theadanews.com - Ada, Oklahoma

Local News

April 18, 2014

Students, landlords discuss affordable-housing issues

Ada — Students bustled around East Central University’s Centennial Plaza  Wednesday, setting up cardboard boxes equipped with sleeping bags.

About 25 students planned to spend the night in the box city, which was designed to remind people that Ada needs more good-quality, affordable homes.

The box city served as a backdrop for a public forum on affordable housing, hosted by the students in Dr. Christine Pappas’ American government class. The forum focused on college students’ need for low-cost housing, but it touched on other issues as well.

The 2010 census indicated that Ada had 7,640 housing units altogether, said ECU student and panelist Tim Snow.

Citing the most recent data available, he said rent ranged from $255 to $435 a month in 2009.

“That is just the asking price,” he said. “That is not including utilities and the other expenses that other renters need to supply to get their houses.”

Other students reported problems finding good-quality housing in their price range.

“I’ve seen houses that are renting for $1,200 and have holes in the floor, and there are houses that I wouldn’t let my dog stay in,” said panelist Terrance Bonner. “So we’re trying to see if we can fix up our community so it looks a little bit nicer.”

The panel included the city’s community development director, Todd Kennemer, and landlords Richard Hawk and Robert Coats. They fielded questions on a variety of housing-related topics, including the factors that go into calculating rent to landlords’ and tenants’ rights under state law.

Hawk said he takes several factors into account, including current housing market and the prices at comparable properties, when he calculates rent for his properties.

“There tends to be kind of a three-tiered market,” he said. “There’s the lower end of the market. There’s some higher-end, newer things that tend to be in the $700 to $800 range. And there might be a void between that $350 property and that $650 property, which is where I would like to see my properties kind of fit in.”

Hawk said gross rent for his properties should equal at least 20 to 25 percent of their purchase price in any given year, because about half of the rent will go to cover expenses. He added that roof repairs and other major improvements would reduce the amount of money he has on hand, which could result in a negative cash flow for the year.

Coats said landlords typically seek a 20 percent return on their investment in a property. For example, he said, a landlord who invests $120,000 in a three-bedroom, two-bathroom brick house would have to charge the tenant $2,000 a month to reach that goal.

“You say, ‘Well, why do you have to have a 20 percent return?’” he said. “Your return on your investment is based upon what you pay, what I pay per month in taxes and insurance and capital outlay for that house.”

Coats said if he buys a $35,000 home, he will have to make house payments of about $350 each month. He will also pay about $45 to $50 a month for insurance and an additional $45 to $50 in taxes, which would leave him with about $420.

“Well, why don’t we just get the rent down to about $300, where everybody can afford it?” he said. “The problem is, everybody’s not good tenants. They don’t tell you when they’re going to move out. They load up on the 24th or the 27th of the month, and you get a call from their mother going, ‘I was going to tell you, my daughter moved home and she’s not going to be there next month.

“Well, here it is the second or third of the month, and I’m without a renter for a month.”

Coats said landlords must also foot the bill when pets or irresponsible tenants damage a property.

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