News & Research Listing
Demand for one-bedrooms during the pandemic have skyrocketed, resulting in unfilled two-bedroom apartments at lower rates.
While it may defy logic, there are markets in the U.S. where residents can spend less on a two-bedroom than a one-bedroom. A new report from Rent.com reviewed the top 30 cities where the cost of renting a two-bedroom apartment home is less expensive. Demand for one-bedrooms during the pandemic have skyrocketed, resulting in unfilled two-bedroom apartments at lower rates.
The price differences between one- and two-bedrooms ranged from a couple dollars to more than $1,300. Most of the cities were in the Midwest and West, a many of the smaller cities are close to major metros where rent is higher.
Temecula, Calif., topped the list with a difference of $1,349 between one- and two-bedrooms. Average one-bedroom rent is $3,234 compared to $1,885 for two-bedrooms. Ventura, Calif., had a difference of $925 ($4,185 vs. $3,260). Rancho Cordova, Calif., was third with a difference of $264 ($1,825 vs. $1,561). Bakersfield and Upland were also in the top 10 for California. Lafayette, Ind., was No. 30 on the list with a difference of $9 ($1,036 vs. $1,027).
On the opposite side, the research covered the cities with the highest cost to jump from a one-bedroom to a two-bedroom. Berkeley, Calif., ranked at the top with a monthly difference of $2,380 on average rent between July 2020 and July 2021. Right behind was New York City, where it cost renters an extra $2,194 to upgrade their room count. Slightly behind were Santa Monica, Calif., Los Angeles and Bellevue, Wash., all with two-bedrooms going off with more than a $1,500 per-month difference.
“The American Dream is changing, and renters are becoming more and more a part of that.”
“With all that’s happened in the past year, it’s never been more important to know what’s going on [in the policy realm],” noted Paraag Sarva, CEO and Co-Founder of Rhino as he opened a unique and interactive session on government initiatives that are impacting rental housing operators across the country at NAA’s Apartmentalize.
The panelists leading the session recounted how the immense challenges of the pandemic have led a very different renter landscape nearly 18 months later. Today, 35% of households in America are renter households, totaling 110 million renters nationwide. This trend reiterates that for many, renting is more than a choice, it’s a lifestyle. And ultimately, as Sarva noted, “the American Dream is changing, and renters are becoming more and more a part of that.”
This shifting landscape largely found its roots in the onset of the pandemic - something that our industry remembers all too well. “We had to adapt quickly,” recalled Leslie Henry, Director of Training and Development for Towne Properties. Henry has more than 26 years of property management experience and pointed to the vast amount of time it took to change daily tasks that once seemed like simple practices. “It took at least a month to communicate changes in rent collection and other guidelines,” she told those in attendance.
Many companies are still adapting and realizing which pandemic adaptations are here to stay. James Sirmans, Business Development Manager for Wehner Multifamily, believes that many of these changes will be more permanent. “We’re still adapting. [Things like] work from home are here to stay” and onsite amenities will continue to adapt to meet the needs of residents, he noted. Henry added that “without a doubt, virtual tours and self-guided tours” are here to stay for her company.
While the initial challenges of the pandemic’s onset were difficult, rental housing providers continue to face the brunt of pandemic policy. Though the U.S. Supreme Court struck down the U.S. Centers for Disease Control and Prevention’s (CDC) federal eviction order on August 26, 2021, several state and local eviction moratoria remain in place. Many of these orders may face extension according to Nicole Upano, Director of Public Policy for the National Apartment Association (NAA). Ultimately, eviction moratoria are fundamentally flawed policy, leaving renters with insurmountable debt and rental housing providers to unfairly hold the bag.
The panel also flagged several policies that are growing around the nation. One, renter’s choice legislation, originated in Cincinnati nearly a year ago. These policies require property owners and managers to provide multiple options for collecting security deposits or listed alternatives, for example, security deposit insurance. Sirmans noted that while well-intended, these policies ultimately could hinder the efficiency of rental housing.
Upano emphasized that NAA continues its robust advocacy at all levels of government to ensure that the legislation and regulation enacted result in responsible solutions that help everyone. At present, the association advocates for or supports more than four pieces of legislation in U.S. Congress, all aimed at addressing the nation’s mounting housing affordability crisis. For example, one piece of legislation seeks to expand and improve the U.S. Department of Housing and Urban Development’s (HUD) Section 8 Housing Voucher Program. “If people need more time to recover from the pandemic - and we know that eviction moratoria are not the answer, we need to better set up the Section 8 program for success,” added Upano. Other policy priorities - like improving rental assistance distribution - also remain top of mind for the association.
Of interest to rental housing owners and operators, the U.S. Occupational Safety and Health Administration’s (OSHA) recently released updated guidance that encourages employers to mandate COVID-19 vaccines for employees returning to work. The guidance also suggests that workplaces should continue to implement face covering protocols for both vaccinated and unvaccinated employees, guests and customers at indoor locations. OSHA’s latest advisory comes just three months after the U.S. Centers for Disease Control and Prevention (CDC) issued recommendations which downplayed the need for face coverings in indoor public settings.
In January, the U.S. Department of Labor (DOL) was ordered to determine the feasibility and scope of an Emergency Temporary Standard (ETS) that would govern the ways in which certain industries protect their workforces from exposure to COVID-19. DOL and OSHA exceeded the timeline issued by President Biden, instead releasing guidance in piecemeal on voluntary mitigation practices like social distancing, wearing of face coverings and vaccinations. Guidance also covered building operation functions such as voluntary minimum standards for building ventilation systems.
OSHA’s recommendations for workplace vaccination requirements come at a time when concerns are mounting over the new delta variant and vaccination rates appear stagnant. In March, the National Apartment Association (NAA), in conjunction with insurance and risk advisory firm HUB International, held a learning session that discussed the legality and inherent risks of mandatory vaccination programs. According to HUB’s guidance, employers face no hurdles requiring vaccinations in the workplace so long as reasonable accommodations are made for employees requesting medical or religious exemption.
At the time of the learning session, three COVID-19 vaccines had been granted emergency use authorization. In August, the U.S. Food and Drug Administration (FDA) fully approved the Pfizer-BioNTech COVID-19 vaccine. With the FDA’s stamp of approval, employers may show greater confidence in implementing mandatory vaccination programs in the workplace.
NAA will continue to monitor new guidance from OSHA and analyze its impact on employers and employees within the rental housing industry.
For more information on labor and employment issues, please reach out to Sam Gilboard, NAA’s Manager of Public Policy.
President Biden has taken several steps to ensure an increase in the supply of affordable housing, according to a new fact sheet on the Administration’s housing agenda released on September 1, 2021. In the plan, the White House lays out four areas in which immediate action has been taken to drive affordability in housing: boosting the supply of affordable housing, increasing the availability of 2-4 unit properties, increasing homeownership for individuals and working with state and local stakeholders to reduce exclusionary zoning.
One of the plan’s first actions is to increase the contributions that government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac may invest towards the Low-Income Housing Tax Credit (LIHTC). LIHTC provides critical support to the nation’s affordable housing production by helping apartment firms operate below-market rate housing in an economically feasible manner. In addition to the GSEs’ increased investment in LIHTC, the Treasury Department will unleash $383 million of new funding into the Capital Magnet Fund grant program which will help leverage private capital for the development of new affordable housing. The plan also relaunches a partnership between the Treasury Department and the Department of Housing and Urban Development’s Risk Sharing Program. Together, the two agencies will help mitigate lending risk to state and local housing finance agencies and enable the development of new affordable housing.
The plan also calls upon the Federal Housing Finance Agency (FHFA) to address the GSE mortgage eligibility requirements for buildings with 2-4 units. In March, the GSEs implemented restrictions on its lender partners that reduced the number of loans they would acquire, particularly impactful for properties with 2-4 units. It is anticipated that these restrictions will be reversed, allowing for greater lending to these property types and placing much-needed units back into the housing stock.
Finally, the Administration will explore federal solutions that will compel greater housing development at the state and local level. This will include identifying and seeking pathways to reduce common barriers to housing development. The plan also looks to leverage resources like the State and Local Fiscal Recovery Fund to promote new affordable housing development and orders the immediate publication of a Housing Supply Toolkit to be distributed to state and local governments.
The White House expects the plan to create more than 100,000 new housing units over the next three years. While this output does not meet the nation’s need for the more than 4.6 million new housing units that the National Apartment Association (NAA) estimates are needed over the next ten years, it is a step in the right direction. NAA applauds the White House for signaling a strong commitment to increasing the supply of housing, breaking down barriers to housing development and reclaiming affordability for the nation’s renters. NAA looks forward to being a trusted partner and resource to the Administration as it further defines its plans for housing affordability.
For more information on the White House Plan to Increase Affordable Housing, please contact Sam Gilboard, NAA’s Manager of Public Policy.
On August 25, 2021, the U.S. Department of Treasury (USDT) released its third edition of guidance to help state and local administrators improve their rental assistance programs and accelerate distribution of federal Emergency Rental Assistance (ERA) program grants. While a number of the changes to the guidance are beneficial to the industry, additional changes are needed to ensure that grantees distribute federal rental assistance expeditiously to housing providers and their residents. According to recent USDT reporting, states and localities have only distributed 11% of the $46.5 billion in available funds.
As a direct result of the National Apartment Association’s (NAA) advocacy, the new guidance explicitly permits self-attestation to be used in documenting each aspect of a household’s eligibility for ERA, permits state and local ERA programs to rely on self-attestation alone to document household income eligibility when documentation is not available during the public health emergency and makes clear that state and local grantees may—at an eligible resident’s request—provide assistance to cover remaining rental or utility arrears at a previous address.
Additionally, the updated guidance will enable state and local grantees to provide advance assistance to housing and utility providers based on estimated eligible arrears, as well as permit grantees to make additional rent payments to housing providers that take on residents facing major barriers to securing a lease, including those who have been evicted or experienced homelessness in the past year. To learn more about the newly minted guidance, please visit the USDT’s website.
The revised USDT guidance is welcome news as some of these recommendations align with the real estate industry’s program reform priorities (see our August 18 letter to Congress and Administration officials). However, we continue to urge additional program enhancements in our advocacy that would increase positive outcomes for both participating housing providers and renters, including:
- Align ERAP and the CDC Eviction Order’s income requirements for renters to close the gap in eligibility;
- Require state and local grantees to facilitate bulk processing of applications and payments;
- Direct grantees to allow housing providers to apply on behalf of residents and establish a safe harbor for the presumption of renter eligibility when residents refuse to engage in the application process;
- Allow ERAP to reimburse rental property owners for rent arrears even if the renter moves out or terminates their tenancy early and prohibit program requirements that force housing providers to return payments in these cases;
- Clarify that renter eligibility is not contingent on having a COVID-19 diagnosis; and
- Prohibit grantees from imposing program requirements or proscriptions unrelated to payment of outstanding or future rental assistance.
NAA continues its advocacy efforts with Congress and the Administration to ensure that rental assistance programs continue to be executed in an efficient and effective manner. If you have any questions regarding rental assistance, please contact Jodie Applewhite at [email protected]
Experts explore the near- and long-term landscape of rental housing management.
The past 18 months have presented myriad challenges for rental housing providers across the nation. Largely, these difficulties have been borne from legislation and regulation adopted in response to the COVID-19 pandemic. Two resident experts at the National Apartment Association (NAA), Nicole Upano, Director of Public Policy, and Ayiesha Beverly, Assistant Vice President of Legal, led a dynamic discussion on what the industry landscape will look like near-term and down the road during NAA’s Apartmentalize conference.
Since their initial enaction, eviction moratoria have left renters with insurmountable debt and rental housing providers to unfairly hold the bag, ultimately jeopardizing the future of affordable and sustainable housing. In early August, the U.S. Centers for Disease Control and Prevention (CDC) moved forward with a more targeted federal eviction moratorium aimed at halting evictions in areas with high transmission of COVID-19. On August 26, 2021, the U.S. Supreme Court lifted the stay on the CDC’s federal eviction order. In essence, Beverly emphasized that this ruling “immediately lifted the CDC’s eviction order” nationwide.
The Court’s ruling, however, does not apply to any state or local eviction moratoria. Further, despite this ruling, Upano noted that “there will be efforts to extend state and local moratoria going forward.” Further, the Supreme Court’s ruling made it explicitly clear that “in order for another federal eviction moratorium to come about, it would need explicit congressional authorization,” added Beverly. Upano added that any path to congressional passage is unlikely. In light of this, Upano suggested that instead, “they’re [the federal government] going to put restrictions on the [rental assistance funds],” Upano projected.
Both Beverly and Upano noted the distribution of these key rental assistance funds has been slow. To date, only 11% of the nearly $47 billion in federal rental assistance - just $5.1 billion in total - has reached renters and housing providers in need as of July 31st. Ultimately, these funds are a critical down payment in making both renters and housing providers whole again. NAA’s robust advocacy helped urge Congress to allocate these funds, and Upano emphasized that our network of affiliated associations will continue to work with state and local grantees to ensure that these funds start being distributed more quickly.
In addition, NAA’s estimates place $26.6 billion in additional rent debt that will remain uncovered by rental assistance even once the full $47 billion is disbursed. In addition to other legal cases that Beverly recounted, NAA recently launched a lawsuit seeking this amount in damages from the federal government for rental housing providers who have suffered under the CDC’s unlawful federal eviction order.
Beverly also pointed to increased eviction protection notification requirements enacted by the Consumer Financial Protection Bureau (CFPB). Similarly, Beverly noted that other states are enacting eviction moratorium “off-ramps.” For instance, Beverly pointed out some states “place further eviction moratoriums for [rental housing providers] that accept rental assistance from a resident.” While many states are addressing this differently, these slow and gradual exits to eviction moratoriums are becoming more frequent throughout the country.
Ultimately, Upano and Beverly noted that the pandemic’s long-term impact on the industry will be seen in legislation and regulation moving forward. Namely, both the White House and other executive agencies remain focused on connecting renters with assistance and are encouraging states and localities to adopt eviction diversion programs. Further, Beverly added that understanding these complex and ever-changing legal updates can be challenging and that “now’s the time to work very closely with your local counsel to ensure that you’re able to move smoothly through the process.”
Here are the top amenities according to owners, developers and designers.
The COVID-19 pandemic has driven rental housing professionals to significantly and consistently adjust operations, and these changes have been witnessed in all aspects of residential real estate, including amenity offerings. In its latest “Multifamily Amenities 2021,” Multifamily Design+Construction reviews the 131 top amenities as evaluated by owners and construction and design professionals.
The majority (53.5%) made no amenity changes due to COVID-19. However, nearly a third of respondents did modify amenities because of the pandemic. Roughly 15% added new amenities, while more than 10% removed amenities due to COVID-19. Among the changes included HVAC upgrades, building material and fixture choices, adding balconies and work-from-home spaces.
Amenities were categorized by functionality—outdoor, indoor, recreational, technology, etc. The top outdoor amenity remained fire pit/grill, edging out lounge area (66.1% vs. 64%). Lounge area topped the list in 2019. But it’s the 2017 leader, outside unit storage, that has seen a plunge from 62.4% to 44.2% in 2021. Covered parking, outdoor pool and cabanas were also among the top outdoor features.
The top indoor amenity was far and away in-unit washer/dryer at 80%. Lounge was second this year at 68.6%, followed by coffee bar/café at 57.5%. Community kitchen sank more than 12% to 50.3% from 2019 to 2021.
Billiards/pool was the No. 1 recreation amenity in 2021 at 46.5%, ahead of jogging/walking path at 40.9%. The top recreation amenity from 2017, game room/arcade/simulator, fell sharply from 51.6% to 35.8% in 2021.
Bicycle storage (69%) ranked at the top of the convenience services list, only slightly above package delivery (63.6%). Electric vehicle charging was third at 52.1%. Transit access and ridesharing services were also among the top services.
The quality of life amenities list had meeting room/party room as the top feature at 60.3%. Just behind was fitness/Pilates/yoga studio at 59.1%. Recycling service was also among the top vote-getters. Further down the list were spa/health club/sauna and education/lecture program.
Business and technology services were led by conference room at 55.2% Business center was a close second at 52.7%. One surprise finding was free Wi-Fi declining from 59.8% in 2017 to 51.4% in 2019 and 43.6% in 2021. In contrast, paid Wi-Fi increased from 19% in 2019 to 27.1% in 2021.
The top children’s service was playground, more than three time the number of responses as playroom (82% vs. 24.6%). Dogs were king in the top pet services. Dog park was on top of the list at 76.9%, while dog washing station was at 63.1%. Meanwhile, keyless entry topped the security services list at 71%, ahead of video surveillance at 66.8%.
Driven by a variety of factors, a new report finds the onslaught of packages continues.
Online marketplaces have benefited from the change in consumer spending because of the COVID-19 pandemic. Online retailers and traditional brick-and-mortar stores have transitioned to shopping experiences that meet consumers’ needs. This has been seen in communities, where package processing is up 50% compared to 2019, according to new data from automated locker provider Package Concierge.
“While last year’s package numbers were sky high being in the middle of the pandemic, we’ve seen these trends remain at levels traditionally only experienced during the holiday shopping season, even in light of the optimism around declining case numbers and the vaccine earlier this year,” said Donna Logback, Marketing Director for Package Concierge, in a release. “The data is crystal clear: Properties who have already made an automated package management solution part of their amenities have been at a huge advantage over the past two years – and that's a trend that will continue well into the foreseeable future.”
Back-to-school shopping has also played a role in the heightened online shopping volume. The “Annual Total Package Report” reveals transaction volume was up 7% this back-to-school shopping season, and volume was ahead of 2019 by 35%.
Communities with automated solutions managed 68% more packages in the second quarter of 2021 compared to Q2 2019.
“The onslaught of packages that we’ve seen across our portfolio of properties over the last few years is tremendous,” said Keith Gillan, President of property management company Murn Management, in the release. “Last year our properties saw over a 165 percent increase in the number of packages they were processing each day.”
New research reveals rents continue to increase, leaving only a handful of markets with rents lower than they were pre-pandemic.
Rents across the U.S. have pulled back slightly; however, they are still increasing dramatically since the start of 2021. The September Apartment National Rent Report from Apartment List shows the index increased 2.1% from July to August compared to 2.5% the previous month.
The national median rent has jumped 13.8% since January 2021. The average rent increase between January and August was 3.6% between 2017-2019.
Only a handful of locations have rents lower now than they were pre-pandemic. For example, San Francisco rents are 12% lower than in March 2020. However, since January 2021, prices have increased 20%. Rent growth has covered pre-pandemic averages in 98 of the country’s 100 largest cities. Since March 2020, Oakland is tied with neighboring San Francisco with a 12% decline in rent prices. Minneapolis, San Jose, Calif., and Washington, D.C., are also among the cities with declines.
Prices increased nearly 6% in New York City from July to August—the fastest rate in the U.S. Median rent prices in New York are at $2,052, marking the first time they have surpassed $2,000 since March 2020. In Los Angeles, rent growth continued at the pace of 2.5% from month to month, putting the median rent price at $1,874.
Meanwhile, mid-sized markets, especially in the West, have seen a boom in pricing. Boise, Idaho, has a positive rent growth of 39% since March 2020. Spokane, Wash., has closed the gap with Boise. Prices rose 2.1% in Spokane from July to August, while Boise rents climbed 0.8%. Arizona saw four cities make the top 10 list, and Florida had two.
Affordable housing provider Envolve provides lunches, hosts back-to-school event.
Affordable property owner and manager Envolve LLC continues its philanthropic work in its local communities. During the course of the past several weeks, the company has partnered with local businesses at events to give back to residents.
On July 24, Desert Winds Apartments in Jacksonville, Fla., held a back-to-school celebration event. Vendors provided residents with back-to-school essentials. “We were so grateful for such a high level of vendor participation and the donations we received,” said Willie Conn, Senior Community Manager of Desert Winds, in a release. “Our residents had the opportunity to pick up free backpacks, school supplies, clothing, diapers, and more!”
Only a few days early, Envolve purchased lunches for residents of Maple Place in North Little Rock, Ark. “The pandemic certainly hasn’t been kind to small businesses,” said Sharon Carpenter, SVP of Operations for Envolve Client Services Group, in a release. “That’s one of the main reasons why we founded the Envolve Resident Lunch Program. It’s our way of supporting local and family-owned eateries while treating our wonderful residents to lunch at the same time.” Lunches for Maple Place residents were provided by Forever Yours Catering, and hundreds of masks were donated.
Meanwhile, in Lakeland, Fla., residents of Lakewood Terrace were provided lunches from locally owned Philly Steak & Wings on June 24. “Local restaurants took a significant financial hit during the height of the pandemic, so we take care to only purchase from small or family-owned businesses for our Resident Lunch Program,” said Andrea Jordan, SVP, Human Resources for Envolve Communities, in a release. “We love being able to give back to our local economy while simultaneously treating our valued residents to lunch. It’s a win-win!”