The town found zoning violations in all four properties and occupancy violations in three. Similar violations were found in other properties on North Columbia Street and Longview Street.
Last spring, Kairys Properties approached several students who were looking for housing, offering them homes on North Columbia Street. The company said the properties could house five people, even though it was technically illegal.
“It was an option when we first signed the lease to have a five-person house or a four-person house, so naturally we picked five so our rent would be less,” Adkins said.
Kairys Properties’ floor plan for the house listed three bedrooms, with a fifth and fourth room labelled as ‘Media Room’ and ‘Library.’
Because the media room and library were illegally being used as bedrooms, the walls have to be knocked down.
Kairys Properties did not return multiple calls for comment.
In May, Kairys Properties was dissolved by the N.C. Secretary of State’s office for failing to file its annual reports. The company was reinstated in July after it filed its annual report.
The town’s occupancy rule was created to protect long-time residents in Chapel Hill, said Hudson Vaughan, deputy director of The Jackson Center, which works to preserve the diverse community in historic Northside.
“The more people you have in a house, the more parties you have, the bigger things grow,” he said.
In January 2012, the Chapel Hill Town Council adopted the Northside Community Plan.
The plan outlines education and outreach efforts, zoning regulations, parking and code enforcement in Northside, said Megan Wooley, the town’s housing and neighborhood services planner.
“Residents felt that the neighborhoods were being affected by the externalities of students — not that neighbors mind that students are living there, but that there were issues like parking, trash, partying,” Wooley said. “Over occupancy ramps that up because there are just more people.”
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Vaughan said the town’s regulations were never about residents being in opposition to the students.
“We welcome students who care about the fabric of the community,” he said.
Todd Neal, a realtor in Chapel Hill, said the number of landlords and property managers not following the rules had to be a significant percentage and that real estate companies that are dishonest with students are a problem in Chapel Hill.
“I am for compliance, just not for all the restrictions,” Neal said.
“They really want families to move back into Northside. The city is attempting to tinker with supply and demand for the romantic notion of saving something that doesn’t need to be saved.”
Neal said noncompliant landlords typically break the occupancy rule for the extra income they can make.
Recently, Mill House Properties took over the North Columbia Street properties previously owned by Kairys as property managers for the homes.
After the town inspected the North Columbia Street homes, Mill House petitioned the town to allow the students in violation to stay the full semester so new living arrangements could be made.
But next year, most of the students currently living in those properties probably won’t be able to afford the houses when Mill House Properties raises the rent.
Another group of students living on North Columbia Street are also facing consequences from the town.
While the group of four is adhering to the town’s occupancy rule, the home they rented was originally slated to be three bedrooms.
Since the group is using an additional room as a bedroom, two of their walls must be knocked down.
Steph Henrich and her three roommates were skeptical when representatives from Kairys Properties suggested they live with five people, so they went to Student Legal Services to look over the lease.
Henrich said everything seemed fine as long as they only had four living in the home.
“We knew we could only have four people,” Henrich said. “We knew that was the town’s rule.”
Abby Lantz, one of Henrich’s roommates, said the group’s rent will rise next year because Mill House Properties will want to recover more money on its investment in the North Columbia Street properties.
“We’re totally screwed, because we can’t move anywhere else, so we’re basically stuck here for next year,” Lantz said.
“I’ve been looking for weeks and there’s nothing left. All the houses are gone, it’s nothing in our price range.”
Amanda Truesdell, another roommate, said the most frustrating part of their experience was that there was no warning about what would happen to their house.
“We wouldn’t have done this if we had known this. Absolutely not.”