Is the Rental Housing Market Becoming Saturated in East Lansing?

Above: Two projects set to open this fall: The Landmark (left) and The Hub (right).

Is East Lansing’s rental housing market becoming “saturated” by big new developments? And if so, what will that mean for East Lansing?

Those are questions now being raised at East Lansing’s Planning Commission meetings, with Vice Chair Kathy Boyle in the lead.

With the support of other Planning Commissioners, Boyle asked the City’s Planning staff to obtain data on existing and new rental properties in and near East Lansing.

As a consequence of that, East Lansing Community Development Analyst Jake Parcell produced a memo (see it here) indicating that there is currently rental housing for approximately 28,254 people in East Lansing. By fall 2020, Center City’s Landmark and Newman Lofts projects, The Hub (at Grand River Avenue and Bogue Street), and The Abbot (at Abbot Road and Grand River Avenue) together will have added housing for about 1,450 more people, or about 5 percent more.

New housing is also showing up just over East Lansing’s northern, western, and eastern borders, adding apartments for thousands more residents. (The City’s study did not include a number of new or recently approved projects.)

In remarking on the matter at the May 8 meeting of Planning Commission, Boyle said the new big apartment buildings across from MSU “will no doubt be filled,” but she said that that is not the only issue: “We also need to ask what impact further large developments may have on the other housing available in the City.”

Boyle suggested that the City needs to determine whether these new developments will reduce the ability of landlords of older properties to find renters.

She and others have also suggested that planners need to consider how new housing projects may impact the City’s finances and the community’s well-being. Some have particularly raised concerns about the possible impact of a lot of new housing downtown on the City’s north side, as students would typically rather live near campus.

At the May 8 meeting, Boyle also said that she thinks “this is something we need to consider in making our planning decisions.” She further explained that “just because housing can be filled, doesn’t mean that it’s needed.”

She suggested that in future housing studies, population projection be considered, along with the effects that potential developments would have on the City and its neighborhoods.

Responding to Boyle’s remarks, Planning Commissioner Dana Watson expressed concern that families who want to live in East Lansing are unable to find family-appropriate, affordable housing. She said that if they look at rental housing, they find that most of it is not suitable.

This is partly the case because many rental properties are in student-heavy areas that can be loud at night and on weekends, that lack play space and a culture for children, and that have internal set-ups aimed at multiple adults living together rather than being designed for parents with children.

“We talk about that we want places for families and this is a good school [district], but not everybody can afford to buy houses in East Lansing, and so then it’s rental housing,” Watson said. “But sometimes it seems like a lot of the rental housing is not being created for families that want to move into this community.”

Many neighborhoods have passed rental overlay zones to stop the conversion of owner-occupied houses to rentals. This is typically done to avoid having undergraduate student renters move in, but it also keeps out graduate students and others, including people with school-age children.

According to Boyle, many of the rental apartments now being constructed can’t be converted for families in the future.

“The developments that we are reviewing and approving are being built in a manner that makes them unsuitable for conversion to family housing, should they not be able to rent to their anticipated market,” Boyle explained.

Commissioner Jack Cahill viewed this issue differently, saying, “I would hope that with the new apartments and students moving into them from houses in the neighborhoods, that those houses will then become available for families to move into.”

Boyle responded, “I’ve heard that hope repeatedly” but “I don’t think that would happen.”

The houses, she noted, are older and often not set up for modern family life. She gave the example that some have garage space for only one car (or no garages).

Boyle opined “that the rental houses might be the last dominoes to fall if the housing market does become saturated,” noting that there is always going to be a segment of the student population that wants to live in houses together.

“I would certainly hate to have us go forward and build apartment housing for students based, in part, on the hope that the houses in our close-by neighborhoods will then convert to family ownership, because I just don’t think that’s a likely thing that’s going to happen,” Boyle said.

East Lansing Planning and Zoning Administrator David Haywood agreed with Boyle, saying that students currently living outside East Lansing might move to within the City limits if existing rental houses are vacated.

Said Haywood, “I think that there is a population of students that don’t live in East Lansing, on campus, or even on the fringe that will likely move in,” Haywood said. “I think you’re right, there’s a long transition period before we see anything free up that close to our downtown.”