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Posted on Thu, Jun 13, 2013 : 5:59 a.m.

Ann Arbor's changing neighborhoods: How will downtown development affect fringe student properties?

By Lizzy Alfs


Jane Deering has lived in her home on Dewey Avenue in the Lower Burns Park neighborhood since 1977. Over time, she's watched homes on the street be converted to student rentals.

Courtney Sacco |

When Jane Deering purchased her home on Ann Arbor’s Dewey Avenue in 1977, she loved the mix of families, elderly residents and University of Michigan students living in the neighborhood.

“It was a great family street with maybe a few students. When my kids were young, there were actually other kids for them to play with and that was lovely,” she explained.

Thirty-six years later, Deering said the street has changed.

Many of the single-family homes on Dewey Avenue — in between State and Packard streets and just blocks from U-M’s athletic campus — have been converted to student rental properties. “For Rent” signs are posted on many of the homes, advertising fall move-in dates and rental rate specials.

But with thousands of new student apartment units coming online closer to campus, many landlords, residents and city leaders are asking the same question: How will the new downtown apartment buildings affect the residential neighborhoods surrounding campus?

A smart investment

For decades, investors saw opportunity in neighborhoods like Lower Burns Park, the Old West Side and near East Ann Street by U-M’s medical campus. As the university’s enrollment grew and the student population spread out around town, investors purchased single-family homes to convert to student rentals.

“In the 70s, 80s, 90s and even 2000s, nearly every house that came on the market in those neighborhoods…they were almost immediately snapped up by investors who would divide rooms, maybe put in another bathroom, and then fill them up with students,” explained Ann Arbor Mayor John Hieftje.


A home on Dewey that has been converted to a student rental property.

Courtney Sacco |

The process to convert homes to rentals was simple and it was a good return on investment, said Jeff Starman, owner of Madison Property Company, which owns or manages about eight homes in the Lower Burns Park neighborhood.

“(Lower Burns Park) was a nice entry point, so I think a lot of new investors or smaller investors saw that area was turning heavily to rental,” Starman said. “Most of the houses we own or manage, I believe, were bought from owner occupants.”

Neighborhoods shifted, and in some areas closer to campus, it led to an exodus of families that didn’t want to live in homes surrounded by students.

Leasing pressure?

The downtown and near-campus apartment market has welcomed more than 1,500 new beds in the past several years. Approved and under-construction projects such as The Varsity, 413 E. Huron, the Pizza House development and Ann Arbor City Apartments will result in an additional 1,300 beds in the coming years. Meanwhile, the university has plans to build a graduate student dormitory on South Division Street.


The 413 E. Huron development team pictured in Ann Arbor with the Varsity high-rise under-construction behind them.

Ryan J. Stanton |

Despite the new developments, Starman said leasing has been stronger than ever at Madison Property Company’s rental properties on the fringes of campus.

“So far, there’s no evidence that the students aren’t still abundantly renting in those neighborhoods,” he said.

He said rental rates also increased about 5 percent to 8 percent this year.

Holland Management owner Gretchen Sleamon, who also owns and manages student rental properties, said her houses on Granger and Dewey are leasing earlier and at higher rates than previous years.

Sleamon said a number of factors — such as U-M’s dormitory renovations putting more pressure on the rental market, and the high premiums to live in the newer high-rise buildings — could be drawing students to live on the outskirts of campus.

“The clientele going to the high-rises are not the same people going to five-, six-, and eight-bedroom houses,” she explained. “Their parents can afford to pay $1,000 per bedroom, whereas the kids who rent on Dewey or Granger are more like people who can afford $500 per bedroom.”

Since the neighborhood between State and Packard streets also is close to U-M’s athletic campus, Sleamon and Starman said the neighborhood has always been a big draw for student athletes. They also rent their properties to a lot of graduate students. Starman said he’s waiting to see if that changes with the new units coming online.

“The Ann Arbor student rental market has been so resistant for so long, it’s by far the biggest change we’ve seen with high-rises coming up,” he said.

“I would think, ultimately, there will have to be some contraction (where students move closer to campus), but there’s always going to be a large group of students that really like the house rental kind of environment,” he continued.

Return of owner-occupied homes

Today, Deering’s home on Dewey Avenue is surrounded by student rentals, and several times each week, she asks neighbors to keep noise levels down or has to call the police to break up parties. She’s also had her car vandalized twice and she sees signs of neglect or disrepair on some of the homes on the street.

Although she’s considered moving several times, Deering feels attached to the home where she raised her kids and spent 36 years of her life. She’s hopeful the street could eventually convert back to single-family, owner-occupied homes as more development occurs downtown and near campus.

“People are always encouraging me to leave Dewey, but I don’t want to leave,” she said. “I hope that my neighborhood can shift back to more families. I loved this neighborhood and I love this house, and I don’t want to be forced out by drunk students.”

Hieftje said the Clean Communities Program he started in 2002, which helps to combat trash concerns, was a huge help for those neighborhoods. He said the city used to receive a lot of complaints from homeowners who were struggling to make family life mesh with their student neighbors.

“We had neighborhoods coming to us asking for zoning changes,” he said.

In 2008, Ann Arbor City Council voted to change the zoning of Golden Avenue in Lower Burns Park from multiple-family to single-family housing. Pre-existing rental units on the street were grandfathered in, but the rezoning was passed so that more multi-family dwellings weren’t developed.

Still, Hieftje said it’s difficult to determine who lives in a single-family home, since the zoning allows for up to four unrelated adults.

“It’s very difficult to regulate,” he said. “So one of the hopes, as the city looked at the possibility of more residential development downtown, is we would take the pressure off these neighborhoods, and I’ve seen evidence of that.”

The city also appointed the R4C/R2A Zoning District Study Advisory Committee in 2009 to examine the multiple-family dwelling district that surrounds downtown, but no changes have come about yet. Ann Arbor City Council is expected to consider a set of recommendations about the zoning districts in the coming months.

Alex Milshteyn, an Ann Arbor Realtor with Howard Hanna, said he’s starting to see homes being converted from student rental properties back to single-family homes in neighborhoods surrounding campus. That’s partly fueled by the low inventory of homes for sale, he said.

Milshteyn recently had rental property listed for sale on Granger Avenue, and he received three offers on the house from single-family dwellers. He was the project manager for converting the house back to a single-family home. Although that took a $10,000 investment, Milshteyn said he’s seeing evidence that buyers are willing to pay to convert a property back to single-family.

“For the first time, when someone is looking for a single-family home, I started looking at rental properties to see what’s out there,” he said.

“The reality is, I think (the student rental market) is oversaturated close to campus,” he said. “I think we have too much. So I think, ultimately, it’s going to play out that, especially in Lower Burns Park and parts of the Old West Side, those homes are going to become more single-family.”

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Lizzy Alfs is a business reporter for Reach her at 734-623-2584 or email her at Follow her on Twitter at



Sun, Jun 16, 2013 : 2:44 a.m.

While I really respect Alex Milshteyn, the market for student (especially grad student) rentals IS NOT over-saturated, except perhaps there being too many run-down homes in the so-called student "ghetto." I know many responsible graduate students who would LOVE to live in Lower Burns Park, but 1) can't afford those that are well-kept, 2) can't snap up the ones that are priced reasonably and are well-kept fast enough, and the largest obstacle, 3) get frustrated and give up on companies who don't maintain apartments/converted houses, but expect to be able to charge AS IF they did. The apartment I now happily have in a beautiful house in this neighborhood is mine because I was LUCKY: I was the first scheduled person to view it, and offered to write out a check for a security deposit the moment the tour was over. My landlord had over a dozen other tours scheduled for that afternoon. That doesn't *sound* like over-saturation to me...

Ypsi Russell

Fri, Jun 14, 2013 : 4:40 p.m.

Speaking of the student ghetto, did the police ever solve that rash of arson incidents there a couple of summers ago?


Fri, Jun 14, 2013 : 3:55 p.m.

Fond memories of living on Dewey Street. Ms. Dearing did put up with a lot. The U of M baseball players that lived across from her in the 90's were way out of control, probably explains their losing record.


Fri, Jun 14, 2013 : 12:49 p.m.

It does not matter where you put students, they are going to trash their surroundings. I have been involved with building student housing and U of M buildings on campus and invariably within 1 week they have destroyed something.


Thu, Jun 13, 2013 : 8:53 p.m.

And while I agree that Dewey has more rentals than it did 15 years ago, I'm not quite sure that's true of Lower Burns Park as a whole. On my street -- two blocks from Dewey -- we've dropped from two rentals to one. And the average time residents have lived here -- including the renters -- is 22.25 years by my calculation. So there's lots of variation in the neighborhood. . .


Thu, Jun 13, 2013 : 7:29 p.m.

Despite the new developments, Starman said leasing has been stronger than ever at Madison Property Company's rental properties on the fringes of campus. "So far, there's no evidence that the students aren't still abundantly renting in those neighborhoods," he said. He said rental rates also increased about 5 percent to 8 percent this year. _____________________ Annual increases of 5-8% are not sustainable. That is way above inflation. Especially for some of the student rentals in old houses that haven't been kept up to date or repaired.

The Picker

Fri, Jun 14, 2013 : 12:36 p.m.

I guess the right rate is what the market will bear. Whats your point?, maybe the higher rates are what is necessary to fix-up these old houses.

Bryan Ellinger

Thu, Jun 13, 2013 : 7:07 p.m.

Cool to see my old band house (blue with for-rent sign) pictured in this article. There were at least four bands rehearsing in three houses on Dewey back in the mid eighties. We threw some swell, wholesome parties on that street. ;-)


Thu, Jun 13, 2013 : 7:04 p.m.

I lived on Michigan between E. Univ and Wells. My parents brought me to this house when I was born and I loved the street. Between 1978 and 1997 the neigborhood changed completely. The beautiful old homes had 7 or 8 people (with one car each)living in them. The retirees passed away and the families moved away. The drinking, fire crackers, traffic and golf balls off the siding at 3:00am were bad enough but when we were shot at with a bb gun we finally moved away. The house is still a rental but not to students. It wouldn't take much to return the neighborhood to its former friendly, mixed living beauty.


Thu, Jun 13, 2013 : 7:30 p.m.

I agree. I knew several older couples in that neighborhood who moved away in the 1990's when things really went downhill. Too bad. It's such a nice area that has deteriorated with college rentals.


Thu, Jun 13, 2013 : 6:50 p.m.

One option to preserve the skyline would be to build out more instead of up...... Oh, wait, mayor Leiftje wants that greenbelt finished. So, enjoy the view.


Thu, Jun 13, 2013 : 4:46 p.m.

For those complaining of "ruining" the skyline; this is a necessary move with the way UM has been expanding. UM has built an entire campus worth of new buildings in the last 10 years alone, the city itself is only so big. I think its good for traffic, and it will clear out some of downright awful looking properties.


Thu, Jun 13, 2013 : 2:35 p.m.

Could this spell the end of the student ghetto as we know it?


Fri, Jun 14, 2013 : 1:58 p.m.

regular "There has been a student ghetto for 170+ years" And now we know why! Your "lets all live in a pigsty attitude" is rather amusing. Maybe you should move to the boondocks!


Fri, Jun 14, 2013 : 12:53 p.m.

"live in dorms for the entire time they are at college. " Your "get off my lawn!" attitude is rather amusing. You might consider moving to Dexter or Saline. Or a retirement home.


Fri, Jun 14, 2013 : 12:46 p.m.

Picker Spoken like a seasoned slumlord or sloppy student. Certainly not someone that takes some pride in their environment.

The Picker

Fri, Jun 14, 2013 : 12:30 p.m.

A2cents,JRW , that a pretty selfish attitude, students and slumlords are citizens too. Just fix yourselves a cocktail, draw a warm bath and try to get over this anger.


Thu, Jun 13, 2013 : 7:32 p.m.

Well, if it roots out some of the slum landlords, I'm all for it. Some of these slumlords are really a disaster, charging extortionist rents on slum properties.


Thu, Jun 13, 2013 : 4:53 p.m.

I think all students should have to live in dorms for the entire time they are at college. This would reduce the negative atmosphere, keep them all in one area, and dorm rules certainly do prevent a lot of drunken parties, they would be safer, we would have less slumlords. Our town can still reap the financial benefits of all of their spending, without having to deal with the mess.


Thu, Jun 13, 2013 : 3:35 p.m.

There has been a student ghetto for 170+ years. You expect that to change because someone bought a former rental on Granger?


Thu, Jun 13, 2013 : 2:34 p.m.

Dense development downtown only positively impacts surrounding neighborhoods... Students want to live in newer luxurious offerings and this helps certain areas become more affordable to students nearby, or as been stated over and over... single families are snatching up houses because of the quality of life being so close to downtown.... People, this is a great problem to have... A changing downtown is a good thing.. It is going in the right direction....


Thu, Jun 13, 2013 : 11:02 p.m.

No, not the right direction. Even the members of DDA will admit that they would prefer that the highrise buildings being constructed were not all intended as student housing. Everyone has to wait until all the student residences are built before assessing the effects on downtown. The buildings themselves are certainly not attractive and the contributions that the students add to "vibrancy" and "economics" is yet to be seen.

Dirty Mouth

Thu, Jun 13, 2013 : 1:39 p.m.

I agree with Ann Arbor Realtor with Howard Hanna, homes are being converted from student rental properties back to single-family homes in neighborhoods surrounding campus including Water Hill. So far 4 homes have been sold and converted in the Water Hill neighborhood just recently.

The Picker

Fri, Jun 14, 2013 : 12:21 p.m.

It's called Spring Hill on the old maps of the city. Water Hill was made up just a couple of years ago, probable by a Realtor !


Fri, Jun 14, 2013 : 5:20 a.m.

Been in A2 for 27 years and have seen this neighborhood slowly gentrify ever since. You are correct in the description of how it used to be. Always a nice walk up to Sunset. Never felt unsafe there. I also think the "Water Hill" moniker is a bit contrived. The only students I ever see there are walking to Mack school.


Thu, Jun 13, 2013 : 11:09 p.m.

"Hipster Hill". You heard it here first!

Dirty Mouth

Thu, Jun 13, 2013 : 10:30 p.m.

regularjoe, actually, that's not right. For years, WaterHill was an impoverished neighborhood largely populated by Ann Arbor's lower and working classes, including students. Now, it is turned into Hipster heaven.


Thu, Jun 13, 2013 : 3:32 p.m.

Water Hill is not a student neighborhood. That neighborhood has been slowly improving for the last twenty years. Not really the focus of this story but a worthy story in it's own right.

Larry Ryan

Thu, Jun 13, 2013 : 1:26 p.m.

The new buildings downtown are going to do more than anything else could have to improve Ann Arbor's neighborhoods! We and our friends living in near campus neighborhoods are all seeing this, homes come on the market and for the first time in years, families are buying them instead of investors. This is all good! Thank you for writing this story Lizzie.


Thu, Jun 13, 2013 : 1:06 p.m.

This still does not fix the problem for students who come to U of M without the ability to pay for expensive housing. These highrises at $1000 a bed do not appear practical for the average undergrad. When we looked at affordable housing for our students, we were met with a lot of "fire trap" type of old homes converted to apartments. Many of the homes we saw, that had been converted into student housing were not kept up well, and they appeared to squeeze as many "beds" as they can into small spaces. I would much prefer dormitory type housing which in my experience was cleaner, safer and we did not have to deal with owners unwilling to repair problems. The homeowners that have been renting poor quality housing to students will now have to offer better service once there is more competition for student housing dollars.


Thu, Jun 13, 2013 : 4:47 p.m.

Lizzy I was talking about safety hazards. One house we looked at had 4 students living in attic rooms where in an emergency getting out would have been difficult. At another, the front door did not close properly and therefore could not be locked, another had no smoke detectors on the second floor, when asked about it, the landlord said the ones downstairs were loud enough to hear when someone was upstairs. If these homeowners want to get top dollar for their "hodge podge" makeshift apartment/homes, then may wish to consider fixing them up a bit., as these new apartment buildings are going to create more competition for them.

Lizzy Alfs

Thu, Jun 13, 2013 : 1:50 p.m.

You do get a lot of housing "quirks" when you live in some of the converted houses. My house at State and Arch when I was in college was totally hodgepodge. Pretty sure I slept in a converted sun room that was miserably cold during the winter and unbearably hot in the summer!


Thu, Jun 13, 2013 : 12:43 p.m.

On the one hand I hope that the student housing downtown is becoming saturated with all the new highrises which have been constructed recently as well as several more nearing completion. If competition for the wealthy student lessee increases maybe developers will be discouraged from additional construction. While one might believe that the additional student housing added downtown may compete for students who leased rooms in close-by neighborhoods and cause leasing rates to reduce in the neighborhoods, the high price for leasing bedrooms in new highrise buildings may actually raise the cost of leasing in the neighborhoods. If students reject the high priced highrise living then more competition for neighborhood housing can allow leasing rates to go higher there.


Fri, Jun 14, 2013 : 5:36 a.m.

Rental rates for student housing have never gone down. During the recent downtown, rates were generally flat for a number of years and now are returning to the average 3% annual increase.

Lizzy Alfs

Thu, Jun 13, 2013 : 1:48 p.m.

@Veracity: You're 100 percent correct. I have talked to a number of landlords during the last year or so, who have all said the same thing - if anything, the new high-rises are actually allowing them to raise rents a bit. If a high-rise unit is $1,500 per bedroom and a fringe property was $500 per bedroom, landlords are saying why not raise it to $600 per bedroom? It's still a lot less expensive than the new buildings.

Linda Peck

Thu, Jun 13, 2013 : 12:39 p.m.

This is an article that speaks to the issues. Thank you, Lizzy. Hopefully, we will see a better mix of single family and and student dwellings near the campus, as it was decades ago. I remember the Dewey neighborhood and other campus neighborhoods back in the 1970s. It was a better mix, and more pleasant to live there as a result. I lived in the Burns Park area with my daughter for the years she attended the Burns Park school and it was so pleasant.

Lizzy Alfs

Thu, Jun 13, 2013 : 1:46 p.m.

The mayor said that when he was growing up in AA he remembers going to his friends houses on White Street and over in that area. At that time, it was many more families.Also - Jane Deering had very found memories of sending her children to Burns Park school.

Margaret Leary

Thu, Jun 13, 2013 : 12:36 p.m.

Lizzy, thanks for writing about this and doing it so well. This matter--the possibility that students will leave the converted single family houses--has been on the horizon for quite some time. Converting the houses into single family can be very expensive--removing walls, plumbing, but also repairing the damage done by decades of student residency. The city could be a better place for all of us: students and others desiring the high-rise density in those buildings, and income-earning families with children or relatives in the buildings and neighborhoods originally designed for that, will result in a bigger tax base, better kept neighborhoods, fewer people needing to drive, and overall improvement in environmental sustainability. We have the infrastructure--use it. It would be interesting to know if there are similar cities that have created good models. One final point: the density of households in AA has dropped from about 4 in 1950 to under 2 now, i.e. underutilization of housing stock.

Lizzy Alfs

Thu, Jun 13, 2013 : 1:39 p.m.

@Margaret Leary: I just tried doing a couple Google searches, and found this article about homeowners fighting the student rentals in a neighborhood in Syracuse. "We're not squeamish about living with students," says Michael Stanton, head of the homeowners association, known as SEUNA. "The thing is that, if the current trend continues, there won't be any families. In a matter of years, they'll all be replaced by rentals."


Thu, Jun 13, 2013 : 12:56 p.m.

Won't returning them to single-family dwellings reduce the tax base (ignoring the new high-rises) since they'll be more likely to be taxed at the "homestead" rate?


Thu, Jun 13, 2013 : 12:13 p.m.

Keep running that picture of the 413 team with the other high rises in the background, with special thanks to the DDA and our pro-development council members and mayor. What an eyesore! That doesn't even look like Ann Arbor, I am sorry I will never get used to that sight. Terrible design, cheap facades, tiny windows, looks more like an old hospital or boarding houses. And it is ours forever. It doesn't matter how many homes are converted back to single family, it will never make up for ruining the skyline like this. And if and when those houses do convert back, we will still have the same bones of the house, that is the advantage with the old method of building student density. We didn't have to tower above neighborhoods, and strain infrastructure to do it. You just had to put up with couches on porches and party cups in the yard.


Thu, Jun 13, 2013 : 11:10 p.m.

The density crowd hates this kind of comment, I see. To argue against towering structures on a purely aesthetic basis is too subjective for some? If you like that look you must be in heaven, and there is plenty more to come. But art is subjective too. Can I launch arguments against the public art program on aesthetic grounds?


Thu, Jun 13, 2013 : 12:32 p.m.

Well said!


Thu, Jun 13, 2013 : 11:15 a.m.

Lizzy, this is an informative, well-written article.

Lizzy Alfs

Thu, Jun 13, 2013 : 1:30 p.m.

Thank you, dd. I appreciate that!

Chase Ingersoll

Thu, Jun 13, 2013 : 10:34 a.m.

Many of you really have no appreciation for how fortunate you are to have this problem.


Thu, Jun 13, 2013 : 2:21 p.m.

Right - vandalism and persistently disruptive neighbors are a privelege!


Thu, Jun 13, 2013 : 2:15 p.m.

Many people worked hard to have this "problem."