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BYU housing policy drives market
Neighborhoods, non-students fed up with situation

PROVO -- It doesn't take a rocket scientist to figure out why Tabitha Fergis' boss values an endorsement from Brigham Young University to be able to rent to students.

With the BYU endorsement, a four-bedroom unit at the College Terrace apartments Fergis helps manage can be leased to eight students for about $230 each per month.Although the rental complex is closer to Orem's Utah Valley State College than BYU, the owners have agreed to enforce strict rules established by the school owned by The Church of Jesus Christ of Latter-day Saints.

Why? Because the student-housing business can be a solid business -- and owners also can also turn to the school for help with deadbeat or rowdy students, Fergis said.

Without the approval, that apartment would be rented to a family for about $900 monthly, $1,200 less a month than could be earned with the school's approval.

Like any college town, Provo's property owners capitalize on the demand for student housing. Some 60 percent of the housing stock in the 110,000-resident city is rental property.

High numbers of rentals -- and homes leased to up to eight students -- has concerned some neighborhoods. As a result, Provo is entertaining a zoning rule that would, among other restrictions, prohibit owners from renting basements or upstairs apartments.

But renters in the metropolitan county seat -- particularly singles who are not students or members of the LDS Church -- are faced with other challenges not found in other Utah cities. Many say they find that BYU's policies governing where single students under 24 can live in large part drive the Provo rental market.

Landlords who want to attract non-married BYU students to their off-campus apartments must agree to enforce specific rules.

Only owners who pledge to uphold the honor code and have apartments that comply with Provo's building code -- plus have such amenities as desk space for each student, additional lighting, latches on windows and window screens -- can become approved. BYU requires that apartments where single students live must be segregated by gender, prohibit tobacco, drugs and alcohol on the premises and ban overnight guests of the opposite sex.

Members of the opposite sex also cannot be in bedroom quarters. Night curfews at "university approved" housing are 11 p.m. weekdays, 1:30 a.m. Fridays and midnight on Saturday.

"If a single man wanted to live by himself in an apartment, Provo doesn't have something for him, " said Vern Keeslar, a planner in the city's community development office. "For a single person to find it in Provo, it doesn't exist."

Julie Franklin, BYU's director of housing, said the school counts about 20,000 available slots for students in apartments that have been approved by the university. BYU enrolls about 30,000 students each semester.

About 70 apartment complexes and 70 condominium complexes in Provo are listed as BYU-approved. At last count, some 1,350 landlords have pledged to hold fast to the school's rules for a chance to attract students.

John Pace, manager of BYU's off-campus housing office, said the school-approved housing makes up about 20 percent of the area's rental market. But that figure also counts the apartments that do not need approval because they rent to families.

Only single students not living with a family member must live in BYU-approved housing.

Pace has heard the complaints that BYU's rules impose a hardship on those seeking housing free of the moral code. Housing officials often hear that non-BYU students say they must live in BYU housing because there is no other place to go.

But BYU sees a different picture.

According to BYU's calculations, the majority of housing stock in Orem and Provo is not approved by the school, and tenants are not asked to live by the school's moral code. Some estimates indicated a 4 percent vacancy rate in the area.

"There's been some criticism that there's only BYU-approved housing," he said.

But he also points out that many UVSC and vocation-training students seek out housing that is BYU-approved because they enjoy living with people of similar standards.

Plus, BYU student apartments are usually furnished, and there are more operating costs associated with student housing, said David Freeman, part-owner of Glenwood International Properties, which provides housing for about 4,000 students.

With single-student housing, operating costs take about 50 percent of the money earned. For traditional rental markets, about 30 percent of incoming money is used for operations, he said.

"Running a single-student apartment complex is a cross between running an apartment and a motel," he said.

Consider: Students are transient, moving every six to eight months. There is more wear-and-tear on furnishings. And students don't have sterling reputations for being clean.

"If you get four or five years out of a couch, you're doing well," Freeman said. "There's a substantial investment in property."

His company spends a lot of money on payroll, mortgage payments and taxes. With recent tax increases, he will pay $450,000 additional taxes over the next several years.

So, is the business lucrative? "Yes and no," he said.

There's about a 10 percent to 15 percent cash flow return -- but the business can be risky, especially in the summer, when apartments aren't full and students rent for nearly half the price.

To Freeman, BYU's off-campus housing office is an advocate for the students. Each year, teams from the school inspect each of Freeman's 770 apartments for regulation violations.

"BYU is seen by residents as oppressive," said Freeman. "But BYU really works hard to look out for the students."

University officials spurred an outcry in 1997 when they began requiring all students living in approved housing to be enrolled in a religion class of the LDS Church Educational System.

The policy was yanked after many community members and students at UVSC who live in BYU-approved housing because of convenience and proximity said it smacked of religious intolerance.

After the housing brouhaha, UVSC created a housing office to help students find available apartments in Orem and Provo. Officials at the school say their students often complain about the area's dearth of affordable, non-BYU approved student housing.

Before that, in 1994, Utah's American Civil Liberties Union chapter challenged the housing policy, saying that Provo-area landlords discriminated against potential renters on the basis of gender, marital status and whether they are BYU students.

The ACLU lost the court battle when the 10th District Court of Appeals ruled that BYU's policy did not violate the Fair Housing Act. The U.S. Justice Department allowed BYU to segregate students based on gender through a 1978 agreement that said the private college could restrict housing for moral standards.

Carol Gnade, Utah's ACLU executive director, said her office has not received complaints about the BYU housing issue since the 1994 lawsuit. "We've not received any complaints, and we've been surprised," she said. "It's indicative that people don't believe their rights are being violated."