Conor Daly: Gaining an off-campus monopoly

Right about now, Dave Adelman must be sitting back and reflecting on just how good he has it.

After all, with the start of new leases for Campus Apartments' residential properties, he is about to once again watch large sums of money from the outlandish security deposits and first month rent payments that they charge students flow into his coffers.

When some students first begin to look for off-campus housing, many are surprised by the high rents that CA charges. But to off-campus veterans, the company's exploitation of students and its perpetuation of an artificially inflated real estate market has become an inseparable element of living off campus.

No one who has dealt with CA and had the experience of renewing a lease is ever surprised when they hear stories about someone's rent jumping by 17-plus percent from year to year. Despite the fact that these increases are now the norm, the real reasons for them go unacknowledged by Campus Apartments.

Given the reality that the area west of 40th Street is experiencing a commercial boom, some rent increases are naturally expected, but for many, the rent increases they see are incompatible with that reality, and they logically turn to their landlord for explanation.

Many such tenants find themselves laughing at the pitiful excuses the company comes up with as reasons for the hikes, such as a dramatic rise in insurance rates post-Sept. 11. But most eventually realize the real reason why rents keep getting higher -- there is little standing in the way.

Despite the fact that this University holds considerable power over the goings on in University City (and let's face it, Philadelphia in general), there has been little effort by the administration to address the concerns many students have with the rental market of off-campus residences.

Even worse, evidence from last year suggests that Penn has even been supporting CA in its activities. In October, the University turned over management responsibilities for 900 of its residential units, formerly managed by the now-defunct University City Associates, to Campus Apartments. Penn's Facilities Division saw that it would be cheaper for the University to turn over management of the properties to CA than for it to continue to manage them through UCA. Vice President for Facilities and Real Estate Omar Blaik said, at the time, that the University chose Campus Apartments because it "was a local player that understands the market." Yeah, understands how to inflate and dominate the market, definitely.

By outsourcing its properties for management, the University was putting itself in the position to reap the benefits from the inflated real estate market that CA perpetuates. No wonder the administration has done very little to address or even identify the serious problem of finding affordable housing near campus.

It likely comes as no surprise to the majority of us that Penn would take such a course of action because it was the best thing for the bottom line. What is a surprise is that Penn took such a course of action, without a thought about how it too is being used by Campus Apartments.

The University, along with several other nonprofit entities, established a special services zone, the University City District, in the late 1990s, to improve the surrounding community with respect to sanitation, public safety and economic opportunity. The University has since invested millions of dollars to develop University City, and as the UCD's work has continued, real estate prices have risen, to the benefit of companies like Campus Apartments.

However, it has been the University that has picked up the check for much of the UCD's operations, while Campus Apartments has seen a tremendous appreciation in its real estate holdings, itself assuming little of the cost. It is sitting back and reaping the benefits of the University's work.

Worse still, the "double dipping" of Campus Apartments, both in overcharging for rent and its realization of higher real estate value through the University's work and investment, means that the company is able to continually leverage against the properties it already owns in order to constantly acquire new properties -- like, at present, its acquisition of the 4200 block of Walnut Street. That means that unless something is done soon, the problems of off-campus living will only get worse.

Through the creation of the UCD, in part to increase security and beautify University City for the benefit of its students, the University was acknowledging that its responsibility for students did not stop at 40th Street. What we need now is for the administration to expand its sphere of responsibility and come to the aid of a good portion of its students who are being held hostage by an artificial real estate market.

The University is not powerless in the face of Campus Apartments and the inflated residential real estate market. It is still the big kid on the block in University City; it just needs to flex its muscles.

Conor Daly is a senior Political Science major from Boxford, Mass.

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