A Large Company Purchased a Historic East Lansing Rental Community. Longtime Residents Were Quickly Priced Out.

During her nearly 10-year stay in a Hillcrest Village apartment, Esperanza Rubio Torres said she enjoyed a sense of togetherness that is rare in rental communities. 

“I loved hearing [my neighbor] play her fiddle on Saturday mornings when I didn’t get up and go to work,” Rubio Torres said. “I love it because I know that there is someone there who is living a life, who is enjoying art, who is creating art. That community that we love to live in is because we know that there are people living wonderful lives.”

Hillcrest Village is made up of two main complexes. Hillcrest I was built in 1936 and was East Lansing’s first apartment community. Hillcrest II was built in 1986 and includes more amenities. Rubio Torres lived in Hillcrest I and her old building had some quirks – the walls were thin, bugs would get inside and units were hardly climate controlled. But she loved living near many longtime renters who looked out for each other. 

Rubio Torres remembers outdoor gatherings with her neighbors getting her through the COVID-19 pandemic. She enjoyed walking around the community at night and seeing cats perched in the windows. As a single woman, she appreciated that someone would notice if she was not home for several days. 

Rubio Torres’ Hillcrest apartment was also affordable. She said in 2023 she paid $740 monthly for her one-bedroom unit. 

But in late 2023, she was informed that Hillcrest Village was being sold to Peak Management, a large company based out of Ferndale. Within months, Rubio Torres was told that her rent was increasing and a new utility fee would be added. The total cost of her apartment jumped by $135 monthly, an 18% increase. 

Rubio Torres assumed this would just be the first major rent increase and decided to leave Hillcrest. She moved into a condo in Meridian Township. The monthly cost is about $400 more, but she owns her unit. The new space also comes with another bedroom, a pool, dishwasher and other amenities that were not available at her Hillcrest apartment. 

Rubio Torres’ experience is not unique. ELi spoke with three other residents who said they will likely leave Hillcrest in the coming year due to rent increases. They said they have seen an exodus of their long-time neighbors priced out of their homes since Peak Management purchased the apartment complex.

Josh Hewitt, a Hillcrest resident of 12 years who volunteers on East Lansing’s Human Rights Commission, said his monthly apartment costs jumped from $890 to $1,195 when Peak took over. He recalled four separate conversations he had with neighbors who moved out. Each told him they were leaving because of the rent increases. 

“You used to actually see more families with kids and stuff around that went to some of the elementary schools close by,” Hewitt said. “You see almost none of them left.”

Hewitt said the previous property manager prioritized keeping tenants for years. Rent would increase under the previous manager, but at a much lower rate. He explained that previously tenants who renewed their leases early were offered discounts on the first rent payment of the year, making the increases negligible. 

The strategy of retaining tenants appears to have shifted and seemingly more units are vacant as a result, Hewitt said. 

Earlier this year, Hillcrest Village was promoting nine and 10-month lease plans. In a Facebook post promoting the lease plans, Hillcrest offered one month of free rent to tenants who signed on to a shorter lease plan. 

Hewitt said he thinks the goal is to attract Michigan State University students who will move out after MSU’s school year is over. It’s easier to raise the price of rent between tenants, Hewitt said. 

Since Peak took over, residents who spoke with ELi said the only improvements they’ve seen are the parking lot was repaved and new carpet was put in the common area of buildings. They don’t think they got much back from the rent increases. 

“It almost seemed as if you were getting good value [before], even if there wasn’t a lot,” Hewitt said. “I think now that balance between value and what you’re getting, I think it’s completely skewed… You’re just not getting what you’re paying for.”

Worse yet, residents said Peak has been slow to respond to maintenance requests, even if there are urgent needs. 

Hillcrest resident Beth Enright, who said her rent and utilities went from about $800 monthly to $995 under Peak, told ELi she noticed the smell of sewage in her building in early October last year. The issue took months to address.

In an email chain Enright shared with ELi, a property manager told Enright that Peak is aware of the “damp smell” and assured her that no sewage was found in the basement. The manager added that they had contacted experts to remedy the situation. 

“To reiterate, it is not the smell of damp and the problem is not new,” Enright wrote in a Nov. 13 email. “Personally, I first noticed the smell of rotten feces while doing laundry the week of October 9.”

When Enright continued to press the property manager, they said multiple vendors found no signs of sewage or feces during inspections. Enright then filed a complaint with the city. 

Inspection records obtained by ELi through a Freedom of Information Act request show that on Nov. 22, 2024 the city notified Peak it was in violation of the city code. 

“FIND AND ABATE SEWER SMELL IN BASEMENT OF 540. APPEARS TO BE COMING FROM CRAWL SPACE AREA. REPAIR AS NEEDED,” the city inspector notes in the report.

Peak was ordered to address multiple issues and was told the city would reinspect the site to ensure the property is up to code. However, follow up inspections on Dec. 16 and Jan. 2 contained the same note. 

Planning, Building and Development Director Annette Irwin clarified that the note was included in the Dec. 16 report because there was “no change.” The inspector was not given access to the site Jan. 2. 

From reports, Irwin said it’s unclear when exactly the smell was addressed, but that a report from March 20 showed management had addressed the code violations raised in the Nov. 22 inspection. 

City leaders have few tools to control rent increases. 

Just months after Peak took over Hillcrest Village, resident Sarah Abend said during public comment of the March 19, 2024 City Council meeting that her rent had increased 17%, from $860 to $1,005 per month. She said she may have to move out of East Lansing to find housing that is affordable. 

“I’d love to stay in East Lansing, for the time being,” Abend said at the meeting. “I want to live in a community where I feel like my local government is here to protect all residents. Not just those who fall under certain incomes.”

Abend asked City Council members to advocate in support of a state bill that would allow local governments to enact rent control policies. In the 18 months since the meeting, the bill hasn’t moved. 

Erika Rosebrook, director of the Michigan State University Extension Center for Local Government Finance and Policy, said there are only a handful of states that allow cities to implement rent control and Michigan is not one of them. 

“As far as rent prices directly, the city has really limited tools,” Rosebrook said. 

Rosebrook said cities can incentivize new developments to include affordable units, and adding more rental housing in general may drive the prices down by lowering the demand. But as far as direct control over existing buildings, there’s little the city can do to control prices. 

“Prospectively new developments, yeah, there’s some things the city can do,” Rosebrook said. “But that’s before they’re constructed… that doesn’t do a lot for people in existing properties.” 

Councilmember Dana Watson acknowledged there is not much the city can do to keep rent prices in check. She hopes the state legislature changes laws that prevent local governments from acting.

Watson said that along with rent control powers, the state should consider allowing local governments to put an additional tax on vacant apartment units–which would push property managers to keep buildings full. 

She said when landlords suddenly increase rent prices, it’s done without consideration for tenants who don’t have new income to pay the difference.

“It’s that sad profits over people mindset,” Watson said.

Peak Management did not respond to a request for comment left in the Hillcrest Village contact portal.