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Recession and Shifting Demographics to Swell the Ranks of Those Who Rent
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Recession and Shifting Demographics to Swell the Ranks of Those Who Rent
Industry News
ANSI Accreditation of CAMT Begins to Pay Off
U.S. Home Construction Declined by 5 Percent in June Due to Multifamily
Survey Shows Majority of Apartment Residents Living Without Renters Insurance
San Diego County's Apartment Rents Fell Slightly in Q2 2010
Reno Rents Continue to Zigzag Even as Residents Return to Apartments
Bedbug Numbers Swell Affecting Baltimore-Area Apartments
Georgia Apartment Community Invites Dogs and Their Owners to Monthly Yappy Hour
Phoenix Realty Group Acquires Three Inland Empire Communities
Four Letters Ease Housing Fears For Some: Rent
Colonial Properties Trust Reports Results for Q2 2010
Portland Apartments and Condos to Possibly Lead a Property Sector Rebound
Pittsburgh's Commercial Market Falls in Moody's Rankings With Apartments a Factor
Legislative/Legal News
Free Help to Deter Crime in Charlotte-Area Apartment Communities
Pa. Town to Revise Trash Fee for Big Apartment Communities
Senators Reintroduce Identity Theft Measure
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Recession and Shifting Demographics to Swell the Ranks of Those Who Rent
Digested From "Renter Nation"
Barron's (07/24/10) by Gene Epstein
Recession and shifting demographics are expected to swell the number of people who rent housing rather than own over the next five years. That is good news for anyone renting out a house, apartment, or condominium or any REIT specializing in apartment communities. In fact, some analysts expect the share of ownership will be pushed back to where it was in the early 1990s. Already, in the wake of the housing boom going bust, the share of U.S. households owning houses has steadily decreased from 69% at its 2004 peak to 67.2 percent in the first three months of this year. Some forecast the rate will fall to its 1993-94 level of 64 percent by 2015. The flip side of this trend is a rising rental rate, which is on pace to hit 36 percent by 2015 compared to 32.8 percent in '04. It should be noted that every percentage-point increase represents nearly 1.3 million households. With the average household containing more than two people, approximately 10 million extra people could be moving into rental housing over the next five years.
Industry News
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ANSI Accreditation of CAMT Begins to Pay Off
Digested From "ANSI Accreditation of CAMT Begins to Pay Off"
UNITS (07/10)
The National Apartment Association Education Institute's (NAAEI's )recent accreditation of its Certificate of Apartment Maintenance Technician (CAMT) program by the American National Standards Institute (ANSI) may help to change the current property maintenance requirements of Jacksonville's Construction Trades Qualifying Board (CTQB). Currently, in order for apartment maintenance technicians in the Florida city to hold a Property Maintenance Craftsman License, one must sit for an exam that was developed using electrical, plumbing, and HVAC textbooks. The information covered in the exam is extremely technical and above the level of knowledge that an apartment maintenance technician needs to know to perform his/her job well. As a result, only 50 percent of those who take the licensing exam pass it.
U.S. Home Construction Declined by 5 Percent in June Due to Multifamily
Digested From "U.S. Home Construction Declined by 5 Percent in June"
New York Times (07/21/10) P. B12; by Christine Hauser
The Commerce Department reports that U.S. housing starts fell 5 percent in June to their lowest level since October 2009. Researchers say the drop was mainly the result of a 20 percent decrease for apartments and condominiums. Building permits for last month, meanwhile, inched up 2 percent to 586,000 from May; while those for single-family homes dipped 3 percent to 421,000.
Survey Shows Majority of Apartment Residents Living Without Renters Insurance
Digested From "Apartments.com National Survey Reveals the Majority of Apartment Dwellers Are Living Without Renters Insurance"
StreetInsider.com (07/26/10)
The Bureau of Justice Statistics reports that residents are 50 percent more likely to experience theft than those who own homes. Despite these risks, a recent Apartments.com survey shows that most apartment dwellers continue to live without renters insurance. The poll queried nearly 1,400 apartment hunters nationwide. Of those, 67 percent said they do not currently have renters insurance. The top reason respondents gave for not being covered is that they cannot afford it. Others claimed they did not know such coverage existed, while still others said they do not need renters insurance because their possessions are not valuable enough. Almost 25 percent of the apartment seekers polled are under the assumption that renters insurance is too expensive. The National Association of Insurance Commissioners, though, notes that the average premium is less than $200 a year.
San Diego County's Apartment Rents Fell Slightly in Q2 2010
Digested From "County's Apartment Rents Fell Slightly in 2nd Quarter"
San Diego Union-Tribune (07/23/10) by Mike Freeman
Apartment rents in San Diego fell in the April-through-June period compared to the second quarter a year ago, reports RealFacts, with average rents dropping from $1,378 a month in Q2 2009 to $1,376 this year. Vacancy rates improved to 5.9 percent versus 6.5 percent a year ago. According to Alan Pentico, spokesman for the San Diego County Apartment Association, a 5 percent vacancy rate is considered equilibrium in the market. Apartment managers are struggling with their inability to raise rents, especially in light of rising prices for services. According to RealFacts' research, San Diego County ranked sixth among California's 26 metropolitan areas in terms of highest rental rates. Robert Pinnegar, executive director of the apartment association, concludes, "Now the rental market, like the economy, seems to have bottomed out and we are waiting for the recovery to start."
Reno Rents Continue to Zigzag Even as Residents Return to Apartments
Digested From "Renters Return to Apartments, but Rates Continue to Zigzag"
Reno Gazette-Journal (07/24/10) by Jason Hidalgo
Following a tough year marked by average vacancies of nearly 11 percent in mid-2009, the latest report from Johnson-Perkins & Associates shows that Reno's apartment sector reported its fourth consecutive quarter of falling vacancy rates as residents continued to return. The average vacancy rate for this year's April-through-June period was 7.79 percent, a slight drop from 7.87 percent in the first three months of the year. Researchers note that the decline coincided with a decrease in average monthly rent to $837, the lowest since January 2006. Greg Ruzzine, associate appraiser for Johnson-Perkins, comments, "It seems like apartment managers and owners are getting the hint that they actually need to start dropping rents. Rather than just giving discounts on deposits or waiving a background check, they've cut back on rents big time." Although vacancy rates have steadily declined since their second-quarter 2009 peak of 10.93 percent, average rent continued "its schizophrenic pace." Len Ramos, first vice president of CB Richard Ellis, notes that the pace exemplifies a market searching for bottom. He adds, "We're seeing vacancies more or less stabilize, and the way [apartments] are doing that is through concessions. That includes rent discounts, which is why you're seeing average rent going up and down."
Bedbug Numbers Swell Affecting Baltimore-Area Apartments
Digested From "Bedbug Numbers Swell"
Baltimore Sun (07/26/10) by Julie Scharper
Bedbugs are affecting numerous apartment communities in the Baltimore metro area. Chris Merriam, a mayoral fellow who has been assigned to research the vermin for the city's Health Department, remarks, "The problem is not just the bugs themselves but the reaction people have to them. The things you have do to get rid of bedbugs are so intrusive. You can't even come home and relax at night." Nearly eradicated in the United States after World War II, bedbugs have taken advantage of bans on effective pesticides to mount a major comeback in the past decade. Their numbers are continuing to swell, having settled into apartment communities, college dorms, and mansions throughout northern Baltimore County in particular.
Georgia Apartment Community Invites Dogs and Their Owners to Monthly Yappy Hour
Digested From "Glen Lake Apartments Invites Dogs and Their Owners to Monthly Yappy Hour"
dBusinessNews (07/25/10)
To better reach out to its residents who own dogs, the Glen Lake Apartments in Sandy Springs, Ga., is now offering monthly "Yappy Hours" in the community’s dog park. The next such event is scheduled for Wednesday evening, Aug. 4. Considered one of the most pet-friendly apartment communities in the area, Glen Lake provide treats for the dogs and plenty of water, sodas, and beer for the people who bring them. Yappy Hours, which always take place from 5:30 p.m. to 7 p.m., offer residents an opportunity to get to know their neighbors better while their four-legged friends play leash-free in the community's large, fenced dog park. Glen Lake also welcomes friends of residents and people who are interested in moving to come to Yappy Hour. Glen Lake is one of a few apartment communities to welcome dogs of up to 80 pounds. Even larger canines are permitted with the apartment manager’s approval. In addition to the dog park and the monthly Yappy Hours, the apartment community often secures special discounts at nearby pet-focused businesses for its residents. In addition, each month, Glen Lake selects one "Pet of the Month" to feature online and in the community newsletter.
Phoenix Realty Group Acquires Three Inland Empire Communities
Digested From "Phoenix Realty Group Sees Renewed Opportunity in California's Inland Empire – Makes $31.5 Million Purchase of Three Apartment Properties"
BusinessWire (07/22/10)
Phoenix Realty Group (PRG) has announced its purchase of 424 apartment units in Fontana and Riverside, Calif. "Urban housing is a lynchpin for real estate’s recovery and the hard-hit rental markets surrounding Los Angeles have started to stabilize as job losses bottom out," said Edward J. Ratinoff, PRG’s managing director, national acquisitions. "Rents appear to be at the low point in the cycle, and we see this as an opportune time to leverage our available capital and agency financing experience to acquire assets with inherent potential." The company purchased 120 garden-style apartments in one six-building community in Fontana for $11.7 million. The two Riverside apartment communities, meanwhile, contain 304 units in 24 buildings. They were acquired for $19.8 million. Alex Saunders, PRG senior vice president, said the company sees demand for rentals resurfacing in the area as unemployment levels off. Additionally, the tightening mortgage market is fueling a stronger demand for more apartments. PRG is currently pursuing other apartment acquisitions in Southern California, New York, New Jersey, and Connecticut.
Four Letters Ease Housing Fears For Some: Rent
Digested From "Four Letters Ease Housing Fears For Some: Rent"
NPR Online (07/23/10) by Joshua Brockman
Though many people may be considering renting, government data shows that they have yet to commit. The vacancy rate for rental housing is currently near an all-time high of 10.6 percent, reports the U.S. Census Bureau. Although home sales decreased 5.1 percent last month, according to the National Association of Realtors, the shift to rentals has not materialized. Changing attitudes are what is needed to boost the rental market going forward. Nicolas Retsinas, the director of Harvard's Joint Center for Housing Studies, observes, "In the past, you rented if you didn't make enough money. You rented if you weren't ambitious. You rented if you weren't sort of smart enough. But as it turns out, as we look in recent years, renting turned out to be a pretty smart thing to do." Indeed, it was a smart move because apartment residents were not saddled with mortgages worth more than their residences. Another distinct advantage to renting in this economy includes having the flexibility to move in order to pursue employment opportunities elsewhere. Even though people who rent do not get the same kind of tax breaks as homeowners, renting may feel more secure in this fragile economy.
Colonial Properties Trust Reports Results for Q2 2010
Digested From "Colonial Properties Trust Reports Results for Second Quarter 2010"
MarketWatch (07/22/10)
Colonial Properties Trust reported a net loss available to common shareholders of $11.8 million for this year's second quarter versus a net loss of $1.9 million for the same period a year earlier. For the six months ended June 30, the Alabama-based apartment REIT posted a net loss available to common shareholders of $24.2 million compared with net income of $12 million from January through June in 2009. Chairman and CEO Thomas H. Lowder remarks, "Our multifamily fundamentals improved during the quarter, resulting in quarterly sequential growth in revenues and net operating income and an upward revision to our 2010 guidance. The un-bundling of households and lower homeownership, coupled with limited multifamily supply in our markets has led to fundamentals improving earlier than initially expected." Colonial Properties Trust continued its efforts to simplify operations by exiting two joint ventures during the second quarter. It also extended its debt maturities by executing new 10-year secured financings at attractive rates. As of June 30, the REIT owned or managed 34,138 apartment units.
Portland Apartments and Condos to Possibly Lead a Property Sector Rebound
Digested From "Ore. Condos, Apartments May Be First Market Uptick "
KOMO 4 News (07/21/10) by Nick Bjork
Statistics in Portland, Ore., seem to suggest that the city's apartment and condominium market may be the first sector in the metro area to turn around. The multifamily vacancy rate in the second quarter was 4.1 percent, down almost one percentage point from the first three months of the year. Rental rates, meanwhile, rose for the first time in two years. Local brokers do concede, however, that more job growth and some new projects in the pipeline are needed. Robert Black, associate vice president of NAI Norris, Beggs & Simpson, said the statistics were great indicators that things are moving in the right direction but that more jobs are needed in order for residents to continue renting. Existing inventory can attract investors, but long-term improvement will be dependent on new communities being added to the local stock.
Pittsburgh's Commercial Market Falls in Moody's Rankings With Apartments a Factor
Digested From "Commercial Market Falls to 10th"
Pittsburgh Tribune-Review (PA) (07/20/10) by Sam Spatter
Moody's Investors Service confirms that Pittsburgh improved its score on the ratings agency's latest ranking of commercial real estate markets in 60 metropolitan areas during the second quarter. However, the region fell from fifth place to 10th in the rankings as other markets showed greater improvement. The survey gauged Pittsburgh on occupancy rates for apartment communities, office buildings, and hotels. The city's overall score was 53 in the first three months of this year and 56 in the second quarter, which tied it with Long Island, N.Y., and Orange County, Calif. Keith Banhazl, a vice president with Moody's, states that the region "still is a good market. It's just that other metro areas improved their markets greater than Pittsburgh." Honolulu topped the latest list, followed by New York, Los Angeles, Boston, San Francisco, Fort Lauderdale, Albuquerque, Salt Lake City and San Jose. Pittsburgh scored highest in downtown office occupancy, with a score of 73. Apartment occupancy, meanwhile, was a 70.
Legislative/Legal News
Free Help to Deter Crime in Charlotte-Area Apartment Communities
Digested From "Free Help to Deter Crime in Rentals"
Charlotte Observer (NC) (07/26/10) by April Bethea
In North Carolina, the Charlotte police department is hosting a free workshop on July 27 to educate people about the city's nearly two-month-old rental property ordinance. In addition to including a session on the ordinance that went into effect June 1, the event will feature presentations on such topics as conducting solid background checks on would-be residents, structuring lease agreements, and improving exterior lighting on community grounds. Last month, the Greater Charlotte Apartment Association held a workshop on crime deterrence in which the ordinance was also discussed. Ken Szymanski, the association's executive director, noted that many apartment owners are open to new ways to help keep their communities safe. In particular, many have expressed an interest in working more closely with law enforcement. He concluded that some apartments may wind up on Charlotte's new registry because the owners may lack the money and/or other resources needed to help improve their communities.
Pa. Town to Revise Trash Fee for Big Apartment Communities
Digested From "Council to Revise Trash Fee"
Intelligencer (Penn.) (07/21/10) by Theresa Hegel
The Philadelphia suburb of Perkasie is set to ease up on a $35 annual trash fee, at least for people who live in large apartment communities. Council members discovered earlier in July that they had been unfairly targeting residents who were not able to use the borough's trash system, instead relying on whatever service their apartment owner had contracted. Councilman Chris Nicolosi remarks, "To be frank, we made a mistake. We didn't foresee that these complexes have their own trash pickup service. It was our error." For the past 20 or so years, Perkasie has had a "pay as you throw" system, charging residents for each bag of trash they leave on the curb, but picking up recycling and some other materials for free. However, the increased cost of recycling and the substantial number of people who were using free borough trash services without paying for bags eventually took its toll on the system. The $35 fee was implemented to close that gap. However, a number of apartment and condominium communities in Perkasie already charge their residents for contracted trash services. Perkasie's plans moving forward will be to waive the $35 fee for residents of multifamily housing communities with 10 or more units, reports borough manager Dan Olpere.
Senators Reintroduce Identity Theft Measure
Digested From "Senators Reintroduce Identity Theft Measure"
NextGov.com (07/14/10) by Jill R. Aitoro
U.S. Sens. Tom Carper (D-Del.) and Bob Bennett (R-Utah) have reintroduced legislation that would override state regulations that seek to shield consumers from identity theft by setting up a national statute requiring public and private institutions to protect sensitive data and notify people whose personal information might have been exposed. The 2010 Data Security Act would be applicable to any outfit that maintains individuals' personal data. The bill requests federal agencies to set up "appropriate standards relating to administrative, technical, and physical safeguards" to guarantee the security and confidentiality of sensitive account information and sensitive personal data that is maintained or communicated by or on behalf of that agency.
Abstract News © Copyright 2010 INFORMATION, INC.
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