The Joint Housing Committee was formed by the City in 1970 to identify key housing problems and to formulate recommended solutions ("Housing Prospectus," 1971). By the spring of 1971 the Committee had prepared preliminary findings and sponsored a series of public hear­ ings In order to receive community feedback. After studying their initial abbreviated report, "Housing Problems in Bast Lansing," *r decided to take an active role at the hearings. Our Initial Inputs focused on the problem of high rent in the city, as documented In U.S. Census reports and confirmed In our own survey work. In addition to a summary statement our presentations were dramatized by a- series of posters, based on case studies, showing where the tenant's rent dollar went. In addition, specific objections were made to proposed zoning changes which would have further discriminated against unrelated In­ dividuals renting In particular areas of the city. Finally, we ques­ tioned the validity of certain facts and assumptions in the Committee's report, suggesting the need for more basic research into the structure of the rental housing market before finalizing recommendations. 172 In May of 1971, tho CHS began a new series of discussions focused on the August City Council Primary and Initiated a major voter regis­ tration drive. In June a CHS member. Chuck Vlll, announced his willing­ ness to run as a candidate and efforts were made to transform the CHS from an informal discussion group Into a more tightly structured cam­ paign organization. Hew Community Co-op was selected as campaign head­ quarters, a significant choice in terms of Its central location within the youth community and its vanguard role In sponsoring a variety of 65 cultural left enterprises. In the summer of 1971, own energies were directed toward trans­ forming the Rent Group from primarily a research oriented group Into an action group concerned with organizing for local housing reform. For the first time we began to draft articles for the local underground newspaper, Joint Issuo(julY-AugU3t. 1971), based on our own research results and critique of proposals endorsed by the Joint Housing Commit­ tee. In addition to further lobbying efforts before the Joint Housing Committee and City Counoll, we began to function as a housing resource group for the CHS primary campaign. Housing was publicized as one of several key Issues and considerable time was spent briefing CHS candidates on the basic dimensions of the rental housing market. 66 The final ratification of the 18 year old vote only marginally altered the outcome of the August Primary, coming only two days before the registration deadline. In a field of 12 the CHS endorsed candidates finished 7th and 8th, polling a surprising 1350 votes each but failing 173 to win a place on the Noveaber ballot for one of the three council seata* Later that month the CHS formed an alliance with two success­ ful liberal candidates, sponsored by a group known as Project City Holl(PCH), primarily to help ensure that CHS campaign Issues would continue to be raised in the fall election. This time Chuck Will was to run as a write-in candidate for the third council seat. In coordination with the CHS fall election campaign, our housing group continued to generate background articles on local housing prob­ lems, focusing in particular on the more blatant "rip-off" situations -evealed In our purvey(State News. Ootober 27t Joint Issue. Noveaber l). Election prospects for the CHS-PCH slate looked considerably more pro­ mising after the State Supreme Court ruled, late In August, that stu­ dents could vote in thjlr college towns if the wished. After a massive registration drive succeeded in adding 8000 new youth-student voters to the rolls, the balance of voting power appeared to shift decisively in favor of more liberal candidates. In the Noveaber Election the two PCH candidates led the field with about 8000 votes each followed by two political moderates with about 5100 votes. The CHS sponsored candi­ date came in 5th with over *4-000 write-in votes, falling to win a seat but outpolling the two conservative candidates who had led the field In the August Primary. In spite of the CHS's failure to win a council seat, the group found Itself in a strong lobbying position with respect to the successful PCH candidates. Within a year, then, the CHS emerged as a major political force at the municipal level. In the Initial phase, then* housing was identified as a major community issue and the basic research problems worked out. In addi­ tion a small group of housing activists had been recruited from the client community and a working relationship established with a broader social action coalition. Finally, experience was gained in a variety of basic organizing activities, building up to the 1971 City Council Election, which considerably increased the political clout of the social action coalition. General Plant Research and Social Action In the second phase of the social action project the major empha­ sis was on more systematically organizing the political consciousness of the youth community utilizing a specific set of issues related to their collective needs. After the November election the CHS scheduled a special meeting to discuss the political gains of the previous year and doclde upon a general strategy for the coming year. It was at this meeting that the CHS adopted an explicit strategy of research and social action. Task forces were formed with each one responsible for developing information on a particular community problem such as drugs and police* student labor* transportation, housing, and upcoming county elections. Any public action which might be suggested by such research was subject to general approval at a regular CHS meeting. My own choice was to help coordinate the activities of the Housing Task Force(HTF). The basic structure of this new approach is clearly demonstrated by 175 the first action project undertaken by the HTF, described as the Peripheral Route Action. The Peripheral Route Plan, outlined In Figure 25» waa attempt by the City to revitalise the commercial district by redeveloping adja­ cent residential space( thereby promoting expansion to the north while facilitating traffic flow and creating parking space for prospective shoppers("Traffic Study,” 1970)* This plan had generated considerable controversy throughout the city, having become a major issue In the 1971 City Council Election. Our initial objective was to document and further publicize the degree to which the proposed route would ad­ versely affect the housing needs of adjacent tenants and homeowners, utilizing sane of the basic statistics already collected In our hous­ ing research. A four-fold strategy was established1 1. contacting existing Interest groups 2. conducting an opinion survey along the proposed route 3. drafting an Impact study *J>. lobbying at public meetings By the end of December contact had been established with non-student organisers in the Bailey and Central school areas, the opinion survey completed, the impact study drafted, and initial lobbying efforts made before the City Traffic Commission and City Council. Major organizing work, however, did not begin until Vinter T e n . In Vinter Term 1972 the results of the Peripheral Route opinion survey were reported at a general meeting of the CHS. Of the more than iiiim ii two way accessory street one way accessory s tr ee t PERIPHERAL FIGURE 25 ROUTE 177 200 households canplod, 92 percent indicated their opposition to the proposed route* On the basis of this work the CHS decided to proceed with a full scale protest campaign, the first phase of which was to more widely disseminate copies of the impact study to Interested com­ munity groups (Appendix B). It was not until the middle of February that the City Council began to more for a public hearing on the "Peripheral Route Plan." First the City Planning Commission sponsored a seminar on general city problems, inviting community representatives to attend, includ­ ing members of the CHS. Soon after a public hearing date was announced for the Peripheral Route Plan itself. The CHS responded by releasing the results of the opinion survey and the impact study to several local newspapera (Towne Courier. February 29) • Both the Towns Courier and the State Hews gave excellent cover­ age to the upcoming public hearing, summarising the City's position and those of opposing groups. In particular the CHS's arguments were well outlined and reinforced by the publication of a provocative map (Appendix B)(Towne Courier. March 8t State News, March 9). Over 500 people were in attendance at the public hearing and supporters of the proposed plan were overwhelmed by opposition from the Bailey and Cen­ tral school groups. Cyclists for a Cleaner America, members of the HTF, and other concerned citizens. Evan the local Chamber of Commerce, which had been an early advocate of the plan, confessed that a survey of membership opinion had revealod evenly divided sentiment. At their 178 next meeting the Olty Council sent the plan bock to the Planning Com­ mission for reconsideration (State Journal., March 22). Oven this action woo not enough to asouage angered residents, who continued to organise a petition drive to reaove the proposal from the City Comprehensive PlanCToune Courier. March 29). Finally, in April, the Planning Com­ mission reversed its previous support and requested the City Council to withdraw construction funds frca the 1972-1973 budget. As a successful CHS project the Peripheral Route action accom­ plished several things. First, it reinforced the credibility of com­ munity researchers while calling into question the Judgment and mo­ tives of the city's professional planning staff. Second, good com­ munication links were established with the conventional news media, in particular the Towne Courier and the State Hews. Finally, the social action coalition Itself was successful in identifying with on issue which went beyond the exclusive concerns of the youth community, one that directly involved working with older non-student groups who shared social space with the youth-student group. Several other projects were generated by other CHS task farces during Vinter Term. One such project was the unionization of restau­ rant workers, a project which met with mixed success but generated considerable favorable publicity within the youth community. A sec­ ond project was the initiation of a campaign to Introduce a municipal ordinance specifying a token one dollar fine for the use of marijuana, another popular issue from the perspective of the youth community. In 179 addition to Its action projects, the CHS made the decision to parti­ cipate in the 1972 Ingham County Electioni this decision represented a major policy change for the CHS from a spatial focus on the youth community to more regional electoral politics. Spring Term 1972, the CHS focused Its energy on the passage of the one dollar marijuana ordinance, culminating in an April public hearing which was again well attended try over 500 people. However, unlike the hearing on the Peripheral Route, sentiment on the issue being discussed was sharply divided, student against non-student. In spite of this opposition a modost five dollar fine was subsequently passed toy City Council. That spring the major accomplishment of the HTF was the comple­ tion of a new and more comprehensive survey of the rental housing mar­ ket. Task force members acted as coordinators for two community oriented research classes which did the actual interviewing. 67 As in the previous field work, the survey teams were instructed to pass out an updated s w m a x y statement on the rental housing market upon completing their interviews. In Summer Term 1972, CHS activities were largely focused on the upcoming Ingham County primary. By July a short platform had been drafted by the task forces and discussed and approved by the general membership. Seven candidates were subsequently endorsed by the CHSi five for the County Commissioner districts in and adjacent to East Lansing and two at large candidates for the offices of Sheriff and 180 IValn Commissioner. Much to everyone*s surprise all seven won a place on the Noveaber ballotj the victory was considered especially signifi­ cant because of the lack of a large student vote in the stem or(state News* August 11)• The major responsibility of the HTF that summer was to analyse the spring rent survey. 68 In addition we began to work out a strategy of response to a set of new housing ordinances drafted by the City Attorney from the recommendations of the Joint Housing Committee. The City Council had received the new ordinances In August and after strong lobbying from tho CHS changed the hear in g date froa early Septenbox, when few students were In residencet to early October. Pall Tern 1972 began with the HTF organizing an intensive publi­ city canpal gn relating to the upcoming housing hearing. He prepared and distributed a leaflet at HSU registration, the HSU Union, and throughout the youth community! in brief the leaflet summarized the survey findings and encouraged interested people to testify at the hearing. A research report was propared to provide a sore detailed summary of the 1972 rent survey, primarily intended to reinforce our credibility as critics of the proposed ordinances| advance copies were sent to city council members and selected members of the administrative staff. Finally, a two-page summary of our critique of the proposed or­ dinances was prepared, emphasizing our major objections(Appendix C)i Given the position of landlords in the rental housing market, we maintain that the composition of the proposed Housing Commission must primarily reflect the interests of tenants. 181 Given the Inflated rent structure cf this city, we maintain the regulation of maintenance stand­ ards must be tied to some fora of rent control* Given the shortage of low priced housing in the city and people's basic right to have equal ac­ cess to what Is available, we are firmly opposed to all attempts to regulate the type of house­ hold that occupies a particular rental unit through the city zoning ordinance* Our lobbying efforts once again received excellent coverage In the Towne C o u r i e r (September 27), State Hews(September 28 and 29), and Joint Issue(October 2), In fact on October 3 the State News provided editorial support to our major points as well as space for a HTF "point of vlewj" this represented a new success In securing the pro­ motion of our views by the newspaper media* At the October housing hearing a variety of printed literature was passed out by CHS members including survey reports, position pa­ pers, and even a set of original housing songs entitled "Sing Along with City Council"(Appendix D). The HTF itself assumed responsibility for presenting a four-person critique of the proposed ordinances. Over 300 people attended the hearing that evening, largely representing student tenants, and provided a conducive environment for our basic arguments* The few landlords and other businessmen who did speak up were also critical of the ordinances, although for rather different reasons! they would have preferred as little regulation of their busi­ ness practices as possible. Conspicuously allant were representatives of the homeowner group, whose lobbying efforts in 1970 had mainly been responsible for the formation of the Joint Housing Committee (Towne 162 Courier. November 9, 1971). By the end of the evening sufficient public pressure had been demonstrated to persuade the City Council to send the ordinances back to the City Attorney for further revision. Hover or, the campaign to incorporate our recOBiaendatlona into the final draft was to continue intemlttontly until the summer of 1973* After the October housing hearing nuch of the CHS's energy van di­ rect od into the Ingham County election campaign in the form of voter registration, canvassing, media publicity, and speeches. In the Novem­ ber election we vere gratified to find that four of the five CHS en­ dorsed County Commissioner candidates had woo seats. However, our can­ didates for Sheriff and Drain Commissioner lost by wide margins, indi­ cating that eur region of effective political superiority was limited to the Immediate Bast Lansing region. This was the first time that the CH3 had demonstrated its ability to win at the electoral politics game. Hy own energies following the October housing hearing were di­ rected toward revolving a major housing problem, my own, resulting in over two months of reluctant but Intensive participant observation. In brief, the furnace in my aged apartment building broke down and the landlords proved unwilling to authorise repairs (Appendix E). While the efforts of my neighbors and me were ultimately unsuccessful in forcing the landlords to restore heat, the experience provided me with considerable insight into the legal aspects of the landlord-tenant relationship. I also found this experience useful in evaluating the 183 maintenance response sections of the proposed City Housing Ordinances* In Winter Tern 1973, the HTF conducted a new sories of work ses­ sions on the proposed City Housing Ordinances* The basic pattern of action was to work up a detailed critique of a particular section and then communicate our recommendations for change in written and oral form at City Council meetings. In addition I assumed najor responsi­ bility for researching the case for rent control, as one procedure for Bodifylng the existing market situation. During this same period that-CMS was working out a spring strategy for the upcoming 1973 City Council Election. Winter Term, then, was characterized by renewed in­ ternal discussion and low key social action* The 1973 City Council Election In the months that followed all CHS activities became directly focused on the City Council Election* At the beginning of Spring Term, for example, the- CHS went ahead with plans to sponsor a HConvention for a Responsible City Council.’' This Convention was to be open to all people in the East Lansing area and was designed to perform several important functions* First of all, the CHS favored encouraging greater community participation in the actual process of platform drafting and candidate selection* Secondly, the CHS sought to minimize possible con­ flict between liberal and radical groups during the actual campaign per­ iod* Finally, it was hoped that the Convention Itself, as a public event, would help promote awareness among the youth-student electorate that 184 Important decisions ware going to bo made by whoever voted in the Au­ gust Primary. Like other CHS task forces, the HTF had recruited new members In the weoks prior to the Convention date and considerable energy went into the drafting of a ooaprehenslve plank, our basic program for effecting fundamental change in the city housing aorkot. On the first day of the Convention a housing plank sub-committee went over this draft, making minor modifications, and later submitted an 8-point housing program to the general Convention groupi 1, Revision of City proposed housing ordinances 2. Provision of emergency repair service 3* Elimination of residential segregation 4. Provision of publicity and counseling 5. Encouragement of non-profit ownership 6. Establishment of rent control 7. Establishment of a rehabilitation program 8. Encouragement of new and experimental concepts in design and construction Two additional sections were added from the floori 9. 10, Establishment of a tool and repair library Revision of the City Comprehensive Plan The final form of this housing program as endorsed by the Convention may be found in Appendix F. After the entire platform was approved, the Convention endorsed two candidates to run for City Councili Mar­ garet McNeil and Nelson Brown. Although the Convention turnout was not impressive in terms of numbers, never more than 70 people, other ob­ jectives were accomplished. Serious competition from other liberal and 185 radical groups In the primaries was avoided and considerable publicity about the upcoming city election was initiated throughout the ooonun­ ity (State Hews. April 9 and 18| Towne Courier. April 18). In addition to its work on the McNeil-Brown housing program, the HTF engaged in a number of other activities that spring. To further publicise our perspective on housing we sponsored the East Lansing Housing Expedition, inviting the entire coonunity to join with us in the streets for a bicycle tour of the rental housing market(Appendix G), We also helped coordinate the efforts of a sociology field methods class to follow up the question of price discrimination against women in the rental house sector. With the cooperation of several small landlords, we were able to prepare a more detailed financial account­ ing of where the rent dollar went in the rental house sector (Appendix H). Finally, at the end of the term we sutmitted our summary of recom­ mended changes in the proposed City Housing Ordinances to City Council, once again urging them to defer final approval until more basic hous­ ing research was donet their final decision, however, was deferred only until late June. Other CHS members were engaged in activities directly related to the HONoil-Brown Campaign. First headquarters were established in the basement of a former fraternity house. Next a massive registration and absentee voter apllication drive was carried out for the August Pri­ mary. Both candidates were already delivering a series of informal talks primarily directed at provoking the interest of the youth-student constituency. 166 Summer Term 1973 wan largely dominated by the McNeil-Brown Cam­ paign, with the HTF functioning as a housing resource group to the candidates. In addition, we helped generate more publicity about the probable adverse Impact of the proposed City Housing Ordinances, building up to the June City Council hearlngfState News, June 20, 22, 25) and concluding with a sharply critical '’point of view”(Ap­ pendix I). In spite of this protest and the additional Input at the hearing itself, all of the housing ordinances were approved with only minor revisions (State News. June 29* Towne Courier. June 27). In the August Primary, Brown and McNeil ran second and third out of a field of seven, assuring themselves of a place on the November ballot. As expected the overall turnout was light In predominantly student precincts. However, the CHS candidates were still able to outpoll the fourth place moderate candidate by 700 votes. No doubt, the absentee ballot drive provided the extra margin of victoryj of the 2087 votes cast In predominantly student precincts 958 were absentee (State News. August 8). Given the return of several thousand student voters in the fall, the prospects for a CHS City Council election sweep appeared very favorable. Following the August Primary, the CHS held a "retreat* at a near­ by farm to reconsider the general plan and other questions of Internal reorganisation. One major change Involved the re specification of the "task force" as a process leading to Institutional change. Future task 187 forces were to operate strictly as exploratory research groups, coor­ dinated from a central research office of the CHS. If research results showed promise for social action, the CHS would provide the task force aore intensive support in the form of funds and personnel, promoting it to the status of a "project." Finally, it was hoped that some pro­ jects might evolve into "institutions" which would provide services directly to the youth communityi these would generate their own funds and recruit and train their own personnel. One of the first projects generated from this revised general plan was the Tenants Resource Cen­ ter, organised by a embers of the HTF. Fall Tern 1973 began with the establishment of the Tenants Re­ source Center(TRC). A s conceptualised by Mark Charles, coordinator and former member of the HTF, the TRC was to perform three primary func­ tions! counseling tenants, conducting housing research, and publishing educational materials. In the longer run it was hoped that the TRC would function as a model for other communities concerned with rental housing problems. Initial start-up funds, $750, were provided by the Michigan Youth Politlos Institute in a contract for community educational ser­ vices. Office space was subleased from the CHS. Organisational work was carried out by Mark Charles, myself as assistant coordinator, and several other CHS members. After recruiting the first group of volunteers, a training program was scheduled In early October. Training primarily fo­ cused on the counseling functions of volunteers, with both cognitive materials and Interviewing skills emphasised. Soring the first term of 166 operation the new volunteers staffed the office five days a week and dealt with a wide variety of housing related problems from the greater Lansing area. In addition, volunteers completed drafts for a series of booklets dealing with security deposits, leases, and eviction problems. Finally, new funds were brought In through individual contributions and the showing of a slide-tape program In several HSU classes. By the end of the term the institutionalisation of the TRC was off to a pro­ mising start. The City Council Election campaign was of course the major focus of CHS energy. The need for both McNeil and Brown to be elected was underscored by the resignation of one of the two liberal PCH council­ man in late August and his replacement by a political moderate (State News. September 20). Once again. CHS members and other McNeil-Brown Campaign workers conducted a massive canvassing drive, focusing on liberal off-cam pits precincts as well as student dormitories. The can­ didates themselves went through a grueling schedule of community for­ ums. soap box rallies, and media interviews, in their attempt to se­ cure a majority constituency. Housing emerged as one of several key issues in the campaign, as McNeil and Brown articulated the findings of the HTF and explained how our 10-point housing program would alter the market situation(State News. October 31 and November 1)| interested voters were provided with a supplementary position paper entitled “The E.L. Housing Crisis1* drafted by the HIP (Appendix J). Finally, the housing issue was cited 189 as a coopall lag reason for people to vote for McNeil and Brown in a State Hews editorial endorsement(Appendix K). On November 6 t the CH3*s election hopes were confounded by a decisive victory by two older and more moderate candidates over McNeil and Brown. Incumbent Mary Sharp and political newcomer John Polonsky received 7*613 and 6,562 votes respectively compared with 5*32? and h-,335 votes for Brown and McNeil. Although the student turnout was heavier than in the August Primary, it was still a modest 30 percent compared with over 5° percent for non-students. In spite of tho large number of students registered to vote, it was evident that the vast majority refused to regard the election outcome as meaningfully af­ fecting their lives. Although Wsihad anticipated a higher degree of participation from the off-campus youth community, we were further confounded by precinct coo parloons which revealed little significant difference between on-campus and off-campus predominantly student pre­ cincts. Of those students who did vote there was the additional diaconoerting evidence that at least one-third refused to identify their interests with the candidates and programs endorsed by the CHS, their votes going to Sharp and Polomsky. Certainly, the myth of the student bloc vote was dispelled. The Sooial Action Experience in Retrospect It is still too soon to draw final conclusions about the Impact of the sooial action efforts of myself and others within the youth community 190 of East Lansing over the post three years* While X hare been able to document the transformation of research results into political destands and the rise In political influence of the CHS until the 1973 City Council Election* I cannot point to any major Institutional ohange that was brought about by our collective efforts. What renalns to be seen is whether the momentum generated in the past few years can be continued by the CHS or regenerated by a new sooial action coalition. The successful emergence of the TRC as an institution does not in Itself threaten to alter in a fundamental way the landlordtenant relationship in the youth community rental housing market. In its short history the TRC has functioned an a wore conventional soc­ ial service institution providing clients with alternative ways of resolving immediate problems within the existing system. In addition to counseling, the TRC continues to carry out research and publication functions but so far has refrained from lobbying activity or tenant organising. The actual reasons for the CHS election defeat are difficult to Identify, Obviously the composition of the youth-student constituency had changed greatly froa 1971 to 1973* both in terms of normal turn­ over and philosophical outlook. Changes had also taken place in the decline of certain national unifying issues for young adults such as their direct participation in the Indochina War, The appeal of the youth radical political movement may also have been undercut by the internal fragmentation of groups such as SDS, with the CHS becoming 191 identified by younger students as slaply another "old* radical, group that would not live up to Its basic goals* On the local level the reasons for defeat nay have been largely tactical* the CHS choose the wrong set of Issues or endorsed candidates who did not generate enough personal appeal* Certainly, the CHS election strategy implied a higher level of political involvement froa voters than is normally expected by traditional campaign organiserst it was expected that peo­ ple would make choices largely on the issues and programs presented, as reinforced by the CHS*s three year record of research and social action. Such assumptions are fundamentally challenged by the outcome of the election itself. Those of us associated with the 10-point housing program were especially disappointed in the election outcome. Considerable opti­ mism had been fostered late In the summer by the appointment of a predominantly liberal City Housing Commission which was viewed as a concession to our lobbying efforts* in fact two of our own people had succeeded in being appointed members. Given an election victory and the establishment of the TRC, we had anticipated being in posi­ tion to help the city implement major portions of the 10-point pro­ gram, Given the new city council composition, our future options ap­ peared to be confined to another cycle of independent researoh and social action. Still, there were basic differences between where we found ourselves as housing activists in 1973 compared to 1971* The TRC did function as a repository for on-going research so there would 192 be a firm base of experience to structure future projects. By putting more energy into further developing the TRC, we could at least ensure that this experience would not be lost to the youth community even if certain key indlvidtials such as Mark Charles and myself left East Lans­ ing before the next city election. Still, like other CHS members we felt discouraged try the election results and began to realize how dif­ ficult it could be to organize and maintain a constituency for change in a university town. In final summary, three phases of the Problem-Solver Change Model (Figure 23) were implemented in East Lansing during the study period. Host successful has been the documentation of conditions in the youth community rental housing market with the cooperation of many residents in the process. Furthermore, the housing team was highly successful in publicizing research results, criticisms of the existing market situa­ tion, and recommendations for needed change. Finally, the social ac­ tion coalition was unsuccessful in organizing enough political pres­ sure by the 1973 City Council Election to begin Implementing the 10point housing program, although it seems fair to say a strong chal­ lenge was made to those in control of the municipal government. While it is difficult to assess the long term impact of this experience, the attempt as documented in this chapter represents an explicit example of research and indigenous social action. Further thoughts on the general success of the Problem-Solver Change Model are deferred until Chapter VII, CHAPTER VII SUMMARY AND CONCLUSIONS This chapter summarises the major findings of this study with regard toi 1• the empirical validity of rental price discrimination and oligopoliaitic con­ trol in the youth community rental housing market 2, the appropriateness of the youth ghetto analogy 3. the overall success of the indigenous social action approach In addition, recommendations for further research and social action are presented. Rent Discrimination and Oligopolistic Control The analytical results from the regression analysis consistently verify the existence of substantial rent differentials associated with household composition in both the house sector and apartment sector of the rental market. The apparent rent mark-up for a youth-student house­ hold in the house sector is approximately 30^ or over $70 per month on the average* in the apartment sector the apparent mark-up is approxi­ mately 30^ or $60 per month. The basic question remains, however, what proportion of these observed differentials represent "excess profits" and to whom would such profits accrue. 193 19^ There are throe basic ways that rental price differentials could be accounted fort 1. as increased operating costs directly related to servicing youth-student households 2■ as Increased operating costs due to exchange value manipulation by present or previous landlord, profits accruing to landlord and supporting financial institutions as excess profits accruing directly to land­ lord as Increased cash flow The first situation generates no excess profits to the landlords or the supporting financial Institutions, In the present study consider­ able effort has been made to control for normal operating expenses. The rent differentials being discussed have explanatory power beyond that accounted for by density of use, provision of many housing ser­ vices, and transiency. It might be argued that other potential sources of Increased operating costs related to household composition have not been adequately controlled for, in particular loss of Income related to vacancies and uncollected doDts. However, landlords in the youth community rental housing market generally collect a security deposit equal to at least one month's rent, with the explicit understanding that any extra expensos which are tenant caused, above normal wear and tear, can be deducted from this deposit. According to legislative find­ ings from a series of hearings conducted in the spring of 1972, It was evident that many landlords were in fact utilizing the security deposit, plus interest, for normal business expenses. Given the operating costs already controlled for, it seems unlikely that the average youth-student 195 household would Incur costs that would, exceed the normal Becurlty deposit. It would seem inappropriate, then, to attempt to justify these observed rent differentials as a necessary business practice related to servicing a particular type of household. An alternative approach to evaluating rental price differentials would be to focus on the actual maintenance costs for servicing units occupied try the youth-student group. Do landlords actually budget extra operating funds to maintain units at a standard level of resi­ dential quality? Alternatively, do they Invest the rent differentials in new construction while reducing the rents in deteriorating units so as to reflect a decline in use value? If the financial accounting does not balance, there would be excess profit accruing to the landlord as increased cash flow. Given the reluctance of management firms to make public their financial records, it would be extremely difficult to verify the factual situation, unless the municipality were willing to make use of its subpoena power to produce management records. The second major explanation of rent differentials argues that some increased operating costs are directly related to exchange value manipulation by housing entrepreneurs, operating costs which are un­ related to any extra costs associated with servicing particular tenant groups. As pointed out In Chapter III, it is in the financial interests of a landlord to remortgage or resell property at frequent intervals. Through remortgaging he can retrieve a major portion of the accumulated equity for alternative investment while through re-sale he can receive 196 full market value, pay off his former mortgage, and reinvest in new property i this new investment is in turn sheltered from taxation by a new depreciation schedule and interest payments. In a tight market situation such as prevails in the youth community rental housing mar­ ket, the exchange value of property tends to increase with each trans­ action, the profits being further protected by capital gains tax pro­ visions, In addition, mortgage interest rates in recent years for all housing financing have tended to increase. Both tendencies "justify" higher rents to the next group of tenants, with no necessary improve­ ment in the use value of the tinit, since no excess profits would ap­ pear in the annual operating statement. While the landlords and real estate speculators are the primary beneficiaries of the tax shelters and Increased exchange value, the supporting financial institutions are the ones who bonefit the most from the practice of remortgaging. The net result has been higher rents for tenants and higher total pro­ fits divided between landlords and mortgage lending institutions. The implication is that part of the observed rent differentials may be due to increased exchange value manipulation in the youth community rental housing market. It could be argued that the rent differentials associated with household composition represent only a portion of the total profits extracted from the youth-student group. In the above discussion I have assumed that my block residential variables, as verified in the Factor Model, control for real differences in use value to block 197 residents, rather than differences in sutmarket exchange value. Further research would be required before the validity of con­ tentions about exchange value manipulation could be established. One approach would be to examine city assessor files over a specific time period, comparing the level of activity and market value changes botween student and non-student apartment complexes. Information relat­ ing to the actual financing conditions would be more difficult to obtain unless a research team were capable of assuming the role of prospective buyers, A secondary line of research would be to control more precisely for differences in block, or block group, residential quality. The third major explanation of rent differentials focuses on the direct and indirect rent discrimination by landlords against youthstudent tenants. In this situation landlords are assumed to take ad­ vantage of the "captive" nature of the youth community submarket, charging higher rents than could be justified by increased service or financing costs f in this instance excess profit would appear in the annual operating statement as an extra large cash flow. With re­ spect to East Lansing, there would seem to be few examples of indi­ vidual landlords in the rental house sector actually charging differ­ ent rents to different tenant groups. What seems more likely is that landlords specialize in which submarkets they choose to operate and charge the going "group" rate; the net result in either event can be excess profits to the landlords. In the apartment sector, there are 198 Indications revealed in the regression analysis that management com­ panies have charged different rates for tenant groups even within the same apartment complex{ a follow-up survey would be in order to deter­ mine if in fact special services were provided by the management to the youth-student group. Without a new phase of research involving a detailed study of the cost structure of each basic type of rental unit, it is impossible to determine the proportion of the observed rent differentials that might be accounted for by situations two and three. It seems likely that the larger amount would be related to the manipulation of exchange value described in situation two. Since the locus of control is embedded at the institutional level, rent differentials stemming from exchange value manipulation would be difficult to modify in a new program of social action. In situation threo the landlord himself could be pres­ sured to reduce cash flow profits to more reasonable levels by either tenant collective bargaining techniques or the enactment of municipal rent control. The second major research finding was the confirmation of the ex­ istence of oligopolistic control within the youth community rental housing market, particularly in the apartment sector. One of the basic conditions of Machlup's classification of oligopolies, described in Table 4, was met when it was established that over 50 percent of the apartment units were under the control of eight management firms. Fur­ thermore, the regression analysis revealed that larger firms tended to 199 charge higher rent In both the rental house and apartment sectors, even after rental situation was controlled for by household composition and base of the rent structure. In the rental house sector a rent differ­ ential of 12% or $30 per month was observed between what largo and small landlords charged for the average unit. In the apartment sector a more modest rent differential of or $10 per month was observed between what large and small management firms charged for the average unit. Given the previous rent differentials associated with household composi­ tion, it would be difficult to justify further positive rent differ­ entials associated with increased scale of management operation. In fact there would be theoretical grounds for anticipating a negative rent differential, related to savings generated from the economics of large scale operation. As In the previous discussion of household rent differentials, It would be difficult to determine to whom excoss profits would accrue but there would be little doubt of their existence. Little information was systematically collected on the type of oli­ gopolistic control practiced in the study area, in terms of the degree of centralized decision making. Such information might be obtained from interviews with apartment management firm employees or friendly business­ men | certainly, one could not expect much cooperation from the heads of major firms. A time study might identify a pattern of price leadership, although one would have to take care to control for changes in housing stock ownership. My expectation would be that several larger management firms coordinate their pricing and leasing policies as a cartel(Table 4i 200 II-A), with other firms adjusting their policies in more informal fashion* The 10-point housing program cf the McNeil-Brown Campaign would have attempted to alter the structure of the youth community rental housing market, so as to ensure the provision of more adequate hous­ ing with reasonable rents and living conditions(Appendix F). The elimination of zoning discrimination against unrelated individuals occupying rental houses in specific city areas would have functioned to expand the potential territory of youth-student settlement, re­ lieving pressure on housing in the youth community core area. Further spatial modifications of an explicitly redistributive nature were anticipated in the call for a revision of the City Comprehensive Plan. The rent control provision would have rolled back rents to the 1972 level and made further adjustments on a case basis, utilizing regres­ sion analysis, to eliminate youth-student rent differentials. It was further anticipated that faced with lower rates of return, that some landlords would choose to sell out at a loss, making property avail­ able at decreased exchange value to non-profit housing cooperatives. Since the existing housing cooperatives often experienced difficulty in securing mortgage funds from conventional sources, another provi­ sion recommended that the City use its borrowing power, In the form of self-liquidating municipal bonds, to secure sufficient funds to func­ tion as a mortgage agent to housing cooperatives. Other points in the program were intended to help ensure the maintenance and rehabilitation 201 of tho existing housing stock, and to encourage new forms of construc­ tion. All parts of this "basic program could benefit from further re­ search, focused in particular on the recent experience of housing re­ formers in other major university towns such as Ann Arbor, Berkeley, Cambridge, Davis, and Madison. However, a crucial objective for social action in East Lansing still remains, the mobilization of the constitu­ ent community itself as an effective political force. Only in this way can housing activists be placed in decision making positions to begin resolving the longer term problems involved in institutionalizing major housing reforms. The Youth Ghetto Analogy The youth ghetto analogy is reinforced by several systemic regu­ larities in the study area as set forth in the Matrix of Territorial Clusterlng(Figure 2). Economically, the residents of the youth commun­ ity appear to be exploited as tenants. The degree of economic exploita­ tion is less evident in the youth ghetto than that documented in studies of the contemporary central city ghetto. Still, there is a sharp con­ trast between the housing conditions of the youth-student group and other socio-econcmic groups in the surrounding East Lansing area. The residential mobility of youth-student tenants is regulated by a number of institutional and economic constraints, which combine to effectively confine the vast majority of than to the area adjacent to the MSU Campus. On the institutional level there are city zoning 202 ordinances which explicitly attempt to screen out youth-student tenants from particular neighborhoods and restrict new apartment construction to other areas of the city. In fact some apartment firms act to further restrict the youth-student submarket by exclusionary occupancy policies. Finally, the low income and student status of many young adults combine to confine their residential choice to walking or bicycling distance from the M3U Campus, As with conventional ghettoites, there appears to be a reluctance on the part of surrounding non-ghetto groups to share social space with the youth-student group. Even so, the evident resi­ dential segregation is not as extreme as that of ghettoites in the cen­ tral cities. Politically, the youth community has been dominated by the poli­ cies of non-student groups throughout its brief history. The rise of student activism In the 1960*s provoked a type of response from both the university and municipality that was quite similar in form to the repression of urban ghetto unrest, most clearly manifested at Kent State University. However, the position of the youth community may change quite rapidly along this dimension in the 19?0*s. The enfran­ chisement of young adults over 18 years old and the relaxation of resi­ dency requirements provides tho basis for a more literal majority con­ stituency in many university towns. Finally, the youth-student group appears distinct in its psycho­ logical orientation to the socio-economic realities of Its residential environment. With regard to the Matrix of Social Mobility(Figure 3)» 203 tho vast majority of youth ghettoites would be represented by Cell XX-A, the most hopeful and upwardly mobile group. Such a classification is realistic given that almost all do succeed in migrating out of the sub­ system in four years or so, generally securing Jobs with higher pay and social status. They leave behind, however, a socio-economic subsystem that continues to operate in many other respects like a conventional urban ghetto. The youth ghetto analogy seems useful in two ways. First of all in the present research it provided an overall planning prospective. Second, it is consistent with the analysis of a particular youthstudent rental housing market, revealing as it did a pattern of resi­ dential segregation and price discrimination with respect to the youthstudf-nt tenant group. However, the present research provides only partial verification of the youth ghetto analogy. I would hope that other researchers would focus their efforts in equally rigorous fas­ hion on the subsystem's other basic dimensions. The Indigenous Social Action Approach The social action portion of the present study met with mixed success as applied in East Lansing. Although major phases of the Problem-Solver Change Model(Figure 23) were implemented, as a social action coalition we were unsuccessful in institutionalizing major housing reform at tho municipal level. More successful were those components of the model that dealt with the identification of major 20** community problems, their analysis, and the formulation of specific programs for bringing about needed change. Documentation has also been provided for the major steps in the process of group formation within the social action coalition and political interaction between this coalition and other interest groups throughout the city. The action steps of the CHS were structured to mobilize support from the youth-student constituency. The core group of the CHS Itself was recruited from the large pool of people who were involved in vari­ ous phases of research and analysis. The CHS also generated consider­ able community feedback in the form of leaflets, reports, position papers, and oral presentations at public meetings. In addition the CHS was successful in having its views published In the established newspaper media in the form of articles, points of view, and even editorial endorsements. Finally, the activities associated with the 1973 City Council Election functioned to publicize further the basic critique and alternative programs of the CHS in more extensive form. It is difficult to assess what impact this feedback had on youthstudent consciousness, especially considering that programs other than housing were also being publicized ty the CHS. No surveys were conducted, for example, to measure changes in consciousness during the study period. The major test employed was pragmatici the outcome of the City Council Election. The failure of the CHS to win in that election confirmed in unambiguous terms the difficulty of mobilizing and maintaining sufficient support from the youth-student constituency 205 to begin Implementing programs at the municipal level. That the CHS came as close to winning the election as has been documented does attest to the fact that considerable organizing work had been done but doe3 not explain, or mitigate for that matter, the overall election outcome. Some tenatlve explanations were briefly discussed in the previ­ ous chapter, relating to the election outcome. The initial series of questions for further research would Include the following! 1. 2. 3. To what extent did philosophical attitudes of young adults change In the direction of more moderate political behavior from 1970 to 1973? What was the perception by young adults of CHS candidates and programs in the 1973 City Council Election, compared with the perception of other candidates and programs? What was the effect of particular campaign tactics utilized by the CHS and other groups to mobilize the youth-student vote? These are the questions that CHS members have spent considerable time discussing in the months following the election, realizing that tho adequacy of such analysis may determine the success or failure of the next phase of social action. The general question that is confronted in this study is how we as geographers and citizen scholars might use the knowledge gained from field research and other analytical techiques to propose and help Implement structural change which will bring about more equit­ able socio-economic conditions in disadvantaged urban Bubregions. 206 For this reason the conceptualization of the youth community as a type of ghetto 1b important as is the empirical description of the youthstudent rental housing market as one aspect of that urban subsystem* The social action approach itself represents an explicit attempt to go beyond the basic positivist paradigm of merely establishing the "truth status" of alternative hypotheses. The social objective of thiB study was to set in motion components of a 10-point housing program so as to invalidate rental price discrimination and landlord oligopoly as ex­ planatory factors. While the institutionalization of major housing re­ form has not yet been achieved at the municipal level In the study area, the present work does provide a firm foundation for future efforts. In addition the present work provides Insight to others interested in adopting a dual approach of research and social action. The normative concept of social justice has only recently emerged as an explicit concern of geographers, in response to recurrent crises in tho physical and social environment. The challenge will be to trans­ form thiB concern into programs which will alter the course of our pre­ sent reality to a more socially equitable state. Clearly, this will not be a challenge that geographers will resolve independently of the efforts of other concerned citizens. However, I would hope that more of us would become directly involved in all phases of the process. As has been sug­ gested by Losch, Bunge, Harvey, and Olsson, we must be more concerned with what should be than evaluating what is. EXPLANATORY FOOTNOTES See, for example, the statistical reeoarch on urban land uaeby Bartholaaew(l 955)» and Nledercorn and Hearle(l96*i-) as well as work on the functional claselfication of cites by Harris (l9^3)» Nelson(l955)» and Klng(l966), ^ For a critique of welfare economics see Glntls(l9?0| also see the commentary on the establlshaent bias built Into plan­ ning nethodology by 01sson(l97^). ^ By Hterritorially clustered" I Mean to make explicit that the social situation could be either voluntary or involuntaryi because of the current ambiguous use of the term "segregated" I have followed Lofland(l96?) In the employment of a more neutral term. ^ See for example the work of Lleberson(l963) and Ward (1968) for descriptions of North American ghettos. e. This situation has been amply documented by research conducted by Caplovits(1963), the Federal Trade Commission(1969). Steralieb(l966), and Sturdlvant(l969)■ ^ For a critique of the Glazer-ttoynlhan thesis, see dis­ cussion by Tabb(i970, 81-10*0 and Valentine(1968, 21-^2). rr For example, see evidence cited by Kain(l968) and the K e m o r Commission Report(1968). Q This model is adapted from a model of colonialism put forth by Horvath(1972). o For example, see the accounts of life In and around the medieval universities by Schachner(l938) and Wieruszow8kl(l966)• ^ For a discussion of the "community threshold" concept see Krim(l969» 16-18). 20? 208 ^ See, for example, tho discussion by the Rowntreem(l968, 179-183) and by Flacks(i971, 82-90). 3oo tho Rowntrees* orltique(l968, 172-176) of tho purely "generational conflict" thesis| a b o t o complete presenta­ tion of alternative views nay be found In two special issues of the Journal of Social Isaues(l969 and 1971) entitled "Alienated Youth" and "The New Loft and the Old." Flacks(l97l) has presented the most complete bibliography of the radical youth movement and related issues. In his analysis Lofland acknowledges being influenced by the work of Suttle(l968) on the inner-city slum and that of Heirich(l97l) on the Berkeley Free Speech demonstrations. Ill, See,for example,descriptions of this process by Hellweil(l973) and Lofland(l967). A recent U.S. Supreme Court rullng(April, 197**-) has upheld the authority of municipalities to discriminate against housing occupance by unrelated tenant households. My conceptual discussion ie structured after that of Harvey(l972-b, 3*6), which in turn was synthesized from the work of Horton Fried and Karl Polanyi, 17 Hy employment of the terms "use value" and "exchange value" is structured after that of Harvey(l9?2-b), his reinterpre­ tation of the terms as introduced by Adam Smith and subsequently articulated by Karl Marx. 1.8 For more general criticisms see Galbcralth(l967) and Hishan(l967)l for more specific discussion of how marginal, com­ petitive models of neo-classical economics break down when applied to contemporary urban regions see Bartor(l958). ^ Scitovsky(l951) indicates that when consumers know very little about the actual quality and attributes of consumer goods, they may accept price as an indicator of quality, providing a basis for excess profit by suppllersi see also discussion in People Before Property(1972 , 33-5*0 and Gordon(l97lF 355-363). 209 2** See discussion in People Before Property(37-54). 21 I M d - .(39-^7) • 22 As Harvey(1972-b, 19) has summarised the situationi It is generally true that the supply of low income housing is less than elastic(by which is meant that the supply does not respond rapidly according to changes in demand)while the supply of high Income housing is highly elastlc(a new demand generates a quick response). 2*^ see Engels* description of 19th century Manchester as quoted by Harvey(1972-a, 7“8). ok See Engels* discussion of rent exploitation in The Housing Question(1935 edition, 11-25)• 2“* For discussion of the model tenement movement, slum clearance, and uniform building codes in the late 19th century see Cordisco(l973)t Friedman(l968), and Velller(l920)i Engels(l935 edi­ tion) provides critical discussion of such programs. See,for example,discussion by Baran and 3weezey(l9&>f 289-300), Gordon(1971 * 355“362), and Harvey(l972-a and 1972-b). 2^ See the discussion by Stone(l972) and Harvey(1972-b)• 28 For a review of the pro's and con's of the effective­ ness of the process of Mfilter in g*1, see Edel(l972, 204-21*4-) and Lansing et al(l970). 29 In spite of the white exodus to the suburbs and de­ creases in the rate of rural-urban migration, housing demand in the central cites has continued to Increase due to natural increase within the Indigenous black population combined with the acclorated deterioration and abandonment of housing stock. 210 See especially articles by Joh Kainj in geography see discussion by Davies and Huff(l9?2), For a discussion of alternative operating strategies practiced by central city landlords* see Sternlieb(l966)• For a discussion of the impact of “red lining" with respect to the welfare of central city households, see Stone(1972) and Harvey(l9?2-b, **4-45)* ^ See research by Sternlieb(l966), Lowry(l960), Smolensky et ai(l968) , and Sturdivant(l969) , ^ Basic statistics were collected by the City Planning Department, East Lansing, Michigan. I have adopted the City Planning Department* s practice of standardizing the capacity of group housing structures by setting three residents equal to one dwelling unit, based on average apart­ ment densities in the city, 36 Special thanks to Ronald Horvath and John Loikow for organizing the work team that plotted the I960, 1965, and 1970 stu­ dent distributionsf Loikow also programmed the computer base maps from which the present series of population maps were drafted, 37 Several zoning violations by unrelated tenant households were followed up by the City at the instigation of the Bailey Home­ owners Association, For a discussion of the "lnvasion-succesalon" and "tip­ ping point" models as they apply to residential transition between one housing group and another within urban regions, see Crodzins (1958), Laurenti(l960), Taeuber and Taeuber(l965) and various arti­ cles by Wolf(1957, I960, 1963, 1965). 211 ^ Tho ambivalence of the liberal position on tho basic question of socio-economic segregation Is expressed by McEntlrei It la ono thing to ask people of the white middle close to share their neighborhoods with nonwhites of similar income,educational level,and social outlook,It Is quite a dif­ ferent thing to ask them to associate as neighbors with people of lower Income, edu­ cation, and cultural standards-3ocloeconcalc segregation Is In no way Inconsistent with racial lntegratlonTTl960,355.emphasis added) hn Such an action was also Initiated by the Red Cedar Community Association In 1970, with the City going to court to evict tho tenants(State News, May 3, 1974), 41 The source for the average else of rental households In houses and apartments was my own 1972 survey. IlO Special thanks is due to such enduring members of the youth community as Sandra Jenkins, Nelson Brown, and Rick Kibbey for supplying details about East Lansing's political history In the 1960's. J According to a study by the CHS (197*0, the vast majority of City Council members as well as members of the Planning Commission have been active businessmen, 44 Information taken from a draft copy of market survey re­ port by Robert Benko, Michigan State Housing Development Authority, based on telephone interviews of apartment management companies. 45 According to the U.S. Department of Housing and Urban Development, a vacancy rate Is considered indicative of an emer­ gency housing situationt such a condition was reported for East Lansing in the 1970 U.S. Housing Census, 46 Two additional criteria were used to set these bound­ aries i U.S. Census Block Groups and general contiguity. 212 ^ This work has been summarized in Ipcar(MRent Discrimlnatlon In the East Lansing Student Ghetto," 1971). US Special thanks are due to Maryellen McSweeney for her helpful advice in the determination of sample size. Itq Other examples of rental housing regression analysis would include studies by Haugen and Heins(l969)» Harris et al(l968), and Laphan(l971)I for a review and critique of houBing analytical research see Stengel(l970, 95“20U)| I found Kmenta(l97l) the most useful general reference for interpretation of regression results. *50 For an extended discussion of alternative concepts of rent, see various articles in Antlpode. Volume 6, #1, 1974. <51 ^ The re-assessment survey was conducted by Allied Ap­ praisal Company, Bowling Green, Ohio. 5^ In particular see Kain(l962) in MThe Joumey-to-Work as a Determinant of Residential Site Selection," work which a number of urban transportation geographers hare followed up. A more sophisticated attempt to measure the quality of the residential environment, involving factor and regression analysis, is demonstrated by Kain and Qulgley(l970, 532-5^ ) * 54 Alternative specifications of Young Adult resulted in distinct differences in simple correlation with Contract Rent! 18-30 years old - r - .28 18-25 years old - r - .45 55 Attempts to specify a landlord residence variable were abandoned when It became clear that there were dlchotomous types of both local and absentee landlords) it proved Impossible to obtain enough Information on all landlords so as to be able to specify re­ levant sets of dummy variables. 56 "Stepwise Deletion of Variables from a Least Squares Equation,M STAT Series Description Ho. 8, Michigan State University Agricultural Experiment Station, East Lansing, Michigan. 213 Tho average sample unit Is defined an a unit In which «*11 explanatory variables are evaluated at their means. If the simple correlation coefficients of Landlord Hold­ ings with respect to Contract Rent are compar©di Stratum I Stratum II Linear 0.16 0.25 L ° K l o ( I'ogio ( X ^ 0,28 0,36 Other specifications such as Square Root*NaturalLog, and Log^g gen­ erated slight improvements but not to the same degree. 59 A major difference In household composition between Stratum I and II is a higher percentage of wholly female households in Stratus H i 39.7/6 compared with 18,1^, As I view it the primary utility of factor analysis is in reclassifying a large set of variables into a smaller set of more general and statistically uncorrelated factors, rather than the test­ ing of a theoretical structure. ^ For both strata if one of the landlord variables is de­ leted from the factor analysis a single landlord factor no longer emerges, the variable loading weakly on several other factors. 6? See,for example the discussion by Cliff and Ord(l970), Gould(l970), and Granger(l969) of spatial autocorrelation. ^ Grouping programs such as "cluster analysis’* and "link­ age analysis" might be fruitfully applied to such a problem(GreerWootten, 1972). 6k I am especially Indebted to Paul Emery for documenting much of the historical evolution of tho CHS. ^ Examples of New Community projects would include tho Green Earth Food Co-op, the Han and Nature Book Store, the Seeds for Change Program, Electronics Repair Co-op, and several other attempts to foster counter institutions directly controlled by and benefiting the youth community. 214 fJL Chuck Will had formed an alliance with another young candidate# Ely g o Eisenberg, in July. ^ One class was front geography# tho other from systems engineeringt special thanks are expressed to the members of these classes# 68 This work was completed with the continued assistance of volunteers from the Organising Committee for the Public Interest Research Group In Michigan# BIBLIOGRAPHY BIBLIOGRAPHY Adams, J.S. 1972 "The Geography of Riots and Civil Disorders in the 19oO,s,M ECONOMIC GEOGRAPHY, *4-8 (l)i 24-42. 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Miehan, E.J. 1967 THE COST OP ECONOMIC GROWTH, New Yorki Frederick A. Praeger. Morrill, R.L, 1965 "Tho Negro Ghetto," GEOGRAPHICAL REVIEW, 55 (3)* 339*361. Morrill, R.L and P. Kolley 1969 "Optimal Allocation of Services," ANNALS OP REGIONAL SCIENCE, 3i 55-66. Morrill, R.L. and E. Vohlenberg 1971 TOE GEOGRAPHY OP POVERTY, Now York* McGraw-Hill. Muth, R.F. 1969 CITIES AND HOUSING, Chicago* University of Chicago Press. Nelson, H.J. 1955 HA Service Classification of American Cities," ECONOMIC GEO­ GRAPHY, 311 189-210. N ledorc o m , J.H. and E.F.R. Hearle 1964 "Recent Land-Uoo Trends in Forty-Eight Large American Cities," LAND ECONOMICS, 40 (l)i 105-109. Olsson, G. 1974 "Servitude and Inequality in Spatial Planning," ANTIPODE, 6 (l)i 16-21. Park, R.E., E.W. Burgess, and R.D. McKenzie (eds.) 1929 THE CITY, Chicagoi University of Chicago Press. Peattie, L. 1968 "Reflections on Advocacy Planning," JOURNAL OF TOE AMERICAN INSTITUTE OF PLANNERS, 341 80-88. Peet, R. (ed.) 1972 GEOGRAPHICAL PERSPECTIVES OH AMERICAN POVERTY AND SOCIAL WELL­ BEING, Toronto1 Toronto University Press. 22 4 Pred, A. 1964 “The Intrametropolitan Location of American Manufacturing,*' ANNALS OF THE ASSOCIATION OF AMERICAN GEOGRAPHERS, 541 165-100. Rapkln, C. 1966 "Price Discrimination Against Negroes In the Rental Housing Harket," ESSAYS IN URBAN LAND ECONOMICS* in Honor of the 65th Birthday of Leo Grebler, Los Angeles* University of California Press, 335“345* Rasmussen, K.R* 1968 "The Multi-Ordered Urban Areai A Ghetto," PHYU3N, 29 (3)» 202290. Rees, P.H. 1971 "Factorial Ecology* An Extended Definition, Survey, and Critique of the Field," ECONOMIC GEOGRAPHY, 47 (2)* 220-233. Reiner, T.A. 1972 "Racial Segregation* A Comment," JOURNAL OF REGIONAL SCIENCE, 12 (1)» 137-148. Rose, H.M. I97O "The Development of an Urban Subeystem1 The Case of the Negro Ghetto," ANNALS OF THE ASSOCIATION OF AMERICAN GEOGRAPHERS, 60 (l)l 1-17. Rose, H.M. 1972 "The Spatial Development of Black Residential Subsystems," ECONOMIC GEOGRAPHY, 48 (l)* 43-65, Rose, H.M. 1969 "Social Processes in the City* Race and Residential Choice," COMMISSION ON COLLEGE GEOGRAPHY, RESOURCE PAPER No. 6 , Wash­ ington, D.C.* Association of American Geographers. Roszak, T, 1969 THE MAKING OF A COUNTER CULTURE, Garden City, New York* Double­ day and Company. Rothman, J. 1968 "The Ghetto Makers," in J.F. Kain (ed.) RACE AND POVERTY, Engle­ wood, New Jersey* Prentice-Hall, 122-127. 225 Rowntree, J. and M. Rowntree 1968 "The Political Economy of Youth," OUR GENERATION, 6-?» 155*195. Schachner, N, 1938 TOE MEDIEVAL UNIVERSITIES, Now Yorki Stokoa. Scitovsky, T. 1951 “Tho Stato of Welfare Economics," AMERICAN ECONOMIC REVIEW, kl (3)1 303-315Smlth, A. 1961 od. AN INQUIRY INTO THE NATURE AND CAUSE OF THE WEALTH OF NATIONS, B. Masliah(ed.), Indianapoliot Bobba-Merill. 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Wheeler, J.O. 1966 "Work-Trip Length and the Ghetto," LAND ECONOMICS, 44* 107“ 112. W ieruszowsk i, H . 1966 THE MEDIEVAL UNIVERSITY, Princeton, New Jersey* D. Van Nostrand Company. Williams, A. 1967 "Factor Analysis1 Principal Components and Orthogonal Rotations," TECHNICAL REPORT No. 34, Coraputor Institute for Social Science Research, East Lansing, Michigan. 228 Willis, J.U. 1950 MA Short History of Rent Control Laws," CORNELL LAW QUARTERLY, 36 (l)i 5^- 92. Wilson, J.Q. (ed.) 1966 URBAN RENEWAL* THE RECORD AND THE CONTROVERSY, Cambridge, Mass­ achusetts! The M.I.T. Press. Wirth, L. 1956 THE GHETTO, Chicagoi University of Chicago Press. Wisner, B. 1970 "Advocacy and Geography* The Case of Boston*s Urban Planning Aid," ANTIPODE, 2 (l)i 25~29. Wolf, E.P. i960 "Racial Transition in a Middle-Class Area,” JOURNAL OF INTER­ GROUP RELATIONS, it 79-80. Wolf, E.P. 1965 "The Baxter Area* A New Trend in Neighborhood Changes?" PHYLON, 26* 3 ^ 3 5 3 . 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Zelder, R.E. 1970 "Racial Segregation in Urban Housing Markets," JOURNAL OF REGIONAL SCIENCE, lOi 93**105. Zelinsky, W, 1970 "Beyond the Exponential, the Role of Geography In the Great Transition," ECONOMIC GEOGRAPHY, 46i *+98-535. a p p e n d ic e s APPENDIX A Interviewers* ____________________________ East Lansing Rent Survey Geography Department - MSU ___________________ ____ ___________________ ______ Spring Term _________ \9?2 Part I s General Background on the Household* record information in the appropriate cell in the matrix below. 1. How many people presently occupy this rental unit full time? 2. What is the sex of each household member? 3. In what year was each one b o m (approximate if necessary)? Which of the following categories best describes the marital status of each member? (write number in cell) 1 - Harried 2 ■ Never Harried 5. 5 " Divorced 6 - Don't Know Which of the following categories best described the primary occupation of household members? (write number in cell) 1 2 3 4 5 6 7 6. 3 “ Separated 4 ™ Widowed " " “ “ — “ Professional and Technical Managers, Officials 4Proprietors Clerical Workers Sales Workers Craftsmen and Foremen Operatives Laborers 8 9 10 11 12 13 14 “ General Service Workers " Private Service Workers - Part-Time ■ Retired " Unemployed “ Student *■Don't Know Are any of the above associated with HSU? If so, how would you charac­ terise their status? 1 ■ Administrator 2 - Faculty 3 “ Staff 4 5 6 - Graduate Student “ Undergraduate - Don't Know 7. Was thelast previous residence of each member inside or outside the City of East Lansing, excluding vacation periods? (Campus is inside) 8. At that time, In which type of dwelling unit did each member reside? 1 - Single-Family House 2 ■ Two-Family Structure 3 - Apartment Structure 9. 4 - Greek or Co-op 5 “ Dormitory 6 - Trailer 7 ■ Other (write in) 8 ■ Don't Know In whatyear did each member move into this dwelling? (aaproxlmate) £. Persons 2. Sex 3. Tear Born 4. Marital Status 5* Occupation #1 0 MSU Status 7. Previous Residence 8, Previous Type of EU 9. Tear Moved In 230 231 Part XI. 1. Information about the Housing Structure What type of building is this(write number In cell) 1 - Single-Family 2 - Two-Family 3 Structure with 3 or more apts. ^ * Other -j--- . J___ | 2. How many major rooma are there in this unit? 3. How Many bathrooms are there? h. Is this buildingi ......... .. 1 «• Owner-occupied without tenants? 2 - Owner-occupied with tenants? I I 3 " Wholly occupied by tenants?------------------------- *---- ' Part III. Information About Rental Unlts(skip for others) 1. What is the name of your landlord(reality firm)? _____ 2. What is his/her address(home address preferred, even city or state is of help) 3. Conditionsof the Lease (a) Do you have a written lease? (Yes, No) (b) What (c) What is tho total monthly rent (d) What (months) ...... ......... for yourunit? ............ is the total amount of the securitydeposit? (c) since last fall haa there been interuptlons of service (more than 1hr) or major damage to some­ thing in the houBe? Furniture X X X X X X X . j (Other) Air Conditioner X Garbage Disposa^ X Washer/Dryer Electricity X 3 Dish Washer (b) which utilities are included in your rent? Water (a) which of these are provided by landlord? Heat Indicate presence or positive response with a check mark Refrigerator Information about Housing Services Stove Part IV. is the duration of lease? .... . 232 Part V. 1. Household Xncone Into which of the following general categories does the total annual Income of this household fall(including gifts, eholarships, etc,)? 1 2 3 4 ■* - $ 0 $ **>000 $ 8,000 $12,000 to $ 3,999 to $ 7,999 to $11,999 to $19,999 5 * $20,000and above 6 “■Don't know 7 - Refused i---\____ ReaCaber, the above categories are only general approximations. 2, Indivual information from respondent only, (a) What is your primary source of income (including gifts or financial support from other people if appropriate)? (b) What other Important sources of income might you have? ASK RESPONDENT IF HE/SHE WOULD LIKE A COPI OF A SUMMARY OF LAST YEAR'S REUT SURVEY WORK. Street Address ____________________________________ Apt, Ho, Census Block Ho. _______________________ Special. Remarksi __________________________________________ This questionnaire is to be returned tc Charles Ipear, Rm, 408 Natural Science Build in g-MSU, when completed. If you have any questions call 332-2659. Housing Task Force C o a l i t i o n fo r H u m a n D e c e m b e r 6, 1971 S u r vival APPENDIX B POSITION PAPER The P r o p o s e d P e r i p h e r a l R o u te : Its Irracf o n the I m m e d i a t e R o s i d e n f i n l E n v i r o n m e n t of E a s t Lons ir.g It is o u r p o s i t i o n t ha t + hu p r o p o s e d " P e r i p h e r a l R o u t e " is a d i r e c t t h r o a t t o t h o q u o l i t y of life in Cas1 L a n si ng , A t t e n t i o n h e r o is f o c u s e d u po n t h e r o u t e ' s a d v e r s e e f f e c t o n t h e r e s i d e n t i a l e n v i r o n m e n t , e s p e c i a l l y t h o s e a r e a s w h i c h a r e a d j a c e n t to t h i s r ou t e. I O u r d i s c u s s i o n is d i v i d e d into throe sections: t he d i r e c t r e p l a c e m e n t of r e s i d e n t i a l s p a c e by a u t o m o b i l e t e r r i t o r y a n d t he i m m e d i a +e c o n s e q u e n c e s , t ho s h o r t run s e c o n d a r y e f f e c t s of i n c r e a s e d t r a f f i c f l o w on the r e s i du a l r e s i d e n t i a l e n v i r o n m e n t a d j a c e n t to the p r o p o s e d r o u t e, a nd t w o long r un i m p l i c a t i o n s of t he p r o p o s e d r o u t e tho f u r t h e r c o n v e r s i o n of r e s i d e n t i a l land u s e t o c o m m e r c i a l a n d a u t o m o b l l e t e r r i t o r y a n d t ho s u b s e q u e n t e x p a n s i o n of rental h o u s i n g t o t h e n o r t h , e as t , and w e s t a r e a s of t he ci ty . Direct Residential R e p Inc o m o n t A c c o r d i n g to t he c i t y p l e a n i n g o f f i c e a p p r o x i m a t e l y t w e n t y - s i x r e s i ­ dential s t r u c t u r e s v:i I I be t o r n d o w n t o n a k o w a y for t h e p r o p o s e d route. A b o u t h al f t h e s e h o m e s a re listed a s o w n e r - o c c u p i e d a n d t h e r e s t a r e o c c u p i e d by t e n a n t s . Tho d a t a p r o v i d e d to us by t h e E a s t L a n s i n g R e n t S u r v e y i n d i c a t e t ha t a p p r o x i m a t e I y 123 p e o p l e will bo d i s p l a c e d by t he r e m o va I of h o u s i n g in the p a t h of t h e p r o p o s e d r o u t e a t o n e . ^ Furthermore, we e stimate that tho t ax p a y e r s of tin' c i t v will h a v e t o s p e n d at least $ 5 0 0 , 0 0 0 t o p u r c h a s e ail t ho p r o p e r t i e s a l o n g tho r o u t e , w i t h t he s u b s i d i a r y c o n s e q u e n c e t h a t t h e r e will be a d i r e d loss to t he t a x b a s e of t h o c i t y on t h e o r d e r of $ 1 3 , 0 0 0 per year. T h e c o n s t r u c t i o n c o s t s v/ould a d d a p p r o x i m a t e l y $ 1 6 ? , 5 0 0 t o t h e total p r i c e tag of t h e r o u te , a s c o n s e r v a t i v e l y e s t i m a t e d by t h e c i t y t r a f f i c engineers. The tab le below s umm arizes this information. Another direct effect of t h e p r o p o s e d r o u t e is t o r e p l a c e a b o u t o n e t h i r d of t h e V a l l e y C o u r t P a r k p la y s p a c e w i t h a u t o m o b i l e t e r r i t o r y . TABLE I H u m b e r of R e s i d e n t i a l H o m o s R e p l a c e d = 26 To ta l F l o o r S p a c e of t h e s e h o m e s = . 3 4 , 3 9 0 f t . ^ E s t i m a t e d H u m b e r of P e o p l e t o ho d i s p l a c e d = 123 Tot al A s s e s s e d V a l u e of S t r u c t u r e s & Lots = $ 1 2 4 , 3 0 0 E s t i m a t e d M a r k e t V a l u e of P a r c e l s : 4x$I 2 4 , 3 0 0 = $ 4 9 7 , 2 0 0 Tot al C o s t = $ 6 5 9 , 7 0 0 In f o c u s i n g on h o u s i n g w e d o n o t m e a n t o s u g g e s t t h a t t h e r e a r e n o t o t h e r p o w er f ul a r g u m e n t s a g a i n s t t h e p r o p o s e d r o ut e . A r g u m e n t s w h i c h s h o u l d be explored includo the en g i n e e r i n g a s s u m p t i o n s u n d e rly ing the p redicted traffic flows, t h e v i a b i l i t y of t h o " c o m m e r c i a l c o r e " t h e o r y Itself, a n d u s i n g t a x p ay or s* m o n e y t o p r o m o t e I n c r e a s e d c o m m e r c i a l a c t i v i t i e s w h i c h d o n o t s e r v e the n e e d s of o u r c o m m u n i t y . 2 According to tho the c i t y is a b o u t R e n t S u r v e y the a v o r a g n r e s i d e n t i a l d e n s i t y 2 9 0 f t 2 / p e r s o n , In t e r m s of f l o o r s p a c e . 233 In t h i s p a r t of The S hort Run S ec on da ry Effects T h e c o m p l e t i o n of t h o p e r i p h e r a l r o u t e will g e n e r a t e a n I n c r e a s e d f l o w of t r a f f i c w i t h i n t h e c i t y . The pro jected traffic flow along tho r o u t e , a c c o r d i n g t o e s t i m a t e s f r o m t h e c i t y p l a n n e r s , will be a p p r o x i m a t e l y 8 , 0 0 0 c a r s p e r d a y by 1973. It is I m p o r t a n t t o n o t e t h a t t h e p r o p o s e d r o u t e w o u l d h a v e n o g r a d e s e p a r a t i o n s , w o u l d b o o n s t r e e t level. The probable socondary effects would include the following c o n s e q u e n c e s ; I) c o n s i d e r a b l y I n c r e a s o d co n f l i c t between north*south bike and pedestr ian traffic with automobiles, 2) o m a r k e d I n c r e a s e In t h e n u m b e r of a c c i d e n t s , 3) a s u b s t a n t i a l I n c r e a s e In b o t h a i r a n d n o i s e p o l l u t i o n . T h e n e t o f f e c f w o u l d b e o d e c r e a s e In t h o d e s i r a b i l i t y of t h e a r e a s a d j a c e n t t o t h o p r o p o s e d r o u t e fo r r e s i d e n t i a l land use, w h i c h w o u l d be r e f l e c t e d by a d r o p In t h o m a r k e t v a l u e of t he p r o p e r t i e s . Wo w o u l d a l s o n o t e t h a t t h e r e w o u l d be a d e c r e u s o In q u a l i t y a nd s a f e t y of t h e i m m e d i a t e e n v i r o n m e n t s u r r o u n d i n g E a i I o y a nd C e n t r a l S c h o o l s , V a l l e y C o u r t Park, a s well as f o u r c h u r c h e s (see M a p I). In o r d e r t o e s t i m a t e t h e e x t e n t of t h o s e c o n d a r y e f f e c t s m e n t i o n e d a b o v e w e g a t h e r e d i n f o r m a t i o n o n a I I t ho h o u s i n g w i t h i n o n e b l o c k of t h e m a j o r a r t e r i e s . Hy this crite ria twen ty- six b l o c k s a r e m o s t d i r e c t l y a f f e c t e d , w h i c h c o n t a i n o v e r throe h u n d r e d r e s i d e n t i a l s t r u c t u r e s o w n e d o r r e n t e d by a b o u t t w e n t y - t h r e e h u n d r e d p e o p l e . Long Run_ t_m_p I ic a t ions In t h e long run, t h o c o n s t r u c t i o n of t h e P e r i p h e r a l R o u t e will h a v e at least t w o m a j o r c o n s e q u e n c e s . F i r s t , t h e r e Is t h e I f k l f h o o d of t h e f u r t h e r e x p a n s i o n of a u t o m o b i l e t e r r i t o r y I n t o n e w r e s i d e n t i a l a r e a s . For e x a m p l e , In t h e c i t y ' s M a s t e r P l a n t h e r e Is a p r o p o s a l t h a t A n n S t r e e t be e x t e n d e d liinadorn, c u t t i n g t h r o u g h s e ve r a l b l o c k s of r e l a t i v e l y p e a c e f u l r e s i ­ dential n e i g h b o r h o o d s . C e r t a i n l y It Is a l e g i t i m a t e q u e s t i o n t o a s k t h e c i t y p l a n n e r s h o w moiiy toe ld e n t s will b e d i s p l a c e d as a d i r e c t r e s u l t of t h e I m p l e ­ m e n t a t i o n of t h i s p r o p p e d e x t e n s i o n , a n d h o w m a n y will s u f f e r f r o m t h o s e c o n d a r y effects. S e c o n d , a s w e h a v e m e n t i o n e d a b o v e , t he I n c r e a s e d t r a f f i c f l o w will a l m o s t c e r t a i n l y r e s u l t in a d e c l i n e In t h o r e s i d e n t i a l h o u s i n g s t o c k In t h e c e n t r a l a r e a of t h e c i t y , s o u t h of t h o P e r i p h e r a l R o u t e . In t h e long run w e w o u l d e x p e c t t o s e e t h i s h o u s i n g t o r n d o w n b l o c k b y b l o c k a n d r e p l a c e d by c o m m e r c i a l s t r u c t u r e s . T h e r e a re n o p l a n s p r o s o n t l y f or I n s u r i n g t h a t a ny of t h i s h o u s i n g w o u l d b e r e p l a c e d by low c o s t a p a r t m e n t s t r u c t u r e s . If a p a r t m e n t s t r u c t u r e s a r e b u i l t by p r i v a t e i n v e s t o r s , it s e e m s lik e l y t h a t t h e r e n t s c h a r g e d will be c o m p a r a b l e t o o t h e r a p a r t m e n t s In t h e c it y ; t h i s m e a n s 20 t o 30j6 h i g h e r t h a n a p a r t m e n t s In a n y of t he s u r r o u n d i n g m e t r o p o l i t a n a r e a . ^ T h o n e t e f f e c t In t h e long r un f o r r e s i d e n t s w o u l d bo t h a t p e o p l e will b o d i s p l a c e d , o r p e o p l e like th em , a n d m a n y w ill h o v e t o s e a r c h o u t h o u s i n g In t h e b l o c k s f u r t h e r n o r t h , e a s t , a n d w e s t of t h e P e r i p h e r a l R o u t e . S i n c e m a n y of t h o s e r e s i d e n t s live o n f i x e d o r low i n c o m e s , s u c h a m o v e c a n o n l y a d v e r s e l y a f f e c t t h e i r e c o n o m i c s i t u a t i o n . In c o n c l u s i o n , w o w i s h t o e m p h a s i z e t h a t t h e c i t y p l a n n e r s a n d t r a f f i c e n g i n e e r s a r e c o n s t a n t l y r e f e r r i n g t o t h e n e c e s s i t y f o r fit r a d e - o f f s" t o be m a d e In a n y p l a n n i n g d e c i s i o n s . W o w o u l d like t h e m t o bo m u c h m o r e f r a n k a b o u t J u s t w h a t Is b e i n g t r a d e d o f f f or a P e r i p h e r a l R o u t e , a n d w h a t c r i t e r i a t h e y h a v e been usi ng t o m a k e such v a l u e Judgme n t s , O u r f e e l i n g Is t h a t w h e n t h o full c o s t s a r e m a d o k n o w n , t h e r e s i d e n t s of t h i s c i t y e n d t h e i r e l e c t e d r e p r e s e n t a t i v e s will t u r n d o w n t h e p r o p o s e d P e r i p h e r a l R o ut e. In e s t i m a t i n g t h i s p o p u l a t i o n w e a s s u m e d a n a v e r a g e of f i v e p e r s o n s p e r s i n g l e f a m i l y h o u s e , a n d if t h e s t r u c t u r e w a s s u b d i v i d e d w e c o n s e r v a t i v e l y e s t i m a t e d t w o p o o p l e p e r d w e l l i n g unit. 4 Robert Winter, Benko, 1971. Urban Planner, Michigan Housing Authority, survoy conducted In ELIZABE ajf S8f attfey School School Hi C ity Hail School Church Existing Parking & Proposed Areas I to APPENDIX C Housing Task Force Coalition for Human Survival October 7, 1972 POSITION PAPER The Proposed Housing Ordinancesi their impact on Rental Housing Conditions in East Lansing If the objective of the proposed City Housing Ordinances were to help insure that all tenants in East Lansing had access to adequate housing, with reasonable rents and living conditions, we would bo first to endorse their passage. After conducting our own survey research and studying the ordinances in detail for the past year, wo conclude that we cannot do so at this time. The major problems that the proposed housing commission will have to deal with are those of tenant occupied housing, rather than owner occupied housing. Our argument runs as follows* Given the position of landlords in the rental hous­ ing market, we maintain that the composition of the proposed Housing Commission must primarily reflect the interests of tenants. Control of the commission itself is a basic question to us all. Clearly, if we hope to bring about a redress of bargaining power between tenants and landlords there is a need to insure that a majority of voting com­ missioners be tenants* the category "tenant" of course includes a wide range of city residents from elderly retired people to off-campus stu­ dents. We further recommend that a research and administrative staff be provided which is directly responsible to the commission. Given the inflated rent structure of this city, we maintain that regulation of maintenance standards must be tied to some form of rent control. The bulk of the proposed ordinances focus on upgrading the quality of living conditions, chiefly through licensing procedures and periodic inspection. However, It seems likely to us that the costs of bringing existing housing up to licensing standards would be passed on to tenants in the form of even higher rents. If we are to avoid placing our low and fixed Income tenants at a further disadvantage, the City must begin to study the feasibility of a flexible rent control systemo Given the shortage of low priced housing in the city and people's basic right to have equal access to what is available, we are firmly opposed to all attempts to regulate the type of household that occupies a par­ ticular rent unit through the City monlng ordinance. 236 237 Both the existing and proposed zoning ordinances attempt to regulate the number of unrelated adults who can occupy a particular rental hous­ ing unit in certain areas of the cityt four people would be the maxi­ mum number proposed in single family or duplex dwelling units. We, too, are concerned with the overcrowded condition of much rental housing but we oppose the use of density regulations to "solve*1 the problem. We suggest, instead, that overcrowded conditions can only be resolved by increasing the supply of low-rent housings this might be accomplished by a municipal housing corporation, utilizing existing housing as It becomes available or by new construction. We do endorse the City's efforts to regulate more closely the con­ ditions of the rental housing market. The sections we support relate toi 1. 2. 3. 4. Commission control over security and damage deposits Licensing of all rental housing Periodic inspection Standard lease clauses If the basic question of the composition of the proposed Housing Commis­ sion can be resolved to our satisfaction, these sections could be passed with a minimum of criticism from us. However, as we've said above, wo cannot support measures for regulating new maintenance standards unless they are combined with some form of rent control. Our overall analysis of the housing question goes considerably be­ yond the narrow range of questions defined in the ordinances. Housing, like food and clothing, is a basic need and as public policy we Bhould do everything in our power to separate it from commercially lucrative sections of our economy. We believe that rent control, combined with maintenance control, would in the long run help expedite a process of disinvestment by profit maximizing groups so that new forms of public subsidization, ownership, and financing can be utilized for the more equitable provision of low cost housing. Contact the Coalition at 332-2659 If you are interested in nore details of our work, or if you are able to supply us with more background infor­ mation on the housing question. Housing Tank Force Coalition for Human Survival June, 1973 APPENDIX D SIHG ALONG WITH CITY COUNCIL "Don't Let The Landlords Rip You Off" (Tunei varient of Dylan's "Maggie*:; ram") Don't let the landlords rip you off no more. Don't let the landlords rip you off no more, They took all my money and loft me with a dump, The rook leaked so bad, I needed a pump, And the fumance ain't been cleaned for 20 years, I'm sure, Don'T let the landlords rip you off no more. Don't let the landlords,(as above) I rented out a flat and it sure was fine, The gas stove leaked, nearly blew my mind, And they took my deposit as I flew out the door,,,(as above) Don't let the landlords,.. The drains were c’ogged and the pipes all leaked, There was hot water enough for a shower a week, As the shower stall was sinking through the floor... Don't let the landlords,,. The wiring smoked and the fuses all blew, The landlord promised repairs In a week or two, Now four weeks have passed, we're beginning to get sore... Don't let the landlords,., Well, I came home one day, found my stuff in the street, The landlord sold the house, had a deadline to meet. Another parking lot for Jacobson's store, Don't let the landlords rip you off no morel "The Landlord's Lullaby" (Tunei "Hobo*! Lullaby") Close your eyes my sleepy tenants As you sign your rent contract, Kiss goodbye your rent deposit For you'll never get it back. Though the roof is rather leaky, And paper's peolinp off the wall & there's plaster on your bedspread Be thankful there's a wall at all. Chorusi Go to sleep my little tenants Though the gas is leaking fast Lay your head upon the pillow This night's sleep may be your last Though the furnace is erratic And the wiring seems decayed Come the m o m you'll be evicted And your homestead blown away. 238 239 "Your Nine Month Lease Won't Get You Into Heaven Anymore" Oh, your nine month lease won*t get you Into heaven anymore, They're passing a new ordinance and rents are gonna soar, When the rent ceiling's out of sight, who cares about the floor? & your nine month lease won't get you into heaven anymore. The City Council's voting on a housing ordinance today, They don't claim that it's perfect but it's good enough they say. They're bringing housing up to cede, though hell may bar the way, They're not controlling rents but then they're not the ones who pay. Oh, your ordinance won't get you into heaven anymore, There ain't no low cost housing and landlords know the score, <£ the landlords can appeal complaints for two months, three, or four, So your ordinance won't get you into heaven anymore. The Mayor's appointing his commissioners today, They'll have their work cut out for them rubber stamping every day Sc they'll hand back all the escrow to slumlords right away, What care they for justice, but just that tenants pay, 5 your housing commission won't get you into heaven anymore, It'll be packed with landlords, realators, and flunkies by the score, t They'll only hang a condemnation sign upon your door, So your housing commission won't get you into heaven anymore. "Don't Let Your Landlord Shake You Jown"(Tunci Don't Let Your Deal Go Down) Been all around this whole wide world Down in East Lansing way Every place I hang my hat Got to pay and pay. Where did you get that pretty little room With the plumbing that don't leak? I sold my soul to the reality man And I'm paying a hundred a week. Chorus* Don't let the landlord Don't let the landlord Don't let the landlord For my last old dollar in, in, in, Is gone. Left an old landlord behind, He watched me go with a grin, Stuck his middle finger in the air Said,"There are 100's waiting to get in." Who's gonna fill the cracks In the wall? Who's gonna fix the stairs? Who's gonna roof our pretty little shack? Not the landlord, he don't care. SEND YOUR OWN SONGS TOi Coalition for Human Survival P.O. Box 205 East Lansing, Michigan ^8823 APPENDIX E Where Were You When the Heat W ent Off? This m onth East Lansing has a novel a ttra c tio n , a w a lk -in r e fr ig e r a to r . Now appearing a t 923 Bure ham D riv e , this new e x p e rim e n t in outdoor liv in g indoors is brou g ht to you ttuough the discourtesy o f M rs. George Z ie g le r and not a r the request o f the tenants. For those o f you who are not yet aw are o f a ll the gory d e t a il s , here Is a quick blow by blow a cc ou n t. Photos: Z ie g le r residence(above) and 923 Burcham ( b e lo w ) . Guess w hich one lias tire h e a t.__________ 2**0 Sources Joint Issue, November 17* 1973 or The Gasman Doesn't Stop H ere Anymore by T e n a n ts Rent Association o f 923 Burcham 241 Round 1: O ct. 17. T h e 2 0 0 ,0 0 0 BTU b o ile r d ie s . Tenants n o tify th e la n d la d y , M rs. Z ie g le r , who te lls them to n o tify Lansi ng Ic e & F u e l. Iier sup p lier. T h e y do so and are told t h a t L I& F cannot work on it for two weeks. Te nants re la y this to landlady who inform s th e m that th e re is b a c k re n t o w ed, and that work w il l not p ro­ c e e d u n til it is p a id . Tenants spend the rest of the w e ek g e ttin g hack rent tog eth er. O c t. 10. Tenants ask land la d y i f th e y can rent s p a c e -h e a te rs , a n d are told " n o ." T h e y continue to use ovens. T e n a n t* s m e ll gas, c a li Consumers Power to tu rn it o ff. T h e y also c a l l another sup plier, Fay Lett's for an e s tim a te . O ct, 2 0 . Fay Lett's look at b o ile rs, pronounce it beyoqd re p a ir. Tenants inform la n d la d y . O ct. 21. F a y Lett's gives e s tim a te of $1500 for re p la c in g b o ile r. Tenants in fo rm land la d y who says she'd ra th e r d em o lish the house. O c t. 2 3 . T e n a n ts ta lk to M rs. Z ie g le r at Boom Boom Room w h ic h she owns. V e rb a l agreem ent is made tlia t work on b o ile r w ill proceed when rent is paid. O c t. 2 5 . Tenants give Mrs. Z ie g le r $517 in back re n t a t Boom B oom Room but get no re c e ip t. Mrs. Z . says work w il l proceed when she gets second e sti­ m a te fro m L I& F . O c t, 2 8 . M rs. Z . re c e iv e s e stim a te from L I& F w h ic h is $500 m ore than Fay L ett's. Lett's to send h e r a c o n tra c t. O c t. 3 0 . Lett's m a ils c o n tra c t. She requests N ov. 1. Tenants c a ll Mrs. Z . who te lls them she is loo kin g for a used b o ile r. N o v. 3 . Tenants in fo rm M rt. Z . th a t they lu v e c alled Build ing Inspector and plan to p u b lic iz e the w h o le story. T e n a n ts contact newspapers, make appointm ent w ith Legal A id . State Journal interview s te n a n ts . N o v. 5. strong news re le a s e , picked up by State News and State J o u rn a l. Nov. 10. Room. Tenants stage p icket lin e at Boom Boom Nov. I I . P ic k e tin g Our Landlord’ s Place o f Business. "Four w eeks without h c ’. t , we shall not he m o v e d ." As we w e re huddled tig e tlie r tlie otlier night w a tc h ­ in g our windows frost u p , we began wondering i f there w a s n 't som ething else we could do to gel some action fro m our landlords, the Z ie g le rs . T tieri, we rem em bered th a t they managed a restaurant and har (Boom Boom Room) down in tire Fraud nr Shopping P laza . Why not set up an in fo rm a tio n a l p ic k e t, inform th e ir lunch and dinner custome is o f their n eg lect of tenant*? So we got to get tier som e left over cam paign posters and liad a fin e tim e re c y c lin g them into picket signs, even put a piece of o u r furnace on a p o le. As we're w ritin g this, w e 'v e c o m p le te d two sessions of p ic k e tin g ; it was cold bin we kept up our spirits by adding new verses to old songs. M a n y of the customers appeared sym p ath etic to our p lig h t , even tw o c ity councflm en (G eorge Colburn and George G riffith s ) made a special e ffo rt to witness our a c tiv ity . We kind o f doubt th a t w e 'll try to sustain a p ic k e tin g a ctio n for any prolonged p e rio d o f tim e (w e 'd need more people for th a t) but we think w e 'v e d em o n ­ strated th a t we lu v e a weapon th a t is e ffe c tiv e in e co n ­ o m ic a lly harassing our landlords and fu rth e r p u b lic iz in g our four weeks without a furnace. What w e're worried about now is i f we d o n 't get a ctio n soon, e ith e r from our la ndlords or via the c it y , the pipes in this house are g o i n g t o fre e z e and b u n t. •• m N o v. 7 . Tenants c tn s u lt Legal A id , B uilding In ­ specto r, and P IR G IM . State News prints story.quotes M rs . Z . as s a y in g she received no back re n t. Journal fo llo w s . Tenants to r gi ves landlord 5 days to fix furnace. N ov. 9 . P IR G IM given tiie go-ahead from state hoard to research and act in die b e h a lf of tenants. Issue State News in terview s te n a n t*. Nov. 6. S ta te Journal prints story. B uilding In ­ spector comes alo ng w ith more reporters. Tenants consult L e g a l A id , report story to C ity C o u n c il. Nov. 0 . le tt e r to M rs. Z . in fo rm in g tier o f this a c tio n . plan an in fo rm a tio n a l p ic k e t at Boom Boom Room for N o v. 10 and n o tify State News of this. B uilding Lis p e t ­ State Tenants set up Tenants Association o f 023 Burcham and open an account to hold back re n t, d ra ft W e m a d e our p o in t. We are w a itin g f o r a decision fro m P IR G IM , the c ity m a n ag er, and the c ity 's a tto rn e y . B as ic ally, a state o f b ureaucratic in e rtia . Housing Subcommittee Convention for a Responsible City Council APPENDIX F April 7-8, 1973 10 POINT HOUSING PROCRAM Build your estate in a big way. I will teach you how you can more than double your investment dollar in the next 5 years, A Fully fur­ nished and occupied student apart­ ment building within sight of HSU. Presently owned and managed try me, Lee Halstead, State Journal To757?2 Statement of Purpose* There is a growing shortage of rental housing in East Lansing, This shortage 1b reflected in critically low vacancy rates, rapidly rising and exhorbitant rents, and the continued deterioration of the housing stock. Such a situation constitutes a seriouB public emergency affecting the lives of substantial numbers of city residents who occupy rental housing. These emergency conditions endanger the public health and welfare of the City and especially the health and welfare of low and fixed income groups such as the poor, students, young families with children, and the aged. The purpose of these recommendations, therefore, i3 to allev­ iate the hardship caused by this emergency. In order to implement many of our recommendations, we would first have to establish a Housing Commission, Our specific recommendations include* 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, revision of City proposed housing ordinances provision of emergency repair service elimination of residential segregation provision of publicity and counseling encouragement of non-profit ownership establishment of rent control establishment of a rehabilitation program encouragement of new and experimental concepts in design and construction establishment of a tool and repair library revision of City Comprehensive Plan Housing, as we see it, is a basic social need and as a matter of public po­ licy we should do everything in our power to separate it from commercially lucrative sectors of the economy. Only by adopting and implementing the entire platform can we hope to more equitably provide well maintained low cost housing to more members of our community. Creation of City Housing Com«ln«'lon Given the dominant position of landlords in the rental housing market, the composition of the proposed Housing Commission should primarily re­ flect the interests of tenants. Control of the Commission 1b a basic question which cannot be resolved 2^2 243 independent of the functions built into it. If we hope to bring about a redress of decision making power between tenants and those who represent powerful financial interests, we must insist that a majority of voting commissioners bo tenants, \’e would point out, though, that the category "tenant" includes a wide range of city residents from senior citizens to off-campus students. We further recommend that a full-time research and administrative staff by provided for the commission, rather than the parttime staff recommended in the proposed City ordinance. Finally, we suggest that the commission hold two regularly schedualed meetings per ncnth(in­ stead of one) and that special meetings may be called upon the request of at least three members, Revision of City Proposed Housing Ordinances We support the bulk of the City proposed housing ordinances which focus on upgrading the quality of living conditions, institute systematic and peri­ odic inspections, and require licensing of all rental housing units, V/e do feel, though, that the procedures outlined for response to maintenance vio­ lations are unreasonably complicated and time consuming. For normal viola­ tions we recommend a maximum response time by the City of six weeks, in contrast to the seven months possible under the proposed ordinance. We also recommend that for major maintenance violations that the commission to em­ powered to utilise escrow funds, after a reasonable period of time, to bring housing conditions up to code standards. For minor violations we be­ lieve the steps outlined in the proposed ordinance would be adequate* i.e., notice to landlord, withdrawal of license, placement of rent in escrow. We certainly agree with tho City that the condition of much rental housing is a disgrace to the community and a threat to the health and safety of many tenant households. As we see It the accelerated deterioration of much rental housing indicates that,the maintenance provided by landlords has been a token effort at best, lioreover, given the dominant position of landlords in the rental housing market, we would expect that those deferred but normal costs of maintaining housing at code standards will be passed on to tenants In the form of even higher rents. Therefore, we insist that the regulation of main­ tenance standards must be complemented with some form of rent control, that such measures must be implemented if we are to avoid placing our low and fixed income tenants at a further disadvantage. Emergency Repair Service Vie believe that the City should provide emergency repair service within 24 hours to rental households in the event that the landlord can not be con­ tacted or refuses to inspect the situation. Such work would primarily focus on major utility breakdowns such as heat,water, or electricity but could also include other conditions which in the judgment of a building official constitute a threat to the health and safety of the household. The service costs would be billed to the landlord, with the understanding that if payment was not forthcoming in a reasonable time a penalty would be added to the bill and a lien placed against the property. Once an emergency situation has been confirmed follow-up response might be operationalized in several ways. 244 For example the City could employ a housing service unit on a full time basis or could contract with local firms for specific services. In many respects this proposal is a logical extension of Section 8.251 of the proposed housing ordinances described above. The important thing is that in an emergency, the tenants would be assured that they could contact a responsible city official who was empowered to mobilize the forces to resolve an immediate crisis. Me see no reason why such a program could not be operational within a month. Residential Segregation Given the shortage of low priced housing in the City and people's baeic right to have equal access to what is available, we are firmly opposed to all at­ tempts to regulate the type of household that occupies a particular rental unit through the City zoning ordinance. Both the existing and proposed zoning ordinances attempt to regulate the number of unrelated adults who occupy a rental housing unit in certain areas of the City. We, too, are concerned with the overcrowded condition of much rental housing but we reject a public policy of residential segregation to solve that problem. Not only is such an ordin­ ance of questionable constitutionality(as recent court decisions bring out) but we fail to see how institutionalized reinforcement of a youth ghetto Is conducive to promoting understanding between different groups of people in our City. Certainly landlords are content with such an ordinance since that Is one way that they can be assured that housing demand will remain high enough so that even low quality housing will bring high returns, V/e recommend, then, that the Planning Commission delete all reference in the City zoning ordinance to regulating the type of household that can rent housing In particular areas of our City, Publicity and Counseling The proposed housing ordinances will have little effect if tenants and land­ lords are not made fully aware of their new rights and obligations, Thi3 prob­ lem is particularly relevant to tenants since the great majority of them are far les3 experienced and sophisticated in housing matters than are landlords. We recommend that the City provide a full time staff person to the Housing Commission whose primary function would be publicity and counseling. In addi­ tion to City ordinances there is a need to publicize relevant state statutes such as the recent security and damage deposit law. Publicity might be in the form of pamplets summarizing chief points, seminars conducted on specific problem areas, and direct communications with parties involved in housing disputes. Counseling would involve maintaining regular office hours, provid­ ing materials diroctly to interested parties, and offering Interpretations of particular clauses if requested, Non-Profit Ownership A direct and effective way to reduce rents is by shifting housing units out of the profit-making sector of the economy and operating them on a non-profit basis. Approximately 25^ of the rental housing dollar goes to landlord profit (net cash flow + equity increase). Thus, existing housing could be operated on a non-profit basis at rents at least below present levels, without any 20,% 2*4-5 reduction in quality of management, maintenance services, or in other standard housing costs. One alternative to conventional rental housing is the housing co-operative. Since each resident/member of a housing co-op purchases an equal share of the property, each has an equal voice in the operation of the house| this includes maintenance and investment decisions, and the setting of social rulos. When an Individual is ready to leave he receives a full refund for his share of the operation. For people who plan to reside in East Lansing for a limited period of time, the housing co-operative would seem to be one way they could gain more direct control over their living environment and to do bo at lower costs. A major constraint to the expansion of co-operative housing has been the reluctance on the part of financial institutions to provide mortgage funds, Our recommendation is that the City of East Lansing step in and pro­ vide mortgage funds directly to non-profit housing corporations for the pur­ chase of new or existing property. The City could do this by issuing municipal bonds(solf-liquidating). If this program is complemented with a program of rent control, its value will be further enhanced. Control of rents at or below present levels will encourage disinvestment by landlords seeking maximum pro­ fits. This will make more property available to tenant controlled non-profit housing corporations. Rent Control The establishment of a rent control system seems justified on a number of grounds, First of all rents in East Lansing are considerably higher for all classes of housing than in the surrounding communities. Secondly, within the City certain groups of tenants, particularly members of the youth community, pay higher rents for the same classes of housing than other groups. Further­ more, larger landlords or management companies tend to charge more rent than smaller landlords; this is particularly important in the apartment submarket where over half the units are owned or managed by eight firms. Finally, as we have pointed out previously, implementation of maintenance standards as proposed in the City housing ordinances will most certainly lead to direct increases in rents. There aro many way3 to implement a rent control system. One way which we have been considering, modeled after the Berkeley system, ig to roll back all rents to a specific date; we would recommend rlay 15, 1972 as a base date, principally because we have comprehensive information from sur­ veys on the rental housing market. Rent adjustments could be made at a later time either up or down. A Housing Commission subcommittee would receive peti­ tions from either landlords or tenants for such adjustments and would base its decision on survey data and the case presented by the interested parties. Obviously, increases in taxes, capital improvements, utility rates would all be legitimate reasons for granting an increase in rent. Similarly, failure of the landlord to provide adequate housing cervices would be an example of jus­ tification for a decrease In rent. Clearly, there are many remaining details to be worked out but we can profit from the recent experience of several other university towns such as BerkeDcy and Cambridgo. Certainly, the strictest con­ trols should be focused on the apartment submarket. However, we would advocate some form of control for all rental housing with the exception of small land­ lords with three or less rental units, non-profit corporations, and structures which cater to transient guests. Given the complexity of the rent control issue we would not expect to be able to implement a program for at least six months. 2b6 Housing Rehabilitation Pro pram We believe that the City should provide funds and administrative staff for a rehabilitation program which would upgrade dilapidated housing. Details of the proposod program could be based on the model provided by the BILD Corporation of Lansing*s Model Cities Program. The administrative staff would bo empowered to acquire deteriorated structures(through direct purchase, tax liens, or condemnation), contract to bring them up to code standards, and then resell them to low income families or non-profit housing corporations. In this way a revolving fund would always be available for new purchases. We would see 25 to 50 units as a realistic annual target for such a program, requiring a revolving fund of 51.5 million raised through municipal bonds (general obligation). With a lot of hard work the program could be put in operation within six months. Experimental Housing All too often building and zoning regulations lock a city in to particular modes of housing design and construction. While such housing may appear good by the standards of architects and planners, it does not necessarily meet the social needs of those who must live in it. This would seem particularly true for senior citizens, the poor, and the vast majority of students. When has the Planning Commission requested input from citizen groups on the type of housing they would like to see developed? Surely, there is room for gar­ den apartments, rustic cottages, domes, houseboats, and tenting areas In our city but that is hardly reflected in the "comprehensive plan," Vfe recommend that the Planning Commission and the Building Department Jointly sponsor a series of open public meetings to receive such input from our citizens. We would also like to 3eo the City mako more use of Its power to grant tax abatements so as to encourage developers to construct well designed housing for fixed income groups-who normally could not afford the market rates for high quality housing. Tool and Repair Library We feel that a tool library and maintenance service should be set up within the proposed Housing Commission to provide for repair and upkeep on East Lansing homes. Such funds to be financed by landlord licensing fees. Revision of City Comprehensive Plan Changing tiroes demand a re-examination of the City Comprehensive Plan for the future development of our city. This re-examination should Include a series of open meetings so as to receive input from all portions of the community. APPENDIX G Housing Task Force Coalition for Human Survival April 23, 1973 WHERE YOUR RENT DOLLAR GOES Suppose you and three friends were thinking about renting a house in East Lansing, a typical house with six rooms, forty years old, and a market value of $20,000. If the landlord offered you the house for $280 a month, where do you suppose your rent dollar goes? Well, a number of costs are fixed such as taxes and insurance but others pretty much depend on what housing services are included in the rent and what mortgage terms have been arranged, not to mention the greed of particular landlords. In the tables below we have worked up where the rent dollar goes under alternative condi­ tions. Case I GrosB Renti $280/mn “ $336o/yr - 5* vacancy & bad debts($l68) = $3192 Annual Operating Costs Taxes Utilities Insurance Maintenance $688 $1608 21.5* 13.O'* 3.0* 12.5* 50.0* Mortgage $145° 45.5* Net Cash Flow $ 134 4.5* $3192 100.0* $420 $100 $400 1st 5th 10th 15th 20th Interest Equity $ 330 yr $1120 $1000 yr yr $ 790 $ 490 $ 660 $ 960 yr $ $1395 yr 55 $ 450 Mortgage Breakdown Mortgage Termsi $5000 down, $15,00° for 20 yrs. at 7 a* interest. Rate of return on investment(range)i 9.3 to 8,2* (a) if half the utilities are paid by tenantsi 13*5 bo 9.3* (b) if maintenance is also reduced to $100i 19.5 to 10.9* Other benefits to landlord(tax shelter)t (a) Interest 13 written off Federal taxes as a loss in income. (b) Depreciation is also deducted from income. Net effect is that for the major portion of a mortgage period, a landlord reports no taxable income, in spite of his high rate of return. Moreover, if the landlord sells the bouse for a profit he will only be taxed on half t.I.e differonce(capital gains). 24? 248 Case H i Effect of decreasing the down payment Mortgage Termsi $2000 down, $18,000 for 20 yrs at 7%% Interest. Gross Renti $230/mn as above. Taxes Utilities Insurance Maintenance $688 $210* $100 $400 $1398 Mortgage $1740 Cash Flow $ 21. 5# 6.5* 3.0% 12.5* 43.5# 54.0* 54 $3192 Interest Eoult.y 1st yr $1344. $ 396 5th yr $1200 $ 540 10th yr $ 948 $ 792 15th yr $ 588 $1152 20th yr $ $1674 1.5* 66 Mortgage Breakdown IOO.O96 Rate of return on Investment(rango)i (a) if half the utilities are paid by tenantsi 22,5 to 9.496* (b) If maintenance is also reduced to $100* 37.5 to 11.1*. Case IIIi Effect of increasing the term of mortgage Mortgage Termsi $5000 down, $15>000 for JJ0 yrs at ?^% Interest. Gross Renti $230/mn as above • Taxes Utilities Insurance Maintenance. Mortgage Not Cash Flow $688 $420 $100 $400 Interest Eauitv 1st yr $1125 $ 135 5th yr $1065 10th yr $ 990 $ 195 $ 270 15th yr $ 405 20th yr $ 855 $ 690 10.5* 25th yx $ 435 $ 825 100.0* 30th yr $ $1215 21.5* $1608 13.096 3.0* 12.5* 50.0* $1260 39.5* $ 324 $3192 $ 5?o 45 Rate of return on investment(range)i 9.2 to 8,2* (a) if half the utilities are paid by tenantsi 13*4- to 9.3# (b) if maintenance is also reduced to $100i 19.3 to 10.9/6 The effect of decreasing the down payment, then, is to increase the rate of return on investment while decreasing net cash flow (actual cash in hand). The effect of Increasing the term of mortgage increases net spreading cash flow while therate of return on investment over a longer period of time. In either case the bank benefits considerably more than landlords, whilemore more of the tenants* rent dollar goes to meet mortgage costs. and APPENDIX H E.L. H O U SIN G EXPEDITION Coalition for Human S u rv iv a l jc H a ilE H S E lf .- / / / Stout Hearts and INQUIRING MINDS! * * 0 U R R EN TA L** The Deepest, D a r he | C a r n e r s HOUSING MARKET C H IL L IN G T A L E S of th e DAY to DA Y S T R IF E of those w h o lodge in our C itr- P L A N S fo r a N E W K IN D o f H O U S IN G , c o n tro lle d by those w h o live in it ra th e r than those who live off it! -A N E W ROLE for our city other than reinforcing the Status Quo!! m t t m T itiM M T iT T T ^ tt^ tT i T i t n t i a i f i r n i » > e im < i i M M i i i i m n t i i i x m L . . i L j m . , . , „ . i i i r. . . , i HUE r - '- t t r r * it t^ in B r in g : IV tt. Your BIKES, your FRIENDS. & GOODIES for a picnic lunch at »»ALT0H PARK-* !!! This 30/month more expensive than elsewhere, according to a survey by the Michigan Housing Development Auth­ ority. Housing expenses consume 25-^O^J of tenants' Incomes in E.L. This is higher than for non-tenants, and Is comparable to the amount paid by poor people in big city ghettos. E.L. tenants pay more then ■53,000,000 a year in landord proflts--landlords boast of doubling their lnvestmenb in 5 years. The exploitation of tenants can also be seen in the limited choices of housing styles, in the widespread crowding, noise, parking problems and other problems faced by student tenants. There are two main reasons for this exploitation. One is the general shortage of low-rent housing. This is due, In part, to the rapid expansVo of HSU. Even tho many dorms and apartments were built, this did not keep pace with the increase in university enrollments. AI 30 much of this newer housing is priced beyond the reach of low Income oorsona. Another factor contributing to the shortage of low-rent housing is the expanslun of the E.L. business district, and, especially, the expansion of city-owned parking lots designed to serve downtown businoases. Vhole blocks of older, loir-rent housiig have been bulldozed away by the E.L. city government. A third factor leading to the high rents in E.L. is the sup­ erior political power, legal power, and organization of landlords. Landlords have a substantial impact on government decisions— they influence elections and new laws* Landlords are well acquainted with existing laws, and have ready access to lawyers, something tenants often do not have. Further, landlords are well organized— they hove a full-time sta,ff, and numerous books, magazines and training programs teach them how to manage their properties for greater profits. Many tenants do not wont to spend a lot of time hassling for housing— they have other priorities. An additional complioatbn is that 10,000 tenants are new to E.L. every year. They don't know where to look to find the housing that best moots their needs# This is made even worse because many people arrive in town only a few days before classes start In the fall, and so have to find housing fast— they don't have much ohance to shop around, or to nogotiate for a lower ront or a better lease. Another problem Is that many people move every year. This inhibits the growth of tenants unions, which have had some suoooss in other cities in lowering rents and negotiating for better rental conditions. Margaret McNeil and Nelson 3rown want to use tho power of the city government to lower rents and Drovide bettor rental condit­ ions In East Lansing. They are running on a 10-polnt housing platform written last spring by tho Convention for a Responsible Council. 251 you can g iv e on hour to help e le c t M argaret and N e lso n , stop by 501 M .A .C . or call u» a t 3 3 7 - 7 2 4 7 . VOTE NOV. 6 . . 252 E . L . H O U S I N G CRISIS P A G E 2 The 10 p o i n t s are; (1) R e v i s i o n o f the r e c e n t l y enacted h o u s i n g m a l n t a i n a n c e o r d i n a n c e * T h i s o r d i n a n c e should be changed to r e d u c e la n d lord s t a l l i n g and to p r e v e n t h i g h e r cha r g e s to tenants. (2) E m e r g e n c y repair, service. W h e n ho u s e s o r a p a r t m e n t s have m a j o r b r e a k d o w n s ( h e a t , plumbing, etci) and the landlord takes a long time to fix It, the city should m a k e the r e p a i r and bill the landlord. (3) E l i m i n a t e r e s i d e n t i a l s e g r e gation. The p r o s e n t z o n i n g law w h i c h r e s t r i c t s the a r e a s w h e r e '’unrelated persons'’ can live Is d i s c r i m i n a t o r y and should be e l i m i n a t e d . (4) P u b l i c i t y and c o u n s eling. The city should s u p p o r t a s e r v i c e to p r o v i d e I n f o r m a t i o n to ten a n t s a b o u t t heir rights. (5) E n c o u r a g e m e n t o f n o n - p r o f i t housing. The city should p r o v i d e m o r t g a g e funds to e n c o u r a g e people to f o r m c o - o p e r a t i v e s to buy e x i s t i n g h o u s i n g and to ope r a t e it o n a n o n - p r o f i t basis. (6) R e n t control. The city should pass a law to freeze r e n t s at 1972 l e v e l s . (7) H o u s i n g r e h a b i l i t a t i o n program. The city should s t a r t a p r o g r a m w h i c h w o u l d acqu i r e dotC'rioated housing, r e n o v a t e it and then sell it to co - o p s or low Income peo p l e . (8) E n c o u r a g e n e w and e x p e r i m e n t a l c o n c e p t s in h o u s i n g d e s i g n and c o n s t r u c t i o n . The city should encourage, n o t harass, n e w i d e a s In housing: domes, solar heated homes, etc. (9) R e v i s i o n of m a s t e r plan. The p r e s e n t m a s t e r p l a n is o u t d a t e d . It should be revised w i t h i n p u t f r o m a l l s e g m e n t s of tho community, k e e p i n g i n mind the a c t u a l n e e d s o f p e o p l e . not Just business.. (10) T o o l library. The city should pro v i d e a tool library, so p e o p l e can r e p a i r their o w n homes if they wish. T hese p r o g r a m s w i l l m a k e E a s t L a n s i n g a better p l a c e for all. V o t e for M a r g a r e t M c N e i l and N e l s o n B r o w n on N o v e m b e r 6. Sevresi MoHell-Brown Caap&ign, Coalition for Human Survival, 1973 APPENDIX K EDITORIALS Nelson Brown 9M argaret McNeil deserve to win city council seats S lo w ly , ever so slowly, the p o litic a l consciousness o f East Lansing has been raised by a newly discovered awareness that citizen input can indeed affect the course of city government. With the city council election Tuesday, it is imperative that voters decide w hich candidates will wholeheartedly listen to and direct c itize n concerns in to viable solutions for community problems. But listening to citizens' gripes is just one attribute of a responsive council member. Local representatives must also have innovative ideas aid programs, must be able to provide strong, dynamic leadership and have the ability to draw on the city’s human resources in turning thought into action. ’ Fresh idaas... Sourcei State Neva. November 2* 1973 It is the clear belief o f the State News th at Nelson Brown and Margaret.McNeil hold the hope for the future responsible growth of East Lansing and deserve to be elected to the council. B ro w n and M cN eil began campaigning in April, and have, more than any other candidates, led the way in addressing themselves to issues and formulating definite ideas on how to effect change. As a result, John Polomsky and Mary Sharp have been forced, to play catchup by only responding to proposals and seldom formulating their own ideas. Platform The Brown - McNeil platform addresses a number o f pressing problems. Drafted by about 150 participants in the Convention for a Responsible Council, the platform is a realistic and pragmatic set o f social goals for the city in the next decade. Perhaps the most encouraging part o f the Brown - McNeil platform deals with tocal housing. The platform establishes priorities which have become issues o f the campaign. Brown and McNeil want to revise sections o f the c ity housing • ordinance and, i f necessary, establish mandatory rent control should maintenance costs inflate the city’s rent structure. Their proposal for the city to float bonds to finance low - cost housng could be one solution to the housing shortage. 253 P o lo m sk y and Sharp also recognize that housing is a crucial issue in this election. But though they do recognize the problems, they have yet to offer specific proposals for combating high rents and for developing more housing options. Initiative Brown and McNeil have the initiative and desire to be viable forces on council in introducing fresh ideas. The programs they espouse w ill require intense investigation and work before they can be implemented, so the council will have to effectively coordinate its efforts with city departments to make them function. P o lo m s k y was 'a n o litic a l unknown when the race for council first began and, to a large extent, remains an unknown entity. Since the August primary Polomsky has shown more alertness to the city’s problems and an ability to motivate people and to stimulate meaningful dialog. However, Polomsky has yet to take a firm stand on how to solve the city’s problems especially housing and transportation. Just being aware o f problems is not e n o u g h ; p o s itiv e ideas fo r improving the status quo are also needed. In that respect, Polomsky falls short. Sharp, the incumbent, seems to have outlived her usefulness on the council. Her actions in the past year have been indicative of blatant in c o n s is te n c ie s and callous disregard fo r.th e community, as 25^ demonstrated by her recent tlip flop on the Ann Street construction issue w hen faced w ith losing hundreds o f votes. Sharp * candid, outspoken and sometimes headstrong — has done much for the community in eight years. However, while maintaining she w ill listen to all citizens’ complaints, one cannot help but wonder i f Sharp listens only when issues snowball, or i f she will anticipate points o f controversy and work to solve them before hand. Balance T h ere is another factor that c a n n o t . b e discounted in this election - the overall composition o f c i t y c o u n c il. In August , p r o g r e s s i v e Geor ge Qo l b u r n resigned, leaving a huge hole on the council' where there had been a forceful spokesman for the interests o f the community's youth. and spirit to match Colburn’s replacement, Thelma Evans, falls far short o f representing Colburn’s progressive views. Her appointment must be seen as a deliberate attempt to shift council’s delicate political balance. Now it is i mp e r a t i v e t ha t candidates be elected to the council who will balance the representation between h o m e o w n e r s and the y o u t h community. Tuesday’s election will be crucial in determining whether East Lansing st agnat es o r moves ahead for p r o g r e s s i v e change in c i t y government. The election o f Brown and McNeil is essential to insure that East Lansing wilt move ahead in years to come. Anything else will be a step backward. Two - thirds o f the East Lansing electorate are students. Get out and vote Tuesday; give the city the spur it needs and vote for Brown and McNeil.