News & Research Listing

News, Industry Insider, Apartment Business Update, Apartment Advocate
WSJ Editorial Board Criticizes St. Paul Rent Control

The Wall Street Journal Editorial Board has condemned the recent passing of rent control in St. Paul, Minn.

Voters in St. Paul, Minn., passed a rent control ballot initiative in early November with 53% of voters in favor of the 3% cap increase per year. The Wall Street Journal Editorial Board has condemned the rent control approval in St. Paul in its article, “Rent Control Backfires Again in St. Paul.”

The Editorial Board cites the St. Paul Pioneer Press, which reported developers are pulling out of projects, while another lost an investor.

“If a city’s housing supply can’t grow to meet demand, the natural result is that prices go up,” states the Editorial Board. “Artificial caps then produce shortages and other distortions, such as dilapidated properties that landlords don’t have an incentive to renovate.”

Click here for more on the recent passing of rent regulation in Minneapolis and St. Paul and how NAA continues to aggressively oppose all forms of rent control through its robust grassroots and advocacy endeavors.  

November 15, 2021
News, Industry Insider, Apartment Business Update, Operations Insights
U.S. Rents Continue Exponential Growth Pace

Rents across U.S. continue climbing—localizing in larger, tech markets.

Rising rents across the U.S. are not backing down after another jump in September. The monthly rental report from shows September rents are up 13.6% year over year (YoY)—about four times higher than pre-pandemic years—and technology hubs have seen a 180 degree turn from earlier this year. Tech markets, such as San Francisco, New York and Los Angeles, were ahead 7.6% YoY after falling by nearly 16%.

Overall, the median rent in the 50 largest metros was $1,654 in September, or $198 more per month. Since September 2019, rent has jumped 15.5%, an additional $222 per month. Two-bedroom homes saw a 14.4% bump YoY to a median rent of $1,855. One-bedroom rent grew nearly 14% to $1,542, while studios climbed 11.3% to $1,351.

The Tampa, Fla., market was the hottest rent market for the second straight month with a 33.3% increase YoY. The Miami, Fla., metro saw a similar jump of 31.6% YoY to a median rent of $2,500, $700 more than Tampa. The Orlando and Jacksonville metros were also in the top 10 for Florida. All top 10 metros had rent increases of at least 22.9%. Memphis, Tenn., was the most affordable market with a median rent of $1,217.

The resurgence in the tech markets since the start of the year has been exponential. Chicago and New York (Manhattan) were the only top 10 tech metros still with a rent decline YoY. Austin, Texas, showed the largest increase of 25.6% and was also the most affordable market. San Francisco saw a 9.5% increase to $3,450, the highest priced metro.

November 9, 2021
U.S. Rents Continue Exponential Growth Pace
News, Industry Insider, Operations Insights
Ancillary Income: It’s Not a Game of Hide-And-Seek

Services help highlight ways to increase secondary income.


The term "ancillary income" has a positive perception among apartment industry professions. Unfortunately, when its charged to the resident, it's often translated into one of the most negatively perceived words in the English language: “Fees.”

The result is the attempt to hide, obscure or just flat out ignore the fees being charged to residents. Other operators have simply given up on charging fees because of negative feedback from residents. 

But it doesn't have to be that way, according to the panelists on the “Ancillary Income: It's Not a Game of Hide-and-Seek" session at Apartmentalize 2021. That's because it's possible to better select, better communicate and better package charges that result in ancillary income.

"When you start thinking about fees, it's really easy to think about how you can bump those up," said Rick Ellis, Broker and Owner of ELLIS HomeSource Property Management. "But if your increased income also creates increased turnover, then the end result is probably less value. We have to remember the balance of increasing income and fees with the idea of keeping residents longer."

To maintain that balance, it's critical that anything an operator charges to their resident adds perceived value. One example Victoria Cowart, Director of Education and Outreach for PetScreening, shared was a scent detection program in which dogs were used to check every apartment for pests before move-in. Cowart was able to charge three times what it cost her to complete the service. 

"When we explained the fee to prospects, that was something that was never pushed back against,” Cowart said. “If they had a problem in their home with pests 120 days later, they had been educated. They paid us to tell them it’s not our problem. Now they own it. They bought it."

Pet fees are also a good example of fees that residents see value in, according to Cowart. They become even more valuable when operators reduce their breed restrictions and choose to charge more for breeds known for being more aggressive. 

"We have dogs of every breed on our properties," Cowart said. "Every breed that's out there. So, why not start considering a reduction of your pet breed restrictions, since they're all there anyway, and start charging for risk-based pet presence in your communities?" 

According to Cowart, the data shows that a risk-based pet fee model results in $15,000 to $30,000 more in revenue than the one-size-fits-all pet rent model of $15 or $20 a month for any pet that is allowed. "Set your cap rate on that power punch," Cowart said. "There's a ton of money on the table... a ton."

There's also a ton of opportunity to garner ancillary income from sources other than residents. Jacklyn Arnest, Senior Director of Marketing for DTN Management, implemented a partnership with Panera Bread in which the brand paid the management company to distribute promotional flyers to the residents of one of their communities.

"Everybody wants to reach your residents," Arnest said. “You have the opportunity depending on the size of your portfolio, or even if you're a 200-unit property, to find what's important to your resident and find the people who want to reach them. And use that to come together to generate income."

Arnest also generated ancillary income by renting extra space on digital monument signs to promote commercial space located on DTN Management's mixed-use communities. 

But the simplest way to take the sting out of ancillary income plays "is to stop calling them fees," Ellis said. "What a horrible, horrible word. Do you want more fees? These are services that they get to enjoy for a cost. How do you increase ancillary income without charging fees? Well, you drop the word fees. We call them services."

November 9, 2021
Ancillary Income: It’s Not a Game of Hide-And-Seek
Apartment Advocate
FEMA Officials Brief NAA Members on Risk Rating 2.0 Impact

There’s a new rate setting methodology for flood insurance. Here’s what it means for the industry.

On October 26, 2021, National Flood Insurance Program (NFIP) Senior Executive David Maurstad and Chief of Catastrophic Modeling Andy Neal spoke to National Apartment Association (NAA) members about the NFIP’s new rate setting methodology, Risk Rating 2.0.

Unlike the NFIP’s previous rate setting procedures, Risk Rating 2.0 takes into account the individual characteristics of a property and its overall flood risk. Implemented on October 1, 2021, for new policyholders and April 1, 2022, for existing policyholders, Risk Rating 2.0 largely eliminates the use of flood maps to determine rate setting, instead weighing a building’s actual risk against a variety of flood types, the structure’s mitigative features, distance to a water source and more.

Mr. Maurstad began the presentation by explaining why Risk Rating 2.0 was crucial to the long-term success of the NFIP. The program’s legacy rate setting system had created “long standing inequities that we could no longer ignore,” said Mr. Maurstad, referring to the decades old practice of setting premiums by federally mapped flood zone. This methodology had resulted in lower value properties paying higher premiums because of their location, effectively subsidizing rates for higher value properties in lower risk flood zones.

Data made available prior to Risk Rating 2.0’s implementation did not adequately provide multifamily policyholders with an understanding of how their premiums may change. Later in the presentation, Mr. Neal addressed the cloudiness of the data.

“Many communities will break both ways [experiencing increases and decreases]. It’s the nature of Risk Rating 2.0 to rate a structure on an individual basis. Even some very high value buildings have ended up with low premiums once you take into account the level of risk actually they face,” said Mr. Neal. “The most important way for you to understand what this means for you is to go and speak with an [insurance] agent and get your quote.”

NAA will continue to work closely with the NFIP to address member concerns and questions surrounding the implementation of Risk Rating 2.0. NAA will also continue to monitor the reauthorization of the NFIP. The NFIP remains an essential tool for multifamily owners and operators to help mitigate flood-based risk. With more than 5 million policyholders participating in the program, long-term reauthorization of the NFIP is critical to ensuring the health of our nation’s housing supply and safety of its community members.

To learn more about our advocacy on the National Flood Insurance Program, please reach out to Sam Gilboard, NAA’s Senior Manager of Public Policy. 

November 9, 2021
Apartment Advocate
State Supreme Court Strikes Down Source of Income

A recent decision in Pennsylvania emphasizes the opportunity to improve Section 8.

In an unprecedented victory, the Pennsylvania Supreme Court (the Court) struck down the City of Pittsburgh’s source of income ordinance in a unanimous decision. Much like similar fair housing laws in states and localities across the country, Pittsburgh’s ordinance prevented housing discrimination based on one’s status as a voucher holder, much like protections from racial or religious discrimination. Ultimately, this would have mandated owner and operator participation in the Section 8 Housing Choice Voucher (HCV) Program.

The Apartment Association of Metropolitan Pittsburgh v. the City of Pittsburgh decision culminates a six-year legal battle. In this case, the state’s highest court affirmed lower courts’ rulings which found the City did not have the statutory authority to enact this ordinance. In its defense, the City of Pittsburgh argued that it was empowered to prohibit discrimination based on source of income because the state’s Home Rule Charter (HRC) allows a municipality to exercise “any power or perform any function not denied by [the Constitution or state statute].”

However, the Court disagreed, holding that the HRC’s Business Exclusion precludes Pittsburgh’s source of income ordinance as the Business Exclusion prohibits a municipality from determining the “duties, responsibilities, or requirements placed upon businesses, occupations and employers…” The Court further expands in their decision that “[n]othing in [state statute] permits the City to enact legislation requiring residential landlords to participate in an otherwise voluntary federal housing subsidy program.” We agree that the HCV program was intended to be voluntary.

Andre Del Valle, Director of Government Affairs of the Pennsylvania Apartment Association (PAA), writes:

PAA and its members are grateful for the Pennsylvania’s Supreme Court’s intervention and diligent review of the source of income legislation, which allowed the court to reach its final decision, affirming what landlords and multiple lower court decisions have stated for years, that Pittsburgh exceeded its authority in enacting this ordinance.

While our members are grateful to put this litigation and legislation behind us, we look forward to working together with the City of Pittsburgh, its officials, and appropriate agencies, on future endeavors in a cross collaborative manner.

Given that the Court in this case referred to the HCV program as a “complex web of administrative obligations unwilling landlords must accept to satisfy the Ordinance…”, it should come as no surprise that a study funded by U.S. Department of Housing and Urban Development (HUD) found that 68 percent of housing providers who refuse voucher holders had, in fact, accepted them previously.

The HCV program’s requirements can create uncertainty in rental housing operations and undermine the ability of owners to properly manage risk. These challenges lead existing housing provider participants to leave the program and deters new participants from opting in. The Choice in Affordable Housing Act is the right approach to address the program’s challenges and incentivize voluntary participation in the program as Congress intended.

The National Apartment Association (NAA) continues to work with our affiliate network to oppose efforts that make voucher acceptance mandatory and engage with federal policymakers to offer solutions that increase positive outcomes for both participating housing providers and renters alike.

Currently, 19 states, more than 100 localities and the District of Columbia have source of income laws on the books. To learn more about source of income protections or the HCV program, please contact Ben Harrold, NAA’s Manager of Public Policy.

November 9, 2021
Apartment Advocate
Rent Control Measures Adopted in Minnesota

Two notably different approaches to rent control were approved by voters in St. Paul and Minneapolis.

On November 2, 2021, Minneapolis and St. Paul, Minnesota voters narrowly approved rent control in two unprecedented ballot initiatives. In Minneapolis, the passage of Question 3 enables the City Council to set rent regulation policies while St. Paul voters’ approval of Question 1 will institute a strict rent stabilization ordinance capping rent increases to 3 percent annually with limited exceptions.

While limits on rent increases could sound like an effective way to promote long-term affordability in a region, the reality is just the opposite. The overwhelming majority of economists agree that regulating rent prices will exacerbate housing affordability shortages, decrease the quality of existing units and hurt the regional economy.

The National Apartment Association (NAA) is disappointed with the outcome of these ballot initiatives given the likely consequences on the Twin Cities’ renters, housing providers and the broader housing industry. We commend the Minnesota Multi Housing Association for their tireless effort in advocating against these harmful ballot questions and look forward to working with them further, especially in Minneapolis where ultimate action on rent control will be decided by the City Council.

NAA continues to aggressively oppose all forms of rent control through robust grassroots and advocacy endeavors. To learn more about rent regulation policy, please contact Ben Harrold, NAA’s Manager of Public Policy.

November 8, 2021
News, Industry Insider, Apartment Business Update
Cushman & Wakefield Invests $500M in Greystone

Cushman & Wakefield strengthens presence in rental housing industry.

Real estate services firm Cushman & Wakefield and Greystone, a commercial real estate finance company, are combining forces on a strategic joint venture to provide advisory services and capital solutions for clients. The transaction includes a $500 million strategic investment by Cushman & Wakefield to acquire 40% of Greystone’s Agency, FHA and Servicing operations. It’s expected to close during the fourth quarter of 2021.

The move gives Cushman & Wakefield a more direct line of debt products for its client base to include property acquisitions and refinancing. Greystone plans to use the investment on product offerings to better position the company for expansion.

“We’re excited to offer a new integrated capability to our investor clients with more direct access to Greystone’s balance sheet and capital solutions, including debt financing with Fannie Mae, Freddie Mac, and HUD,” said Andrew McDonald, Cushman & Wakefield Chief Executive, Americas, in a release.

Cushman & Wakefield continues to cement itself in the multifamily sector following the 2020 acquisition of Pinnacle Property Management Services, one of the largest property management firms in the nation.

“While we are initially focused on the multifamily market, we see sizable growth opportunities ahead in serving clients with capital and services in other commercial asset classes, and I couldn’t be more excited about the potential, and what the future brings,” said Greystone Founder and CEO Stephen Rosenberg in the release.

October 25, 2021
Cushman & Wakefield Invests $500M in Greystone