Unfair Market? 

The house seemed to exhale stale cigarette smoke when the front door opened. We trudged up the dingy carpeted stairs, over the warped floors and through the grimy kitchen before finding the culprit: an ashtray on a screened-in porch, overflowing with squished cigarette butts. The box of Clorox disinfecting wipes next to it was no match for the stench of stale tobacco.

“How much is the rent?” we asked the young woman showing us the apartment.

“Twelve hundred a month,” she said, “plus a month’s security deposit.”

That two-bedroom apartment, in a multifamily house on Buell Street near downtown Burlington, is typical of what Vermont college students are settling into this month as they head back to campus. And it was typical of what we thirtysomething professionals found during a month-long apartment search this summer.

My wife, Alison, and I were moving here from New Haven, Conn., where we own a duplex in the city’s East Rock neighborhood. The area is enlivened by sidewalk cafés, Yale grad students and a park popular with New Haveners of every color and income level. Our two-story, two-bedroom apartment — with hardwood floors, three-season porch and huge picture windows — costs us $1000 a month in mortgage payments. For the first-floor apartment — a cozy one-bedroom with free laundry, off-street parking and garden space — we charge our tenants $800.

In Burlington, we soon learned what thousands of college kids and others already know: Rents are pricey in the Queen City, and you don’t necessarily get a whole lot for your money.

Paying $1000 to $1200 may buy you rickety stairs, outdated appliances and musty carpets with no laundry or parking. Paying $1300 or more gets you into nicer digs, but Vermont wages put those apartments out of reach for many renters.

Burlington’s impossibly tight rental market isn’t a new story. For years, vacancy rates have been so low that landlords can charge far more than they could if renters had more apartments to choose from. But new numbers from the U.S. Census Bureau show that while rental markets in other cities have relaxed as a result of the recession, Burlington’s is as tight as ever. Rental vacancy rates nationwide hit an all-time high in June — 10.6 percent — leaving about four million apartments unoccupied. Burlington, meanwhile, continues to boast one of the lowest vacancy rates in the country: an astonishing 1.3 percent. In other words, for every 1000 apartments in the city, just 13 are available for rent at any given time. A 5 percent vacancy is considered healthy for a city; anything lower than that is considered “tight.”

That demand exceeds supply lets landlords off the hook for maintaining their properties. “It’s not an ideal situation in terms of keeping costs in check, and the quality and condition of units suffers,” says Brian Pine, assistant director for Housing and Neighborhood Revitalization in the city’s Community and Economic Development Office (CEDO).

Students are largely responsible for driving the need in Burlington. The city’s colleges have built thousands of new student housing units in recent years, as their enrollments have swelled, but it’s still not enough, Pine says. Four schools — the University of Vermont, St. Michael’s College, Champlain College and New England Culinary Institute’s Essex Junction campus (which has since closed) — added 2063 beds between 2003 and this year, according to a survey conducted by South Burlington real estate consultants Allen & Brooks. Yet UVM’s student body alone has increased by 2000 students in that time. In March, the city struck an agreement with UVM and Champlain College to relieve the stress the schools put on the housing market: The colleges will construct hundreds of new housing units in the coming years, and UVM committed to adding student housing on a 1:1 basis relative to increasing enrollment.

The problem isn’t confined to Burlington. Vermont had the tightest rental market of any state last year, at 3.5 percent vacancy. When empty apartments do come up, rents cost more than most Vermonters can afford.

The average “fair-market” rent on a two-bedroom apartment in Vermont increased to $914 this year, as calculated by the U.S. Department of Housing and Urban Development. In Burlington, so-called fair-market rent is $1108 — up from $697 in 2000.

A family would have to earn $36,550 a year to afford that rent, assuming a third of household income is spent on housing. But 52 percent of Vermont’s non-farm employees — 151,000 people — earn less than that, according to a report from the Vermont Housing Finance Agency, an organization that funds and advocates for affordable-housing projects. Rent takes a bigger bite out of Vermonters’ paychecks, leaving less money for food, utilities and everything else.

Gail Okkonen, a retired schoolteacher from Traverse City, Mich., was so incensed at the prices and quality of Burlington rentals that she fired off an angry, unsolicited email about it to the local press, including Seven Days. She spent a month in Burlington this summer helping to care for her newborn grandson. She considered moving here to be closer to family, or finding a better place for her son’s family, so she started apartment hunting. She hoped to pay under $1000 for a “nice” one bedroom.

“Some landlords and rental agents should be ashamed of themselves,” the 54-year-old grandmother wrote. “I have never seen so many high-priced rentals that need new roofs, structural repair, stair repair, siding repair, carpet replacement, ceiling repair, general cleaning and maintenance.”

Okkonen even confronted one rental agent while touring a one-bedroom in the Champlain School Apartments on Pine Street that was going for $800 a month.

“She gave me the whole spiel on what the market will bear,” Okkonen recalls during a phone interview from her home in Michigan. “That’s when I looked her in the eye and said, ‘Well, I’m the market and I won’t bear it, so I’ll take my money elsewhere.’”

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Alison and I scrounged for rental listings wherever we could find them: local newspapers including this one, craigslist, coffee shop bulletin boards and by word of mouth. We responded to dozens of ads, though about half of the landlords never replied. The ones who did kept us busy for several weekends in May and June.

First on the list was the Buell Street apartment with the overstuffed ashtray, a two-bedroom priced at $1200. The place looked like it was hung over from years of killer keg parties. The bathroom was scummy, the kitchen grimy, the wall-to-wall carpets beyond the help of the Rug Doctor. In other words, just the kind of place for which my college roommates and I once paid $600 apiece.

South of downtown, on St. Paul Street, we found a cramped two-bedroom accessible only by a steep exterior wooden staircase. The galley kitchen was barely big enough for the cook; the bedroom barely big enough for the bed.

Peering out the windows at the steep drop to street level, I asked the landlord if there was a second egress, or a fire escape.

“Just the one door,” he said, essentially admitting to what may be a code violation.

Later, our hunt took us to a hardscrabble stretch of Archibald Street in the Old North End. We didn’t immediately find the person scheduled to show us the apartment, but when we peeked inside, a pair of enormous dogs barking their heads off met us at the window. They looked like Rottweilers, but we didn’t stick around long enough to find out. We left the slouching, weathered house without even going inside — it was the only appointment we blew off.

Our experience improved as we learned what our money would buy and which sections of town appealed to us.

On a leafy stretch of South Willard Street, we found a two-bedroom with hardwood floors, a huge dining room and a private bluestone patio just big enough for a picnic table. The rent was $1350 — a price at which quality seems to go up a notch.

Similarly, we saw apartments on College and South Willard streets with wide-open sunrooms and terrific views of Lake Champlain, but at $1475 and $1525, they were way out of our price range.

We looked at a tidy two-bedroom in the New North End, but it was too suburban for a couple of recent city dwellers.

On Walnut Street, we met landlord Stu McGowan, the green-haired Old North Ender who has rehabbed dozens of distressed properties and painted them with bright colors. He arranged to show us a one-bedroom loft he called “the best apartment in the city.”

The avocado-green space had bamboo floors, modern appliances, 12-foot ceilings and energy-efficient everything. The rent was $1200 a month, a price McGowan said he would drop even lower if mortgage payments on the newly built house didn’t prevent it.

We thought we’d struck gold, but by the time we got there, McGowan was locking the door and heading back to his parked car. The apartment was already rented. “Someone just took the place,” McGowan told us ruefully. “She was the first one to see it.”

That rent-it-on-the-spot approach is something McGowan sees a lot in a market where competition is “beyond fierce.”

“I dread putting stuff on craigslist,” he says. “I just get hammered, 100 emails in a day or two. This is the worst I’ve seen it in 10 years.” The number of apartments for rent is one thing. The shape they’re in is another.

The Burlington Code Enforcement Office investigates hundreds of housing complaints each year, from front-lawn trash heaps to miss ing smoke detectors and broken stairs.

It comes with the territory in a college town where much of the housing stock is 80 to 100 years old and winters exact a heavy toll, says Gene Bergman, the city’s director of code enforcement. His inspectors see a lot of apartments that are badly run-down but still within minimum housing standards, he says.

“You go into a place that has one light, you go up to the third floor and it’s just dirty,” Bergman says. “So it looks really shabby. That is not in itself a housing code violation.”

Violations brought to city hall’s attention usually get fixed, though it often takes two or more follow-up visits by inspectors. What go unaddressed are problems not reported because tenants fear eviction or retaliation by their landlords, Bergman notes. Learning the difference between shabby housing and actual code violations is the smartest thing a renter can do, he suggests.

Bergman says that, overall, Burlington’s housing stock has improved over the years, with the number of “really egregious violations” going down.

All this begs the question: If demand for decent, affordable apartments is so high, why aren’t new ones going up all over town?

CEDO’s Brian Pine names four factors: limited land supply; cost of land; a lengthy, expensive and unpredictable permitting process; and fear of lawsuits by opponents or others.

Real-estate consultant Mark Brooks adds one more: money.

“Apartments aren’t exactly cash cows,” says Brooks, whose South Burlington firm Allen & Brooks does extensive surveys of the area’s rental market twice a year. “Your rental income gets eaten up pretty quick between taxes, insurance and utilities. It costs a lot of money to build apartments.”

A few builders have apartment developments in the pipeline, Brooks says, but condominium sales have been far hotter in recent years. That could change as condos sit unsold and their owners consider renting them until the market picks up. With building lots scarce, that might be the likeliest place to look for new apartments in the near future.

“It’s like beachfront property here,” Stu McGowan says. “They’re not making more of this stuff.”

For our part, Alison and I finally settled on a charming two-bedroom apartment in the Old North End with a sunny, eat-in kitchen, a communal garden out back and a price that lets us save a little money. But not before gaining a healthy appreciation for what McGowan dubs “the impossible dream” of finding a decent, affordable place to live in Vermont’s Queen City.