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Sunday, January 17, 2016

An Unscrupulous Cash Cow


By Thornton Crowe

It’s founded in 1925 – that’s 91 years! Yet, Salisbury locals still harbor big resentiments towards Salisbury University students – so much so, the environment often borders hostility towards them. That being said, the students’ money stream is sorely missed during the between-semester breaks!

The off-campus housing situation seems to be at odds with supporting the university’s motto that Salisbury is a hospitable place for students to live, work and study. Many local landlords charge astonishing rents – cramming four students in a house at $400 a pop for a tiny apartment that doesn’t contain anything close to what it should for the $1,600 rent. It’s become so profitable even one local church rents a house for this astonishing price tag. In Salisbury, that’s two mortgage payments on a relatively modern house!

Local landlords also don’t care if their young tenants face massive sticker shock for gas or oil during cold months – some bills being in excess of $300 a month. There’s no effort to make these homes fuel efficient or cost effective. In fact, some homes in the Camden area are not even insulated under those beautiful hardwood floors. When adding cable, water, sewage, rent and any other base bill, a student pays a large sum per month to live anywhere close to the campus should they chose not to live in one of the off-campus all-inclusive housing popping up.

Apartments in this area, given the pay potential, should only be around $500-600 for a reasonable-sized apartment a month! Don’t know where the local landlords and apartment owners got the memo saying students have some magical, inexhaustible well of cash to give them, but they were gravely misinformed.

Last year, many landlords balked and whined at the prospect of a rent control – hawking about how their operating costs were so inordinate that any rent control would be prohibitive; however, what they didn’t reveal to WMDT, WBOC or The Daily Times is, they do very little to maintain or fix these properties. In fact, they do just the opposite. Students get almost no services from these private landlords even though they rake in big bucks on barely legal dwelling, scraping by the building inspectors’ minimal guidelines. In spite of any big government oversight proclivities, they have proved themselves unprincipled so much so that oversight might be the only option.

So why does Salisburians have it in for a university that employs a large number of it’s citizens plus bringing in almost nine thousand extra people with their buying power? Why does the local government, university officials and locals continue to placate landlords’ unscrupulous behavior, which basically bites the hand that feeds? It certainly doesn’t inspire alums to stay round here and contribute their newfound knowledge to the community.

How say you?

27 comments:

Anonymous said...

The other issue is that these landlords are buying up these homes and exclusively renting to college students because they can charge these outrageous rates. This leaves no reasonably priced homes for families. Look around at the non-student rental situation in this town. You are either getting a decent house at a stupidly high price (2BR 1Bath, 1000sq ft for $1400/mo) or you can get something affordable, but you have to live in fear of your neighborhood. On top of that the "ghetto" areas seem to grow larger and larger every year.

Anonymous said...

The main answer to your question(s), Thornton, is this:

The way they ACT.

How much do these landlords have to spend when the students tear the place up?
How about the wild, drunken parties and the disruption of whole neighborhoods?

Anonymous said...

My daughter and her roommate each pay $765 per month for a two bedroom unit at University Orchard ! That's an extra educational expense for me, since I pay for her tuition, books, etc. In 1987, both my roommate and I paid a total of $313 a month to live in a two story townhouse at Oak Hill apartments. Riverview and swimming pool. Something needs to be done to control these outrageous rental fees !

Thornton Crowe said...

9:29AM - Well said indeed.

The problem is there are too many landlords trying to cash in on the university crowd, they are not even open to rent to local families and when they do, it's a disaster rent wise. In the Camden area, this is a particular bothersome problem.

Back in the 80s, that area was filled with families and reasonable rents. Only a couple houses were 'college rentals.' NOw, its virtually an extension of the campus with either landlords or the university scarfing up the decent homes.

Even as far as the Condos on the North end of town are outrageously overpriced and this area's economics do not sustain nor warrant these types of rental prices.

The irony here is, these landlords charge an arm and a leg but then complain when students have the audacity to have a party! The vehemently forbid the students to be kids (which they are) and insist on trying to 'bust' them for any infraction.

Thornton Crowe said...

A PS to the Article.

The bit about the church should be very alarming to citizens as it not only rents their 'house' for $1600 to students, they do so under a tax exempt status. Is this fair to others?

Anonymous said...

If a church claims a tax exemption for rentals they are in the wrong. It is clearly "unrelated business income" and therefore fully taxable.

Thornton Crowe said...

9:40AM - That is a minority of students. Most are relatively quiet with the exception of the occasional get together. As for tearing up the place, trust me, the landlords don't repair the places once torn up. Some of the houses on College are absolutely horrific and they're like that semester in and out. If a tenant has a propensity towards destruction, don't rent to them but to charge outrageous rent is obviously not going to cure the problem of destruction. Pretty obvious. Also, I would venture to say, the people who are in gangs are far more destructive of their own (and their neighbors) than college kids but this community is so 'hyper-sensitive' when it comes to the kids, they natural point the judgmental finger at them, without hesitation.

9:50AM - You are exactly correct. And this is exactly what landlords are banking on - kids' parents footing for their ridiculous rents. The University Orchard situation I am unfamiliar with; however, considering that is part of the plan that gave developers money to build for the university's students, even $765 is too much. This per person thing is rallying New York City rentals. Salisbury does not, I repeat, DOES NOT support this kind of rent. In New York, people can easily make in excess of $20 an hour for a job. In Salisbury, you're darn lucky if you make $10 an hour. This community needs to get a clue on reality and its own limitations.

Also, 9:50AM, while I am an opponent of governmental restrains, in this case, with such an unethical bunch like the Salisbury Slumlord Association, there perhaps is no other option. They have proved themselves inept at self-regulation and self-restraint.

Thornton Crowe said...

9:55PM - I do not know the status of the church's filings; however, several students complain about this house and it's rules and vigilance about collecting their rent money - much like a mafia shaking down the local merchants for protection monies.

I find it disturbing churches would be allowed to rent property due to the fact that congregations tide in order to enhance the church's resources, not finance real estate investments like college rentals and storage units.

I don't recall in the Bible, Jesus saying to the disciples, "Make sure people tide because then we can financial fleece the local university students.'

Anonymous said...

So if you don't want to pay to go to college don't go. if you don't want to pay the rent don't rent. Stop complaining. you are free, you have a choice, tell your kids to go to work. if you buy a house, fix it up to meet the rental rules and you want to charge $1600 a month and someone pays for it awesome, good for you, make a profit. because you are the one that went out, took the risk and made the money.

that is the way this country is supposed to work

towjam said...

I cant figure out what is so hard to grasp here. The students are allowed to walk through and make decisions on whether to accept or decline the property. If they choose to accept it, and sign a lease, how is the landlord to blame for this? I dont twist the arms of the students that rent from me, they line up to apply when I advertise them for rent. Both are 1000sf 3 bedroom homes. The mortgages are $750/mo. I charge $1350/mo rent. I include lawn care, trash service, water and sewer. None of the items I just listed is free, someone has to pay for that, and its reflected in the monthly rent. When I decided to invest in rental properties I knew what I was getting into, and did it to make a profit. I do not run a non-profit organization, I have a full time job, and I take care of my properties.
The bottom line is this.....THESE STUDENTS ARE NOW ADULTS. They are supposed to be capable of making such basic decisions like whether they want to sign the lease or not, or to be respectful neighbors (unlike the a$$holes at 1408 South Division in The Gathering). The students that act like clowns number in the hundreds, not dozens, so don't be fooled. I live right smack in the middle of it all, on Honeysuckle Drive, and trust me when I say that the unacceptable behavior plays out on a daily basis in my neighborhood. Unfortunately, our liberal City leaders have let this town become such an undesirable place to live I am forced to stay because my property isn't worth squat. Until the property values rise I will continue to rent to students.

Anonymous said...

Landlords in Salisbury are ridiculous to not only students but full time residents as well. The cost of living is ridiculously high in this small town compared to what a nicer rental would be in many bigger cities. We all should be outraged!

Anonymous said...

Are you saying that because they pay "high" rent prices they have the right to act like jackasses? You sound like Marylyn Mosby...."give them room to act out?"

Anonymous said...

This is the reaponse from student affairs when confronted with less than desirable students.

On behalf of the university let me extend our apologies for the nature of your communication. The university truly sympathizes and understands your frustrations. When these types of incidents occur in the surrounding neighborhoods it does not leave favorable impressions of our students, in fact, it throws shade on the entire university and shadows all the wonderful contributions that our students make in the community such as The Big Event, or I Love Salisbury, for which more than 700 students volunteer each year. Because of privacy requirements, it may appear the university is not responding, but be assured the university has protocols and policies in place that when our students are found responsible for bad behaviors or violations of the student code of conduct, they are held accountable. The university makes every effort to work closely with landlords and property owners, neighbors and the local police agencies to hopefully prevent off-campus incidents. Additionally, through various programs, the university continually reminds our students of community behavior expectations from their admission through graduation, and it is our desired outcome that students understand that their bad behavior has consequences.

If police issue a citation to the residents at The Gathering, the university will automatically process them through our conduct office and if found responsible they will be issued sanctions from the university, in addition to any city violations. However, if my office is contacted, even without a citation they will be contacted and will have to report to my office immediately. Please understand that this is the winter break at the university and many of our students return to their permanent homes until classes resume, January 25, 2016. If we are unable to connect with them now, I assure you we will continue our efforts when the spring semester begins. Please feel free to call me directly if you have any questions. I can be reached at 410-543-6100 or via the email address above. Again, our sincere apologies that the situation occurred.


Lawanda Dockins-Mills, Ph.D.
Associate Dean of Students
(410) 543-6100
(410) 543-6002 (fax)

Salisbury University
1101 Camden Avenue
Salisbury, Maryland 21801

Thornton Crowe said...

1:11PM, many landlords do not pay for lawn care, trash, sewage and water. The rent is PLUS all utilities including the above.

You are correct, there are some students whom act like clowns - just like some regular people who act as such; however, doesn't the landlord have a responsibility to also vet prospective tenants before letting them sign a lease?

1:19PM, No, I am not addressing their behavior. In fact, I am offended by many of these behaviors. I don't know how you correlate high rent into behavioral issues but okay, I'll refer to what I said above: Doesn't the landlord have some responsibility to also vet before signing a lease?

Responsibility is a two-way street. If you rent to a bunch of people, whether its a big family or four college kids, you're going to have visitors, noise, damage from normal wear and tear of many people living in one dwelling, etc. That's a given.

Perhaps if rents were more reasonable, the need for students (and citizens) to rent in mass would not be. Less people, less noise etc.

Thornton Crowe said...

In regards to 12:46PM's comment regarding the students are adults making decisions - absolutely. Perhaps the universities and college should do more to encourage students to rent at Orchard, Village and other student-concentrated housing. I agree they should, but where does that leave the local landlords?

The average worker in Salisbury cannot afford a lot of the rents being charged either because those rents were created on the past cash-in of students renting from them.

There are a number of For Rent signs around the college now since they created the rule that Freshmen and Sophomores need to live on campus. (Why this was done, I can only surmise from parent/student complaints.)

Those landlords are feeling it because every month their dwellings are empty, the landlord has to pay the water, electric, gas/oil, and mortgage. Are you proposing this is good for the City, too? Nothing trashes up a neighborhood and devalues surrounding homes faster than streets of for rent signs.

Phronesis said...

Let me throw out some tidbits.

The neighborhood rental market took off after the University increased its enrollment in the late 1970's and beyond, but refused (yes, refused) to build any more student housing. Some of the houses that landlords bought up for $5000 are now renting for $1500 per month.

In the 1990's and 2000's, up and coming landlords, with the help of local banks and realty investors, offered premiums to sellers - if a house was on the market for $120,000, they'd offer $125,000. This is the opposite of how home selling usually works; the price usually falls as the house stays on the market. After a few years of rental investment, landlords can quickly pay off their loans and amass more holdings.
Banks offered very unusual interest rates to the larger landlords, basing them not on the borrower's immediate equity, but on future earnings as rentals. Lots of money changed hands that left Jane and John Q. Public out in the cold as borrowers and prospective homeowners.
Political connections had something to do with it, too. Several high ranking local politicians had (and still do have) very close ties to the bankers, landlords and real estate communities. Close, as in married to or child or sibling of one or more. Legislation that came during a certain span of years was "adjusted" to favor landlords in community disputes over overcrowding, noise and other negative aspects of transient housing.

Students pay what are considered market rates for housing. The market is set by whatever amount the renter chooses to pay after being informed of the rate. But that's not to say that the rates aren't artificially inflated. As so very many students come from areas much more affluent than Salisbury, it's the case that the rents are reflective of the students' home areas. It's a seller's market here, at least for now.

The rents here are fairly outrageous, and don't really reflect the value one might expect for the prices. As for rental prices themselves, there are four bedroom, hundred year old houses renting for $700 per student per month, utilities NOT included. That's a cool $25,000 income for a nine month rental period, over $33,000 for the year. The normal mortgage, insurance, maintenance and taxes for a $120,000 home come out to be about $15,000 +/- per year, or about $1250 per month. Landlords, if not paying cash for their new holdings, pay off their loans within a few years (if they have a good business plan), eliminating the mortgage aspect of expenses. A paid off house like the one above therefore generates an additional $1000 per month in profits. Being a landlord can be very profitable here if you know what you're doing.

Regarding crime, students are not so much the problem, except in relatively isolated cases of the kind of crimes that pre-adults commit, which are mostly annoyances, albeit sometimes constant. The real problem with students is that they are a movable feast of victims. When they arrive, crime, especially burglaries, robberies and thefts, goes up. When they leave, those go down. Violent crimes are rarely committed by students, except perhaps sexual assaults, which are probably not well-reported by victims or the University.
A problem with students being regularly scheduled victims is that their presence is a lure for thieves to visit other nearby homes. This not only provides ready income for thieves, but, with enough frequency or intensity, makes the neighborhood look bad. People move out, others don't want to live in a high crime area, and landlords move in for the kill.


I've written a lot here, but it just scratches the surface of several contributing, intertwined problems. I'm interested in seeing what others think.

Thornton Crowe said...

Pronesis, this is the point I've been trying to make -- inflated pricing and the atrociousness of it all.

You are absolutely correct regarding crime, the students are setup for victimization both from thieves and, IMHO, landlords who partake in this over inflated pricing. Perhaps it would behoove the university to subsidize more of the off-campus options like UV and UO for students to have a more secure area to reside rather than rent to the landlords mentioned in your post.

Perhaps if that demand went down, the supply would warrant neighborhoods like Camden to go back to the family neighborhoods they used to be before all this madness.

Anonymous said...

The larger rental companies trade properties amongst one another like poker chips.

Phronesis said...

The appearance of large-scale complexes has resulted in a couple of things, neither of them good. A glut in rental housing led to many landlords not being particular in whom they take on as tenants. We see more and more government subsidized (Section 8) housing in single family neighborhoods. Many of those tenants bring, perhaps unwittingly, lesser elements of society and more crime, as the vulnerability of the neighborhoods is realized by criminals. Many of the renters tend to stay tenants at any one given place for three to six months before they move on. This does not promote neighborhood stability; in fact, it promotes instability, a downturn in the living, breathing structure and health of neighborhoods. Fewer people know one another. Fewer people look out for one another. Fewer people report crimes. More crime occurs. More homeowners move out, citing crime as a prime reason. Landlords swoop in, their job of blockbusting done to bring home values down.

Anonymous said...

One of those high ranking public officials IS a slumlord, second generation at that.

Thornton Crowe said...

Phronesis, once again spot on. I should have interviewed you for this piece as you are in the 'know.' Thanks for helping to explain the way things work around Salisbury regarding the rental issue. Much appreciated.

Anonymous said...

Oh, the county council president. Wasn't he on city council, too?

Anonymous said...

The truth must be told and people reminded of how Salisbury got this way.

Anonymous said...

And now the mayor is a tool of the slumlords and their SAPOA group. They got him elected to the Council and beat Debbie Campbell who tried to salvage the former single family neighborhoods from the likes of Barrie and the "Dream Team" (Dunn, Cathcart and Comegys). Day is doing more to get a Cracker Barrel than protect homeowners.

Anonymous said...

Day had best be doing more than trying to make himself look good with grand downtown plans. He needs to get a grip on what's happening, and why, in every other corner of the city.

Anonymous said...

they ain't got no buying power, only what the parents allow....except for food & BOOZE! To contribute knowledge to the community, they must be able to get a job.



Anonymous said...

It's the market man, the market! Isn't this America. If you can gouge them do it!