Charles Winkleman

Burlington Politics from the Left

Seven Days Misses the Mark on Housing in Burlington

Apr
19

A recent article from Seven Days about Champlain College’s new dorms had a lot of quotes from a lot of people. I want to show how, as long as UVM and Champlain can charge whatever they want, our housing market will never resemble a ‘traditional’ supply and demand market. How, as long as properties are valued as investment properties, only the very wealthy will have any chance at affording to live in Burlington. New dorms may ease the housing crunch for a select few, but for the rest of us, we will continue to pay most of our low wages to wealthy landlords as we struggle to thrive.

Quote 1:

“This year, Sharp got no takers from ads on Craigslist. He dropped the rent from $2,800 to $2,700 a month, but still has not found tenants. “We may have to go to $2,600.”

The building, located at 24-28 Orchard Terrace, consists of four 3-bedroom units. As a 20-year home-owner, the mortgage is minimal if existent. Each bedroom rents for an astronomical $933 a month, grossing over $11,000 a month and $134,000 a year, and will be reduced to *only* $866, $10,400, and $125,000 respectively. Even after factoring in maintenance and property taxes (at $20,000 a year), that’s still more than $50,000 a year IN PROFIT just for owning a single building. That’s money that doesn’t go into the local Burlington economy.

No service worker, nonprofit worker, mental health worker, or early educator in Burlington could afford these rents, even at the reduced price.

Quote 2:

“Leases run for 11.5 months and aren’t cheap. They vary in cost from about $965 to $1,355 a month, including utilities and internet.”

The biggest housing issue isn’t supply and demand, but that UVM and Champlain college, two of the largest landlords in the city, have a huge captive market. They can charge whatever they damned please within ‘reason’, which grossly inflates the private market.

Quote 3:

“”If Champlain were ever to hold a yard sale, this could be its most valuable asset,” said John Caulo, an associate vice president at Champlain, as he gave Seven Days a tour.”

Good thing that this property doesn’t have to abide, for some reason, by inclusionary zoning laws like all the other for-profit developers in the city, or else it would lose some of its $36 million value, but atleast the city cleared $1.1 million for the prime downtown public property, (excluding half the cost of soil removal and treatment). The city has worked out an agreement for payments in lieu of property taxes for the next 20 years. After that, it’s the next generation’s problem and tax burden.

Quote 4:

“Champlain has terminated its lease of roughly 280 beds at Spinner Place apartments, effective this summer. That change has left the owners of that building on Winooski Falls Way hustling to find new tenants for the coming school year.”

So the vast majority of students were already housed in student-specific housing. Building 312 beds leaves a net total of 32 new beds. That sounds like great news for Winooski’s housing market, as 280 new beds open up. I’m not seeing how that really helps Burlington’s student housing crunch…

Quote 5:

“On a recent morning, the street was packed with parked cars bearing out-of-state license plates, and litter blew around the curbs and sidewalks. The discounts people are seeing on Craigslist haven’t filtered down to Bausch. Rentals remain “pricey,” she said.”

I bet, most of those discounts are towards the new ‘market-rate’ housing built by Redstone, Farrell, SD Ireland etc, where they charge upwards of $2000 per month for 1 bedroom and $2400 a month for 2 bedrooms. What did our mayor say? “That sounds to me like the early stages of a market reconciling, kind of recalibrating to deal with the fact that there’s substantial amounts of new supply.” A market for the elite few, sure.

Quote 6:

“One big question is whether the changing marketplace will lead owner-occupants to reclaim some of the houses that were converted to student rentals decades ago.”

Very few current residents in Burlington could afford to buy a dilapidated $400,000 single family home and then spend another $200,000 to bring it back to life. This idea exists outside reality. If you look on local real estate sites, most houses near UVM are sold as investment properties, inflating the sale price immensely.

UVM and Champlain On-Campus Housing Prices are Hurting the Rental Market

Mar
06

When I ran for city council last year and was looking into our local housing market, I was blown away by how Burlington’s housing market doesn’t function like a typical supply/demand market. There are many reasons why this is the case, (I’ll save it for a different post) but the biggest reason that housing in Burlington is so dysfunctional is that UVM and Champlain College run a closed-housing market conglomerate, free of property taxes that most landlords have to face, and they get to rent to a captive audience, who must pay whatever UVM asks them to pay (within ‘reason’).

UVM owns or leases 5700 beds (it is unclear how many bedrooms that is, if it includes privately-owned Redstone housing, but even if we assume the university averages 2 students per bedroom, that’s still 2,850 bedrooms), while Champlain College owns around 1800-1900 beds. To compare, Champlain Housing Trust, the next largest landlord, owns only about half that number, at nearly 1300 bedrooms, while Bissonnette, the largest private landlord by number of beds (until Farrell’s Burlington College mega-project is built), owns nearly 550 beds.

If you attend UVM or Champlain, you are required (with exceptions) to live on campus and are required to pay on-campus housing costs. When one considers the cost of living on campus, and how students are really only in the dorms for 7 months out of the year, it’s clear that on-campus housing is highway robbery, and anything off campus is a comparative steal.

Obscenely inflated housing costs affect more than just on-campus students – it affects the rest of the housing market for other renters as well. As students move off campus, or atleast out of student dorms, they no longer have to pay anywhere from $750 a month to share a quad with 3 other adults, $1,000 to share a double, and up to $1400 a month for a single room with a private bath and shared common area facilities. Even campus-sponsored private-housing is expensive – Redstone Lofts are $950 per month per bedroom, Redstone Apartments are a bit cheaper starting at $700 per month per bedroom, while Eagles Landing will run from $925 per month per bedroom up to $1300 per month for a studio.

It’s even crazier when you consider that universities and student housing, including Eagles Landing (194 Saint Paul Street) don’t abide by inclusionary zoning requirements. One would hope that the inclusionary zoning working group would work on this issue – with one meeting left, they have not yet.