News & Research Listing

News, Industry Insider, Marketing Buzz
Hines Launches Property Management Firm

Willowick Residential will work in partnership with the firm’s rapidly growing multifamily portfolio of 63 projects across 38 U.S. cities.

Hines announced the launch of Willowick Residential, a multifamily property management firm. Willowick Residential will work in partnership with the firm’s rapidly growing multifamily portfolio of 63 projects across 38 U.S. cities, including luxury towers, urban mid-rises and traditional garden-style apartments.

Named after founder Gerald D. Hines’ first multifamily residential building in Houston’s River Oaks area, Willowick Residential builds on the firm’s legacy of excellence and attention to detail. In the early days of his firm, Hines managed The Willowick himself, believing that an owner had greater insight and desire to manage a building properly.

“Rooted in the expertise of our regional offices, our growing and successful multifamily division has expanded for-rent apartment development activity throughout the United States,” said Jeff Hines, president and CEO of Hines in a news release. “Willowick Residential seeks to deliver a superior level of resident service, above-industry retention rates, cost-effective building management and superior engineering and maintenance of the physical asset.”

Launched earlier this year, Willowick Residential is currently managing nine properties and counting throughout the United States. The venture’s competencies include acquisition services, advisory services, engineering and maintenance, team member recruiting and development, lease-up and transition services, marketing and communications, reputation management, market analysis and research, vendor compliance and information technology.

Hines has managed properties since its inception in 1957. With 35 team members so far with decades of experience, the venture’s competencies include unparalleled service, asset management, energy efficiency and the reduction of real estate investment risk. The Willowick Residential property teams are highly experienced, thoughtfully trained, and will bring Hines’ standards and experience to all properties to deliver superior service, cost-effective building management and above-industry retention.

October 12, 2020
apartment buildings
News, CampusConnex
Will COVID Lead to a Student Building Boom?

With shared bathrooms and kitchens, older dorms may be rendered obsolete.

When COVID hit in March, colleges and universities quickly got students out of the classroom and switched to online learning.

“Obviously, operationally, they were not prepared to implement what would become the social distancing norms and all the CDC practices,” says Bill Bayless, CEO of American Campus Communities on CBRE’s The Weekly Take. “And so when you go back to March, there was really a panic…”

Over the past six months, Bayless says things have stabilized, and universities have adopted CDC social distancing standards. “They have all put infrastructure in place to have the flexibility to be online when they need to be in person when they can be…,” he says. “And so while it’s certainly not business as usual, higher education is underway again. Students are achieving their educational objectives and goals. And for the most part, they are back in their college towns…”

While universities seem to have put the proper structures in place, some students still aren’t getting the message. In late September, The New York Times reported that more than 35 colleges had at least 1,000 cases of COVID.  Two hundred thirty colleges had more than 100 cases. The paper said that large university towns like La Crosse, Wis.; State College, Pa.; and Gainesville, Fla., have experienced sizable outbreaks at universities.

Jake Jarman, COO of Redstone Residential, says he has seen a surge of COVID cases among students in the last few weeks. Redstone is making an effort to educate residents about the dangers of COVID.

“We are being aggressive with our marketing campaigns to remind our residents about social distancing and good hygiene,” Jarman says. “Many of the college-aged students believe that their immune system is invulnerable to this virus.”

In some cases, student housing has seen demand increase after COVID hit. Bayless says his portfolio had 93% rent collection in April, May and June. During that time, ACC’s apartments picked up 1,000 new residents when colleges and universities told students to leave.

Bayless says older, on-campus housing, with its shared baths and kitchens, may be rendered obsolete in the future because it does not meet CDC guidelines. That should create an opportunity for companies that create modern student housing, where a pod of four students can share kitchens and can self-isolate.

“When you look at what are the real opportunities for companies like American Campus post-COVID, it is to continue and to modernize that housing,” Little says. “So, there is likely going to be a second building boom on-campus post-COVID as universities deal with the weaknesses of those products.”

 

October 7, 2020
student on campus
News, Industry Insider
When is it Time to Replace a Roof?

How to know if you need a new roof or if repairs will do the trick.

Dear Maintenance Men:

How do I determine if it is time to replace a roof or just have some maintenance or minor repairs done?

Dear Ed:

Determining if a roof actually needs replacement or should be repaired is sometimes more of an art than a science. An old roof in good condition that has roof leaks may be as simple to solve as an inspection of the roof flashing system. The roof flashing is where the roof meets a different material or changes course. For example, roof flashing is found around the chimney, in valleys, where the roof transitions to vertical a wall or around vent pipes. Any roof transition area is a potential roof leak. Keeping the roof flashings in good order is the first line of defense. However, should your roof be experiencing leaks in several different areas, missing granules (bald spots) and pooling; might be an indication of a roof past its prime and ready for replacement. In the case of a shingle roof, the telltale signs are more obvious. For example, a shingle roof may exhibit curling edges, loss of granules and material brittleness. This roof may be beyond repairs and should be replaced. Tile roofs may present different issues as they may look great on the outside, but have hidden damage under the tiles, such as a rotted felt membrane or disintegrating roofing paper. These are much more difficult to solve and often times the repairs are more expensive than replacement.

 

When requesting a bid from a roofing contractor, always ask for a cost to repair the existing roof and a cost to replace the roof. When having multiple bids, always use the same scope of work for each roofer. A deviation in scope will make it harder to determine the correct course of action.

 

October 2, 2020
worker working on the roof
News, Industry Insider
HUD Issues Final Revised Disparate Impact Rule

On September 24, the U.S. Department of Housing and Urban Development (HUD) published its final rule, HUD’s Implementation of the Fair Housing Act's Disparate Impact Standard, effective October 26. It amends the agency’s 2013 rule and refines its interpretation of the Fair Housing Act’s (FHA) disparate impact standard to better reflect the U.S. Supreme Court’s (SCOTUS) 2015 ruling in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. (also known as “Inclusive Communities”). Thank you to the thousands of National Apartment Association (NAA) members who participated in the association’s calls to action and made the industry’s voice heard. The revised rule is a direct result of this advocacy.

For years, NAA, the National Multifamily Housing Council (NMHC) and their members have urged HUD to amend the Obama-era rule to bring it more in line with SCOTUS’ landmark decision in Inclusive Communities and to provide guidance that ensures housing providers may continue to execute necessary business practices without running afoul of fair housing requirements. Under disparate impact theory, a rental housing provider can be sued if the owner or operator implements a policy that is neutral on its face but nonetheless has an unintended, discriminatory effect on members of a protected class under the FHA.

While the rental housing industry remains committed to providing equal opportunity for all renters, housing providers voiced concern about their broad liability for disparate impact claims in light of HUD’s 2013 rule and subsequent guidance. Seemingly neutral and common business policies, such as occupancy limitations, criminal screening criteria and eviction screening policies could trigger discrimination claims under the disparate impact standard. Denial of Section 8 voucher holders also have been scrutinized under disparate impact theory as plaintiffs argue this practice disproportionately affects people of color, persons with disabilities, and families with children.

NAA is working on updated industry guidance and will update its affiliates and members shortly with its plans.

To learn more about disparate impact, contact Nicole Upano, NAA’s Director of Public Policy or visit the Disparate Impact page on the NAA website.

 

September 28, 2020
apartments
News, Industry Insider, Apartment Advocate, COVID-19
Preliminary Guidance on CDC Eviction Moratorium

On September 1, 2020, the U.S. Centers for Disease Control and Prevention (CDC) filed an order in the Federal Register to temporarily halt residential evictions to prevent the further spread of COVID-19. The order was formally published on Friday, September 4, 2020 and bars evictions of renters in residential housing until December 31, 2020. 

The order:

  • Applies to virtually all rental housing providers and prohibits any eviction action to remove a renter from their housing during the covered period, so long as the renter provides the required declaration to their housing provider;
  • Does not prevent evictions based on the lawful reasons articulated in the order, other than nonpayment of rent;
  • Does NOT eliminate the resident’s obligations under the lease, and housing providers may charge late fees or other penalties for nonpayment of rent; and
  • States that any person or organization that violates the order may be subject to up to $500,000 in fines per violation and/or jail time. Enhanced penalties apply if the violation resulted in death, at the discretion of the U.S. Department of Justice. 

For renters to be eligible for the order’s protections, they must provide a declaration under penalty of perjury to their housing provider indicating the following:

  • The individual has used best efforts to obtain rental assistance;
  • The individual expects to earn no more than $99,000 (no more than $198,000 when filing jointly); was not required to report income in 2019 to the IRS; or received a stimulus check pursuant to the CARES Act;
  • The individual is unable to pay their full rent due to a number of factors that remain unconnected to COVID-19;
  • The individual is using best efforts to make timely partial payments; and
  • Eviction would likely render the individual homeless or force the individual to move into and live in close quarters in a new congregate or shared living setting because the individual has no other available housing options.

An example of the declaration can be found in the order, and the CDC has provided the document on the website here. Please note that this form will immediately halt any eviction proceedings, and housing providers are not required to distribute the form to residents.

Jurisdictions that have an eviction moratorium providing the same or greater level of public-health protection than the CDC order are exempt from its requirements.

To help housing providers better understand their rights and responsibilities under the order, NAA, in partnership with the Texas Apartment Association (TAA), has prepared preliminary guidance and FAQs. This guidance is not intended to be state specific and should be used in conjunction with advice from local legal counsel to interpret these requirements in light of existing federal, state and local eviction laws.

NAA and TAA are also sponsoring a free 75-minute webinar, "Understanding the CDC Eviction Moratorium," on Thursday, September 10 at 2 p.m. CDT. The webinar features NAA Senior Vice President, Government Affairs Greg Brown, NAA Vice President, Legal Affairs and Counsel Scot Haislip, NAA Senior Staff Attorney Ayiesha Beverly, NAA Director of Public Policy Nicole Upano, TAA General Counsel Sandy Hoy and Hoover Slovacek Equity Partner Howard Bookstaff, who will provide the latest updates on the CDC Order. Reserve your space now

There still remain a number of unanswered questions about the Order and how it will be implemented; this is an evolving situation and NAA will provide for updated information as it becomes available. If you have any questions about the CDC order, or COVID-19 in general, please reach out to NAA staff at [email protected].

 

September 8, 2020
eviction notice
News, CampusConnex, COVID-19
Zoom Deejays and Bingo for Morale and Relief

Many apartment community operators have responded to COVID-19-related staff challenges by trying to alleviate stress.

Many apartment community operators have responded to COVID-19-related staff challenges by offering employee counseling programs, virtual Zoom parties complete with deejays and costumes, and sometimes cash bonuses or gift cards to help alleviate the stress.

BH Management has paired employees together through an outreach program to keep workers positive through the crisis. “We provide employee assistance program services for our team members who need additional help working through the stress while going through the pandemic and have mentors along the way for them to lean on when times get too much,” says Senior Regional Vice President Melody King. “We try to remind them continually to have fun. We host parades, online reading clubs, virtual exercise groups, food trucks and provide pop-in surprises for our teams and residents to ensure that they know we are always here to support them in any way we can.”

Marcie Williams, President of Charlotte, N.C.-based RKW Residential also says her firm is helping employees cope through its own employee-assistance program. “We’ve really encouraged our employees to call and utilize the counseling services if they’re stressed about work,” she says, adding that the company is also considering cash incentives.

The Altman Companies has increasingly focused on keeping morale high as the pandemic has worn on, says Chief Operating Officer Tim Peterson. “We’ve been working hard to keep our teams connected. We can’t bring them together physically, but we’ve had a series of virtual hangouts that have included our top leadership calling out and recognizing success from our people in the field. We’ve had a deejay and themes for everyone to dress up and express themselves. The consistent message has been that we are all in this together, and that we are going to win, despite these obstacles.”

A favorite sports team party with staff members dressing as a University of Florida Gator and a Florida State University cheerleader; and a Fourth of July party where an American flag cowboy hat, boots and shirt were on full display.

Audubon held a video contest for staff at its different apartment communities so employees could show how they’ve been coping, with gift cards and dinner on the company as the main prize. “One of our teams did a video showing how they clean all day, wiping down every surface while wearing masks, and they had fun with it; it was hysterical,” says Tammy Shields, Chief Operating Officer. “People are trying to approach it with humor, and we’re doing stuff like that to keep people motivated and happy to be at work.”­—J.B.

 

 

September 1, 2020
conference call, team, people
News, Operations Insights, COVID-19
Ancillary Revenue’s Winners and Losers

Pet fees are up while late fees are down.  

As the COVID-19 pandemic continues to cast a long shadow over the rental housing industry, ancillary revenue would seem to be a low priority. In previous years, collecting ancillary fees was an important — though legally fraught — concern. But now, with job losses mounting around the country, many apartment operators are simply focused on collecting rent on time.

For example, Haven Realty Capital, based in El Segundo, Calif., is sacrificing the flow of one ancillary revenue stream in exchange for trying to keep its residents in place. “Month-to-month premiums were waived to allow flexibility for residents who had lease expirations during the pandemic months,” says Sudha M. Reddy, Managing Principal of Haven.

In a recession, apartment operators are justifiably focused on just “keeping heads in beds.” Operators may even need to think twice about imposing ancillary fees.

But in the longer term, the COVID-19 lockdown may present new revenue opportunities, if residents receive financial relief and the unemployment situation stabilizes. If trends such as teleworking become commonplace, the COVID-19 lockdown could change the way residents use energy and bandwidth and give operators the chance to consider residents’ high-speed connections to the outside world. 

Not Pressing the Issue

The general rule for multifamily ancillary revenue is about 5 percent of total income, but many of the fees are also accompanied by attendant costs. In the short term, Max Sharkansky, Managing Partner of Trion Properties, based in West Hollywood, Calif., is more concerned about on-time rent payments.

“We [could] charge higher pet rates and higher lease-break fees, but we’re just not pressing that issue because it’s tough out there,” Sharkansky says. “We’re signing leases, we’re doing fine, our collections are in the mid-90s. But we’re also in a 12 percent unemployment market, so I don’t know if this is an optimal time to start increasing our fees.” 

As the amenity wars heated up during the past decade, ancillary revenue took a back seat to services, such as dog walking. But as the recession lingers, those services are also in jeopardy.

“It’s so hard to compete on what has become a commodity,” says Brian Zrimsek, Industry Principal of the tech firm MRI Software, based in Solon, Ohio. “The apartment can only be so big; the pool can only be so grand. So we found operators moving to adding services, dog-walking services, laundry pickup services and yoga classes — amenities as a service. But when a recession comes, that’s the first thing to go.”

This strategy is a throwback to the 2008 housing market collapse. “In 2008 they lowered prices and increased terms to lock people in,” says Zrimsek. “They’d rather have sure but thin revenue. In good times, it’s okay to have a little nickel-and-diming for things. We’re also seeing concessions come back. It would not surprise me if things that people charge for in the best of times they change their mind on now.” 

Sorry, You’re Late

Early in the pandemic, municipalities, states and the federal government moved to curtail evictions and late fees to help keep residents in their homes. Now, six months into the crisis, what were once seen as temporary measures are being extended in many parts of the country as the apartment business takes the hit.

At Haven Realty Capital, late fees have traditionally been a large revenue stream, followed by pet rent and admin fees. “[But] late-fee revenue has dropped to zero since April,” Reddy says. “The moratorium on late fees has also eliminated the incentive to pay on time, resulting in a delay in our collections at some of the properties.”

It’s the same story at Trion Properties, as Sharkansky simultaneously eyes what’s happening in collections and the state legislature. “We’re in California, and not allowed to charge late fees,” he says. “In California, it’s open-ended. It’s a function of when they remove the emergency order. In Oregon, it was set to expire but was then extended to Sept. 30. We still get the majority of our rents in the first week [of the month], but the next 20 to 25 percent are paying in the following three weeks.” 

Future Opportunities

As many residents have been hunkered down for months now, apartment operators are seeing an increase in their energy and data consumption. Even before the pandemic, says Todd Richman, Senior Vice President at Morgan Properties, based in King of Prussia, Pa., marketing contracts with cable providers and Internet providers did well for his company.

Richman is predicting that addiction to Netflix and Zoom dependence is going to raise the income from fees. “I would assume that once we see the numbers, we might have higher income from these services,” he says. “With people working from home, they may have had to upgrade to a better Internet service, they may have ordered more services. It’s possible it’s remained the same. But I’m expecting Internet penetrations to be higher than they’ve ever been.”  

Laundry rooms are another small but reliable revenue source for Morgan, and Richman is expecting to see an uptick — again, because people are spending more time at home.

Trion’s Sharkansky also is bullish on laundry. Trash collection, water usage, pest control and sewage fees are also looking up. “Ratio utility billing [RUBS] is huge,” he says. “Although I don’t know if you can qualify that as ancillary income; it’s more of an expense reimbursement, but it’s on the income side of the P&L.”  

Doggy Day Care

The pandemic has been a huge boon for pet adoption, according to a number of sources. The consensus is that people who had been putting off getting a dog or cat because they didn’t spend enough time at home suddenly have no excuse.

In April, Kitty Block, CEO of the Humane Society, told the Chicago Tribune, “I think it’s a combination of reasons. We’re going through a global pandemic, and its anxiety-provoking and it’s isolating. Those who are fortunate enough to work remotely are doing it from home, so people have the time now and the desire to open up their homes to a pet, to give that animal a chance.”

The trend is confirmed by the numbers Trion Properties is seeing. “In April, May and June we had an uptick in pet fees,” Sharkansky says. “Looking at year-over-year for June, portfolio-wide, we did about $9,400, and last year [it] was around $7,000, so we’re seeing a 34 percent increase.”

But even enforcing pet fees will likely get some pushback from residents, demonstrating, once again, that at this point in time, fees are a touchy issue

“I don’t know that the first thing a resident does when they get a pet is call the office and let us know,” says Richman of Morgan Properties. “We’re trying not to be intrusive to residents about being in their apartments. We’re not doing walk-throughs of each apartment; it would be very hard to do that.”  

Scott Sowers is a freelance writer.

August 24, 2020
calculator, staff
NAA Press Releases
NAA Statement on Trump’s Halt of COVID-19 Relief Negotiations

ARLINGTON, VA | October 6, 2020 – Statement from National Apartment Association (NAA) President and CEO Bob Pinnegar on President Trump ending negotiations for additional COVID-19 relief legislation:

We are entering the seventh month of the COVID-19 emergency and hard-working Americans need help. Critical bills – like rent, utilities and groceries – are still due and it is abundantly clear that, for many, there is simply not the means to pay. Passing relief measures, like direct rental assistance, should not be a political game; emergency rental assistance is the only policy that will keep renters safely housed and ensure rental housing providers can pay their bills.

The nation’s 40 million apartment residents, 17.5 million jobs and a $3.4 trillion industry depend on Congress and the Administration fulfilling their obligation to the American people by bypassing politics and passing an additional relief package that includes robust financial assistance.  

###

About NAA
The National Apartment Association (NAA) serves as the leading voice and preeminent resource through advocacy, education and collaboration on behalf of the rental housing industry. As a federation of 152 affiliates, NAA encompasses over 85,000 members representing more than 10 million apartment homes globally. NAA believes that rental housing is a valuable partner in every community that emphasizes integrity, accountability, collaboration, community responsibility, inclusivity and innovation. To learn more, visit
www.naahq.org.

October 7, 2020

Pages

Industry