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Safety Remains a Top Issue in Apartments
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Safety Remains a Top Issue in Apartments
Industry News
Renting a Home a Better Deal Than Buying in Much of U.S.
S.C. Apartment Managers Sweeten Deal to Move In 
5 Myths About Home Sweet Homeownership Debunked
Tribeca Cos. Snags San Francisco Apartments
Tulsa Apartments Empty as Unemployment Rises
Little Rock Apartments Feel Crunch as Home Sales Rise
Oklahoma Apartment Bargains Come as Fixer-Uppers
Legislative/Legal News
Green Grants Promote Energy Savings in Washington State Apartments
Bedbugs, Water Conservation Still on Apartments' Agenda for 2010
Nebraska Police Program Helps Apartments Fight Crime
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Safety Remains a Top Issue in Apartments
Digested From "How to Feel Safe in Your Apartment"
New York Times (12/24/09)
Safety remains a top concern for apartment residents nationwide, and many are willing to pay more for security even in these challenging economic times. Dave Rowe, executive director of the International Crime Free Association, states that apartment owners who make security a high priority can keep tenants longer, protect property values and reduce maintenance and repair costs. Rowe and his group regularly conduct safety seminars for apartment owners. He notes that security is even more important now as vacant and foreclosed homes abound and more former homeowners turn to rental housing. Brent Sobol, owner of The TORO Properties whose portfolio includes about 1,300 Atlanta apartments, states, "Crime is our No. 1 business issue. I'm in the trenches everyday." Sobol has trimmed trees at his communities, improved lighting in parking lots, and launched a monthly neighborhood-watch meeting. Currently, he is also experimenting with Web-based wireless video cameras installed at entrances and in common areas. He spends nearly $14,000 a month on security personnel alone for 750 apartments. He reasons, "If you don't pay for it, then your properties will be overtaken by quality-of-life crime," like minor theft, vandalism and trespassing. A recent, nonscientific sampling of users by Apartments.com found renters were more anxious about their safety than in 2006. When looking for an apartment, prospective residents should ask upfront what apartment owners are doing to ensure on-site safety. At the very least, each apartment in a given community should have doors with locks and a peephole. Some cities and states have even passed laws requiring that.
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Industry News
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Renting a Home a Better Deal Than Buying in Much of U.S.
Digested From "Renting a Home a Better Deal Than Buying in Much of U.S."
Investor's Business Daily (12/29/09) P. A1; by Norm Alster
More Americans, even those who are well off, are opting for rent payments over mortgage payments during the current economic climate. Center for Economic and Policy Research co-director Dean Baker says the latest data indicates that in 13 areas of the United States, house prices are 18 times or more rental costs. San Jose has the highest ratio of home prices to annual rental costs, with ownership of a below-average house likely to cost nearly $2,000 more than renting a comparable two-bedroom unit. Other areas that are bargains for renters include the Bridgeport-Stamford-Norwalk, Conn., area; San Francisco-Oakland; Seattle; and the New York metro area. Nonetheless, experts say it will likely be renters -- particularly those who have savings and do not need to sell a house first -- who will lift the housing market out of the doldrums. Andrew Gerringer, managing director of development for Prudential Douglas Elliman in Manhattan, states, "The reality is that renters are some of the best potential buyers."
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S.C. Apartment Managers Sweeten Deal to Move In
Digested From "Property Managers Sweeten Deal to Move In"
WCIV-TV (12/31/09) by Shawn Smetana
During the last year, Darby Development Co., Inc. turned to giveaways and other concessions to entice people to move into its apartment communities. In some instances, Darby offered two months free rent. In others, the incentives ranged from a washer and dryer to a flat-screen TV to a $100 gasoline card. Victoria Cowart, Darby's vice president of property management, notes, "In years past, you may have seen a property have $3,000 in concessions in a year, now it's about $3,000 in concessions in a month." The company has gotten aggressive in order to combat a vacancy rate that now tops 20 percent at most Darby communities. Competition is especially fierce in the company's core Charleston, S.C., area where there are hundreds of homes and condos now for rent. Cowart adds, "Folks are not leaving the nest as fast and they are combining the nest, maybe going back home to the parents after leaving the nest. So we are seeing changes in competition, changes in our clientele and we are seeing our existing clientele struggle."
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5 Myths About Home Sweet Homeownership Debunked
Digested From "5 Myths About Home Sweet Homeownership"
Washington Post (11/15/09) by Joseph Gyourko
The article seeks to debunk five of the most common myths associated with owning a home. The first is that housing is a great long-term investment. The article's author, who is the chairman of the real estate department and the director of the Zell/Lurie Real Estate Center at the University of Pennsylvania's Wharton School, writes: "Between 1975 and 2008, the price for houses of comparable quality and size appreciated an average of about 1 percent per year after inflation. You would have earned well over 2 percent per year after inflation had you invested in Treasury bills over the same period. And you would have earned even more on riskier investments." The second myth explored concerns the federal homebuyer tax credit and whether it makes buying a house more affordable. Gyourko states, "Just because you got an $8,000 tax credit toward the purchase of a home doesn't mean that you actually saved $8,000. In areas where there is strong demand for housing and the supply of new housing is limited -- including the Washington metro region -- tax credits may result in the bidding up of home prices." Third, Gyourko dismisses the notion that homeownership is good for society because owners typically make better citizens. He insists that there is no overwhelming evidence that higher homeownership rates make for better societies. Three European countries -- Austria, Germany and Denmark -- all have ownership rates in the low 40 percent range. This is well below the 68 percent ownership rate in the United States, he points out, "but those countries don't appear to be suffering a shortage of civic-mindedness. The fourth myth that Gyourko seeks to debunk is that it's safe to buy a home with a very low down payment. In fact, homeowners can see their careers affected by not being able to move. Gyourko writes: "One of the great virtues of American society has long been our willingness to relocate and follow opportunity. But now, many families are going to be stuck in declining parts of the country, unable to take advantage of better labor market conditions elsewhere." Finally, Gyourko argues again the widely held belief that owning a home is cheaper than renting one because you save on rent. Home maintenance and upkeep eliminates a lot of that savings.
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Tribeca Cos. Snags San Francisco Apartments
Digested From "Tribeca Cos. Snags San Francisco Apartments"
Wall Street Journal (12/31/09) by Lingling Wei
In the latest example of how investors are maneuvering to pick up distressed commercial real estate, private-equity firm Tribeca Cos. has taken ownership of a block of apartment communities in the San Francisco Bay area by buying up defaulted mortgage debt at less expensive prices. Tribeca used a "loan-to-own" strategy that is becoming increasingly popular among vulture investors. The firm first bought $62 million of nonperforming mortgages for 50 cents on the dollar from the properties' lender, UBS AG, and then on Dec. 30 moved to foreclose on the apartments. The buildings were previously owned by closely held Lembi Group, which defaulted on about $300 million of loans in 2008 and handed over 50 buildings securing those loans to UBS, its largest lender, including the 10 apartment communities Tribeca took over. By buying the nonperforming mortgages on the Lembi properties, Tribeca used the debt positions to angle for ownership. Such strategies are expected to be used increasingly as more apartment owners struggle with heavy debt loads. Tribeca intends to purchase more apartments, retail sites and mixed-used properties as the economic downturn continues to sweep through commercial real estate.
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Tulsa Apartments Empty as Unemployment Rises
Digested From "Apartments Empty as Unemployment Rises "
Tulsa World (OK) (01/01/10) by Robert Evatt
In Tulsa, tough times for apartment owners and managers have meant better deals for residents, with vacancies up significantly from a year earlier and rents charged by operators flat. A new Sperry Van Ness survey shows that the average vacancy rate has increased from 8.1 percent at the end of 2008 to 9.2 percent currently. The combination of rising local unemployment and the first-time homebuyer tax credit has caused many people to move out of Tulsa-area apartment communities. As a result of the vacancies, rents rose only modestly this past year. One-bedroom rates were unchanged at 75 cents per square foot. The average two-bedroom rent also remained the same at 68 cents per square foot. Only monthly rents for studio and three-bedroom units rose. Studios climbed 2.5 percent for the year to 81 cents per square foot, and three-bedroom apartment rents rose 4.4 percent to 70 cents. David Burnett, part of the multifamily housing team for Sperry Van Ness in Oklahoma, comments, "When compared to the rest of the country, Tulsa's apartment market is holding up quite well in terms of rent growth, transactional volume and lack of distressed sell-offs."
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Little Rock Apartments Feel Crunch as Home Sales Rise
Digested From "Apartment Markets Feel Crunch as Home Sales Rise"
KTHV-TV (Little Rock) (01/02/10)
In Arkansas, Little Rock's apartment sector will continue to feel the effects of the federal homebuyer tax credit in 2010 as more residents take the leap into homeownership. For some communities, it will come down to incentives. The Arkansas apartment market maintains a 93 percent occupancy, so the incentives locally are not as drastic as in other areas of the country. But they are still there. Robin Miller of Coldwell Bankers Realty in Little Rock states, "Different landlords offer different things, but it's generally about the inventory that's available." Indeed, some Little Rock-area apartment residents say incentives are what really got them in the door. Says Kyle Speed, one local apartment resident, "The incentive they gave us is they would give us one month rent free here, and that incentive helped us a lot in choosing this place."
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Oklahoma Apartment Bargains Come as Fixer-Uppers
Digested From "Oklahoma City Apartment Bargains Come as Fixer-Uppers"
Oklahoman (01/01/10) by Richard Mize
Out-of-state investors who acquired low-priced, low-performing apartment communities in Oklahoma City and Tulsa last year are being advised to budget for a bulldozer. Through Nov. 30, the sale of lender-owned properties totaled 1,593 individual units in eight Oklahoma City apartment communities for an average of $12,257 per apartment. According to Andy Burnett of William T. Strange & Associates/Sperry Van Ness, the low-end sales helped drag the average price per unit down 70 percent versus 2008. In Tulsa, meanwhile, the average price per unit paid in 2009 plunged 53 percent compared with the year before. David Burnett, also with Sperry Van Ness, confirms that most sales in and around Tulsa involved communities built in the 1970s. In such instances, some buyers have been getting more trouble than they bargained for. Andy Burnett states, "While many out-of-state investors salivated at the appearance of cheap asset prices, we feel the majority of these projects would perform better if the new owners had a bulldozer accounted for in their renovation plans. A combination of mansard roofs, tough locations and poor reputations will result in these assets continuing to struggle for the foreseeable future."
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Legislative/Legal News
Green Grants Promote Energy Savings in Washington State Apartments
Digested From "Federal Green Grants Promote Local Energy Savings"
Everett Daily Herald (WA) (12/29/09) by Noah Haglund
Snohomish County, Wash., and the city of Everett will be getting nearly $6 million in federal stimulus money to promote local energy savings. About $200,000 of Everett's grant money will cover matching funds for a project to install energy-saving light bulbs, power strips, and thermostats in apartment communities, townhouses and small businesses. Meanwhile, the U.S. Department of Energy will provide approximately $4.8 million in grants to help the county make its buildings more efficient and expand alternative energy sources such as solar power, while Everett will receive $1 million for the same purposes.
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Bedbugs, Water Conservation Still on Apartments' Agenda for 2010
Digested From "Bedbugs, Water Conservation Still on Landlord-Tenant Agenda"
NorthJersey.com (01/03/10) by Donna Rolando
In New Jersey, a couple of major pieces of apartment-related legislation -- one dealing with water conservation, the other focusing on bedbugs -- failed to be enacted in 2009. Supporters, however, are not giving up on either one. Finding rare common ground, apartment owners and residents are hoping the state's proposed model bedbug legislation will make it into law this year. The bill's main sponsor, Assemblywoman Joan M. Quigley (D-Hudson), says she is committed to reintroducing what has been called model legislation -- a means to unite landlords and tenants in conquering the persistent bedbug problem. Bedbugs have proven to be hard to fight. Without apartment residents' cooperation during the extermination process, they can remain resilient and even conceal themselves for up to a year without food. The bill calls for apartment owners to pay for extermination and residents to cooperate with eradication measures. Conor Fennessy, vice president of government affairs for New Jersey Apartment Association, states, "We feel this is an important issue. We supported it in the Assembly and on the Senate side." Also in the last year, there was much debate on how to best conserve water in multifamily housing settings. Owner and resident groups each had their own bill. First came the Water Conservation & Metering Act, which allows for submetering so tenants would pay for their own water and therefore be motivated to conserve. The bill has since been amended to require that apartment owners install water-conserving shower heads and toilets prior to submetering beginning.
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Nebraska Police Program Helps Apartments Fight Crime
Digested From "BPD Program Helps Apartments Fight Crime"
Bellevue Leader (Neb.) (12/30/09) by Jason Glenn
In Nebraska, at least five apartment managers have enrolled in a Bellevue Police Department (BPD) program aimed at reducing crime by making small changes that can produce big results. BPD Community Policing Coordinator Jayme Krueger conducts the Crime Prevention Through Environmental Design program in Bellevue. She says the main reason the program was developed is that most criminals are opportunistic and tend to move from place to place. Krueger adds, "The idea behind this is that we don't want them putting down any kind of roots." Elements of the program include instruction for apartment owners and managers on how to perform background checks on all applicants; how to improve doors, windows, locks, lighting and landscaping; how to get owners more involved in overseeing their apartment communities; and how to encourage residents to exert greater control over what goes on in their communities. According to Krueger, the program is designed to drive criminals not just from the apartment community grounds but also from the surrounding neighborhood. The program is made up of three phases. The first is an 8-hour class that chronicles the preventative measures necessary for certification. The second phase is a security survey, which assesses how well apartment owners and managers have implemented the measures. The third phase is a safety social held at the apartment communities, during which managers inform residents about the changes and encourage them to get more involved in overall community safety.
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