Tommy Washbush
Tenants at this Hilldale-area apartment building face rent hikes of 20% and up.
A new property owner at a 144-unit west-side complex is refusing to budge on across-the-board rent hikes of more than 20% despite more than 100 residents signing a petition asking for the increases to be reduced.
Property owner Les Orosz met on Feb. 20 with about 50 tenants at Royal Arms, an 11-building complex near Hilldale Mall built in 1964 that residents still know by its old name, Karen Arms.
He agreed to consider the concerns of residents, but the company is sticking by its rent hikes and new fees for heating and water that amount to hundreds of dollars more every month.
“After our meeting on Tuesday evening, we performed another market analysis of Royal Arms and nearby properties,” Orosz wrote in a Feb. 22 letter to tenants obtained by Isthmus. “After performing our market analysis, we found the renewal rates that were offered are still below market rate and nearby properties.” Orosz bought the property in August after the previous owner passed away.
Revel Sims, an assistant professor in UW-Madison’s Department of Planning and Landscape Architecture who studies housing displacement, says he thinks rent hikes at the complex could be the result of a “renting down” or “filtering” effect that the city and others have been tracking in Madison. When high-end rentals are scarce, more well-off renters sometimes choose cheaper units because that is all that they can find. That crowds out others, who then seek even less expensive units in what Sims calls a “chain” that impacts the entire market.
Savvy property owners, says Sims, recognize that they can charge higher rents at the lower end of the market and still attract tenants from a higher-income bracket who must “rent down” because of the lack of available units.
“Maybe this is indicative of what’s happening in general with the housing market in Madison,” he says. “There’s so much pressure, so little supply coming in that there’s a lot of pressure [to raise rents] on these less expensive areas — what the city might call naturally occurring affordable housing.”
Tenants haven’t given up their fight at Royal Arms, delivering a response to Orosz March 4 signed by 120 residents saying they are willing to accept rent increases up to $150 per month, but that further increases were impossible for many to pay.
“With the costs of living skyrocketing in Madison, we have tenants who fear homelessness, and who stress about not being able to afford groceries or healthcare,” wrote the tenants. “As long as Orosz Properties remains uncompromising on their financials, we do not feel valued or protected while living here. Our faltering trust in Orosz Properties coupled with exorbitant costs will force us to move out en masse, even if it means overcoming significant challenges to do so.”
The letter asks Orosz for a response by March 8.
