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Trammell Crow and ERC Announce Accessibility Settlement
Industry News
Houston Apartment Rents on the Rise
Apartment Residents Can Also Go Earth-Friendly
Nashville Apartment Owners Use Incentives to Lure Fleeing Residents
Plots & Ploys: Guardian Branches Out
Calif. Apartment Survey Finds Increase in Applicants From Foreclosures
Homeowners and Some Apartments Look to Cash in With Inauguration
Survey Shows Average Rent Rose for Virginia City Apartments
Legislative/Legal News
D.C.-Area Apartment Owners Watch Out for Bed Bugs
Wisconsin Fund to Preserve Rural Apartment Communities
Utah Town Considering Apartment Owner Program
Dallas City Council to Give 'Gold Stars' for Apartment Anticrime Efforts
Apartment Assessments Put to the Test in Wisconsin Town
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Trammell Crow and ERC Announce Accessibility Settlement
Digested From "Equal Rights Center, Trammell Crow Settle Accessibility Lawsuit"
National Multi Housing Council (11/07/08)
Earlier in November, a four-year consent decree jointly filed in federal court by Trammell Crow Residential (TCR) and the Equal Rights Center (ERC) effectively ended litigation initiated by the advocacy group against TCR. ERC filed the lawsuit in the summer of 2007, alleging that 284 of TCR's apartment communities failed to comply with the Fair Housing Act and the Americans with Disabilities Act (ADA). ERC claimed it had tested about 40 of those communities listed in the complaint, finding at least one specific violation at each. The agreement requires TCR to fund a new program that will provide such resources as education and training to program participants, promoting compliance with the ADA and the FHA's design and construction requirements. The program will be overseen by a five-member panel, consisting of three ERC officials and two apartment industry representatives. TCR has agreed to contribute $150,000 annually to the program over the next decade--an amount that may be reduced if more apartment owners join the program. For those firms that do join the new program, ERC has agreed that it will not file legal or administrative action against program members for any alleged violations covering communities that are included in a settlement or which were being built during a company's program membership. Finally, if a program member is sued by a third party, ERC will provide testimony regarding the company's efforts at compliance via participation in the program.
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Houston Apartment Rents on the Rise
Digested From "Rents on the Rise in Parts of Houston"
KHOU.com--11 News (Texas) (11/21/08) by Kevin Peters
With economic conditions worsening, more and more Houston residents are opting to live in apartments. Monthly rents are on the rise, though, due to a variety of reasons. Chiefly, mortgage lenders are turning down more people without stellar credit ratings and requiring bigger down payments. With homeownership so unattainable, many people have no choice but to rent apartments. One unnamed Houston-based apartment locator said his work has spiked between 150 percent and 200 percent from November 2007. Citywide, apartment occupancy rates have stayed fairly stable in the 86 percent to 87 percent range. Constantine Platis of Apartmentgurus.com comments, "I'm seeing a little bit of increase because of demand. People are going to be moving inside the loop, and [apartment communities] are taking advantage of that."
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Apartment Residents Can Also Go Earth-Friendly
Digested From "Renters, Condo Owners Can Take Advantage of Many Earth-Friendly Ideas"
Detroit Free Press (MI) (11/23/08) by Alex Veiga
Environmentally conscious apartment residents can take advantage of a number of products now on the market to minimize their carbon footprint, eradicate airborne toxins and increase the use of recyclables. Russell Albanese, president of the Albanese Organization, notes that among the first things apartment residents can do to slash their energy costs is to discard their incandescent light bulbs and replace them with compact fluorescent bulbs or LEDs, light-emitting diodes. Albanese's company has developed several green residential high-rises throughout New York City. Indoor air quality can be a big problem in apartment communities, especially for residents whose apartments have carpeting. Leadership in Energy and Environmental Design (LEED)-certified filters for air conditioners can help trap small particles of dust and other allergens not caught by conventional filters. Also effective is a medical-grade Hepa air-filtration unit, which can absorb chemicals and odors and wipe out nearly all airborne particles. Another way to make the air inside an apartment cleaner is to request that the walls be repainted with low volatile organic compounds paints. Finally, to help save water, apartment owners can install dual-flush toilets that give users a couple of options on how much water to use per flush.
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Nashville Apartment Owners Use Incentives to Lure Fleeing Residents
Digested From "Apartment Complexes Bring Back Incentives to Lure Fleeing Renters"
Nashville Business Journal (11/21/08) by Jenny Burns
With the harsh economy forcing more potential and existing apartment residents to move back in with their parents, apartment occupancy in Nashville has dropped to its lowest level in nearly five years. Occupancy for the third quarter is at 92 percent, a 3 percent decrease from the same period a year earlier and the lowest since the first quarter of 2004. According to the Greater Nashville Apartment Association, monthly rents also dipped to $750 in the July-through-September period--a $5 drop from the second quarter, but up from $741 in the third quarter of 2007. Nashville-area apartment owners say they are uncertain if the third quarter decline is simply a blip or the beginning of a decline in demand. Brad Cather, president of the apartment association and CEO of Lighthouse Residential Group, states, "It's going to be interesting to see how we shake out this [fourth] quarter. We're coming into our slowest leasing time, and we lost more people at the beginning of October than we normally lose. We don't have the traffic to pick all that back up."
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Plots & Ploys: Guardian Branches Out
Digested From "Plots & Ploys: Guardian Branches Out"
Wall Street Journal (11/19/08) by Kris Hudson; Jonathan Karp; James Hagerty
In a deal that could bail out a number of pro athletes and celebrities who were lured into property investment during the real-estate boom, Guardian Management LLC has signed a letter of intent to purchase Atherton-Newport Investments LLC, which filed for bankruptcy earlier in 2008. Under the deal, Guardian would acquire more than 4,000 apartments for an as yet undisclosed amount, though it will assume nearly $300 million in debt on the various communities. The deal would add assets in Las Vegas, Miami, Phoenix and Seattle, as Guardian--which has a portfolio of 12,000 apartments--expands beyond its Pacific Northwest base. Guardian President Thomas Brenneke said the company will invest in the Class B apartment communities and hold them until market values improve. Creditor committee attorney Robert Opera points out that the deal offers hope to the famous names who invested in Atherton-Newport via MTX Wealth Management LLC. However, it could take as long as 10 years to see a decent return.
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Calif. Apartment Survey Finds Increase in Applicants From Foreclosures
Digested From "Rental Survey Finds Increase in Applicants From Foreclosures"
Vacaville Reporter (11/19/08)
According to the annual Apartment Rent Survey conducted by the city of Fairfield, Calif., the number of rental applicants coming from foreclosed homes has increased locally in the last year. The survey queried apartment managers in such markets as Fairfield, Suisun and Vacaville to determine median rents for studio, one-, two- and three-bedroom units, along with the area vacancy rate. Median rents decreased slightly between November 2007 and November 2008 for studios and three-bedroom apartments. However, rents for one- and two-bedroom units rose. As of this November, median monthly rents in the Fairfield area are $698 for studios, $880 for one-bedroom units, $985 for two-bedrooms and $1,348 for three-bedrooms. The overall vacancy rate, meanwhile, has increased from 4.73 percent in 2007 to 6.39 currently. In order to entice potential residents to move into vacant apartments, such incentives as discounted first month's rent and free credit checks are being offered. Besides families of foreclosed homes moving into apartments, owners and managers have said that the increased number of vacancies recently can also be attributed to residents moving from apartments to single-family homes for rent.
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Homeowners and Some Apartments Look to Cash in With Inauguration
Digested From "Jan. 20 Housing Is Risky Business"
Washington Post (11/20/08) P. A1; by David Nakamura
In the Washington, D.C., metropolitan area, an inauguration-driven property frenzy is developing in which thousands of people are looking to make a quick buck by offering their homes for rent in January to out-of-towners looking to attend President-elect Barack Obama's historic inauguration. However, the deals--many of which are being brokered largely between amateurs, often via the Internet and with little personal contact--are fraught with risk on both sides, including fights over money and property damage in addition to issues ranging from liability to fraud. Kevin McParland, an attorney who practices landlord-tenant law locally, states, "There's potentially all kinds of problems here. The owner could have problems with people trashing the place. The renter could have problems if they come and the place is not available when they get here." Similar markets have developed in other places that have been home to major events, notably Park City, Utah, which hosted events during the 2002 Winter Olympics. In response to such concerns, the D.C. Chamber of Commerce is developing housing advice that will be posted on its Web site. Deposits are recommended, as is a review of what is covered by insurance. The District and its suburban jurisdictions have regulations that govern property rentals, including licensing, certification of occupancy and inspections. But the laws are difficult to broadly enforce for an event such as the Jan. 20 inauguration. Consequently, D.C. officials are considering relaxing the restrictions on a one-time basis. Specifically, city government has declared that property owners will not be taxed on their earnings for that week. Demand is so great for housing that several for-profit Web sites have been launched to serve as brokers. Deana Bass, a Northern Virginia public affairs consultant who started such a site, notes that some property owners have offered to cook occupants breakfast and drive them to the Metro on Jan. 20.
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Survey Shows Average Rent Rose for Virginia City Apartments
Digested From "Average Rent for NN Apartments Increased, According to Survey"
Newport Daily News (11/20/08) by Sabine Hirschauer
According to a 2008 apartment survey recently released by the Newport News (Va.) Planning Department, the average rent for apartments in the city has risen as has the number of available rental units. Indeed, the number of available apartments overall has increased from 2007's vacancy rate of 2.8 percent to 4.79 percent in 2008. Meanwhile, the market for income-based apartments such as Section 8 housing tightened even more, from a vacancy rate of 2.1 percent a year ago to 1.57 percent. This has been a trend in recent years, reports Karen Wilds, executive director of Newport News' Redevelopment and Housing Authority. As far as how much people are paying, average apartment rents in Newport News for one-bedroom apartments rose by $47.36, from $664.93 to $712.29 in 2008; for two-bedroom units by $61.41, from 754.89 to $816.30; and for three-bedroom apartments by $100.40, from 886.87 to $987.27. Citywide, rents increased for all types of apartments by an average of 7.67 percent, significantly higher than the average 2007 inflation rate of 2.85 percent. The survey was conducted July 1 through July 14 and covered just over 200 apartment communities citywide, containing 26,743 units.
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Legislative/Legal News
D.C.-Area Apartment Owners Watch Out for Bed Bugs
Digested From "Biting Bed Bugs Run Rampant in D.C. Area"
NewsChannel 8 (Washington, D.C.) (11/20/08)
In the Washington, D.C., metro area, apartment owners are dealing with a rise in the number of cases of bed bugs. In response, the city of Alexandria, Va., recently provided helpful information for those owners who are dealing with increased sightings of the crawling critters. Since the first of 2008, the Alexandria Health Department has received 57 such complaints. In all of 2005, the agency only had a dozen reports. Local apartment manager Amy Groff states, "It's definitely something that I've seen grown." Besides beds, bed bugs can be found in the walls, in laundry rooms and elsewhere. Apartment owners and managers are discovering that the increase in bugs is expensive. Groff reports that it costs between $300 and $600 to treat an apartment. She states, "If a resident doesn't prepare properly or an apartment goes untreated for whatever reason, we have to have the person move out because they're not complying with what we asked them to do. We would have a vacant apartment and those vacancy dollars are a huge loss to a management company and a landlord." If a resident sees bed bugs in their apartment, they should be encouraged to notify management as soon as possible. The local health department should then be contacted. Typically, the apartment owner will have an exterminator come, but not before the owner has moved everything away from the walls and cleaned all linens in temperatures above 130 degrees to kill the bugs and eggs. The exterminator should return for a follow-up two weeks later as it takes anywhere from a week to 20 days for all eggs to hatch.
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Wisconsin Fund to Preserve Rural Apartment Communities
Digested From "WHEDA Announces Rural Loan Fund"
Milwaukee Business Journal (WI) (11/17/08)
The Wisconsin Housing and Economic Development Authority (WHEDA) has established a $915,000 revolving loan fund for the preservation and revitalization of low-income, multifamily rental housing throughout the rural parts of the state. Provided by the U.S. Department of Agriculture (USDA), the new loan fund enables WHEDA to allocate loans to rural apartment communities that integrate low-income rental housing for families and individuals, including the elderly and persons with disabilities. WHEDA recently used the fund to close on its first deal, Palmyra Park Apartments, and expects two more to close by the end of December. The agency anticipates closing on an additional $2.1 million from the USDA the following month.
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Utah Town Considering Apartment Owner Program
Digested From "W. Jordan May Adopt Good Landlord Program "
Deseret Morning News (UT) (11/20/08)
In Utah, West Jordan's City Council is considering implementation of a "Good Landlord Program" similar to those in such nearby markets as Ogden, South Salt Lake and West Valley City. City officials have agreed to pay Wikstrom Economic & Planning Consultant Inc. $17,000 for a couple of initial studies about the program. The two studies will use dispatch and land records to determine whether apartment communities require more police and emergency services than single-family rentals. The studies are expected to be finished within about five months. However, implementation of results may have to wait on changes to state code that could be construed as banning disproportionate fees--changes that are likely in the 2009 session. West Jordan will then proceed with implementation of the landlord program. Elsewhere in the state, similar programs have reduced business license fees for apartment owners willing to take classes from the Utah Apartment Association. To continue receiving the discount, the owners must then screen residents to help reduce police service calls to their communities.
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Dallas City Council to Give 'Gold Stars' for Apartment Anticrime Efforts
Digested From "Dallas City Council to Give 'Gold Stars' for Apartment Anticrime Efforts"
Dallas Morning News (11/18/08) by Tanya Eiserer
The Dallas City Council's public safety committee recently endorsed a voluntary program in which apartment communities can earn a "gold star" certification for their crime prevention efforts. In addition, the panel approved a draft plan to estimate the number of adults at every apartment community so that local police can calculate an individual community's per capita crime rate and target those communities that need extra attention. This effort will document the addresses of every apartment in Dallas, a challenge considering there at least 3,200 apartment communities citywide. Police Chief David Kunkle remarks, "This will make it more objective." Police officials estimate that nearly one-third of Dallas' serious crimes occur within 100 feet of apartment communities--a definite concern as over 50 percent of the city's residents live in apartments. The department will use the new data to determine which apartment communities have a crime rate that is outside the statistical norm. The other part of the proposed ordinance is dubbed the "Dallas Gold Star Program." Modeled after efforts in such cities as Chicago and Houston, apartments that complete the new program's requirements, which include a security survey and workshops, would receive gold-star certification with special signs posted at those communities that earn the certification. Kathy Carlton of the Apartment Association of Greater Dallas notes her organization is a proponent of the program, but has additional questions before it can say whether it formally endorses the program.
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Apartment Assessments Put to the Test in Wisconsin Town
Digested From "Oshkosh Apartment Assessments Being Put to the Test"
Oshkosh Northwestern (11/17/08) by Amie Jo Schaenzer
The way Oshkosh, Wis., assesses apartment communities has come under fire. Earlier in November, Midwest Real Estate Development Co. won a big victory after the Oshkosh Common Council voted in favor of a settlement in which Midwest will be reimbursed $224,100 in property taxes for apartment communities it has long claimed were over-assessed by the city. The agreement claims the city over-assessed Midwest properties by nearly $3 million between 2005 and 2007. Meanwhile, Alexander & Bishop--an Oshkosh-based property firm and developer of several apartment communities locally--is currently working out a similar settlement with the city. Alexander & Bishop President Peter Jungbacker contends that some of his communities were assessed between $2 and $3 million over their fair market value. The problem with the higher assessed value, he claims, is that investors will not be as willing to pour money into his communities. Russell Reff, attorney for both Midwest and Jungbacker, adds that Oshkosh is likely the only city in the state that had a cap rate that went down. When the cap rate goes down, the value of communities automatically goes up. He concludes, "It puts us at a competitive disadvantage. Investors will look at that and say, 'I can invest in Appleton or Fond du Lac.'"
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