News & Research Listing
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!”
New York City overtakes San Francisco as the most expensive rental market.
New York City is officially the most expensive market in the U.S. For the first time since Zumper began tracking rental data, New York City surpassed San Francisco as the most expensive market for median one-bedroom rentals.
Zumper’s national rent index reports the median price of one-bedrooms in the U.S. has increased 9.2% since the second quarter of 2020. Meanwhile, two-bedrooms are up 11% during that time.
The median rent for one-bedrooms in New York City is $2,810, only $10 more than San Francisco. Boston is at $2,300, while San Jose, Calif., is at $2,200. Median rent for one-bedrooms in Washington, D.C., are at $2,160. Four other California markets were in the top 10—Los Angeles, Oakland, San Diego and Santa Ana.
The flip of the top two markets was called “unthinkable” by Zumper as prices in San Francisco were more than $800 higher than in New York in early 2019. By January 2020, the gap had decreased to $520, and during the course of the next year during the pandemic, rents continued to decline. The narrative has since changed with rent prices climbing across the country.
Since January 2021, rents have increased nearly 20% in New York and are only down 1.4% since March 2020. However, San Francisco has not seen this renaissance. Rent prices are only up 4.5% since January and down 20% compared to when the pandemic began in the U.S. Much of this is due to the nature of employment in the Bay Area, where large technology companies have given workers the go-ahead to continue working remotely.
Concessions and rent cuts, a vast majority of which were found at new buildings that were leasing-up during the pandemic, are quickly evaporating.
During the pandemic, desperate apartment managers offered as much as three months of free rent to lure renters to new, luxury towers in downtowns largely shut down by the coronavirus pandemic. That includes some of the most expensive apartment markets in the U.S., like New York City and San Francisco.
Those special offers of free rents are rapidly disappearing as businesses reopen and downtowns begin to revive after the pandemic.
“Concessions now are roughly half of what they were during the height of the pandemic,” according to Andrew Zola, Commercial Real Estate Analyst with CoStar Advisory Services.
The offers of free rent were much more modest throughout the rest of the U.S. – even at new apartment buildings that needed to fill hundreds of new units. That’s partly because property managers in the rest of the U.S. faced fewer challenges. But managers in fast growing areas like the Sun Belt have also learned other ways to lure prospective renters to sign leases – without always having to offer months of free rent.
“Property managers have gotten more sophisticated,” says Greg Willett, Chief Economist for RealPage, Inc., headquartered in Richardson, Texas.
Property managers cut rents nationwide during the pandemic
In the first months of the pandemic, much of the U.S. economy ground to a halt to slow the spread the coronavirus. The number of prospective renters shopping for apartments sharply declined. To get the attention of the few people still interested in signing new leases, property managers cut asking rents 3.4% year-over-year in Q1 2021, according to data from Reis, Inc. Effective rents (which include concessions) were also down 3.4%.
Those are “record declines for this property type, which has never displayed much volatility in rent growth at the national level,” says Victor Canalog, Chief Economist and Senior Vice President for Reis, Inc., headquartered in New York City.
Property managers offered the vast majority of these rent cuts and concessions at new buildings that were leasing-up during the pandemic.
The property managers of these new communities had to adapt to a sudden drop in the number of people signing leases. “Demand generally cooled to between 10 and 15 units leased per month,” says Willett. That’s roughly half of the typical lease-up rate before the pandemic. Demand for apartments had largely returned by June 2021. “Monthly lease-up rates now are typically back to 25 to 30 units a month in most places.”
“Rent discounts emerged largely across the board for those properties, with giveaways usually reaching at least a month of free rent,” says Willett.
Central business districts emptied out
Property managers offered the deepest rent cuts and concessions to fill new apartments in the most expensive, most damaged downtown markets like Manhattan and San Francisco.
“During the onset of the pandemic, there was an exodus of renters moving out of expensive and dense downtowns to the suburbs,” according to Jessica Morin, Senior Director of Market Analytics at Apartments.com.
The amount of free rent on offer varied widely, but three months or even four months was not unheard of.
In early summer 2020, nearly half (43%) of the available apartments in urban core neighborhoods offered some kind of rent giveaway, according to RealPage. Measured by properties, more than half (60%) of downtown apartment communities offered free rent for a least some of their apartments in November 2020, according to Apartments.com. In comparison, less than a third (30%) of suburban apartment properties offered free rent.
These downtown apartment markets have already begun to recover – though free rent is still common and rents are still low.
“With the increase in vaccinations, we have seen renters returning to downtowns, lured by the reopening of walkable amenities and those generous concession packages,” Morin says.
Effective rents (including concessions) for new leases in these downtown neighborhoods were down by an average of about 15% in June 2021 compared to rates in early 2020. Given these are expensive locations, with average rents of roughly $3,000 a month, that’s a typical drop of about $450, according to RealPage.
“The typical discount is around 10%, or a little more than five weeks of free rent, but it’s not unusual to see discounts equaling two months or more of free rent,” says Willett.
These downtowns are very small geographic areas that are inside or very close to the central business district of a city. Developers opened nearly a third of their new apartments in these very small, downtown submarkets in recent years, and the stress had already begun to show even before the pandemic, according to economists. In the year before the pandemic, apartment rents were already growing more quickly in suburban areas (which include the rest of the metro area outside of these small downtowns), according to RealPage.
These downtowns had been highly desirable places to live before the pandemic, close to jobs and entertainment. The percentage of apartments in these gateway metro urban cores that were occupied before the pandemic was an average 95.9%, despite all of the new units opened by developers, according to RealPage.
That’s higher than average occupancy rate overall of the U.S. by close to a percentage point.
Downtown apartments located in leading, gateway metro areas also benefited from very strong job growth. During the decade before the pandemic, the San Francisco metro area produce more than three jobs for every housing unit developers were able to build. The New York/Newark/ Jersey City metro area produces more than two jobs for every housing unit, according to the Manhattan Institute.
During the pandemic, many of those workers could work remotely while living in a less expensive part of the metro area or even a different city altogether. “Working from home made larger units more attractive, providing a push for renters to move away from small units in deeply urbanized areas,” says CoStar’s Zola.
Average occupancy in gateway metro urban cores was down to an average of 92.5% in June 2021, according to RealPage.
“Progress will occur over the next year or so, but it’s going to take a while to get occupancy rates back to normal, given the size of the hole created over the past year,” says Willett. He predicts that the average occupancy rate in gateway metro urban cores won’t climb back to roughly 96% until the middle of 2023.
“Work from home will likely continue to some extent, and this will likely cause elevated vacancies to persist, causing owners in these metros to continue offering concessions,” says Zola.
Older apartments didn’t need to offer free rent
Across the U.S., new, luxury apartment properties were generally the only ones that needed to offer rent concessions.
“In turn, newer buildings with higher rents had more trouble leasing-up than more affordable units,” says Zola.
In contrast, many stabilized apartment buildings were fully occupied by residents, even in the worst days of the pandemic. In first quarter of 2021, even with thousands of new cases of coronavirus being diagnosed every day across the U.S., 94.7 %of U.S. apartments were still occupied, according to Reis.
Property managers at stabilized properties did not have to offer much to rent the few apartments that became available from turnover. Only 16% of the apartments available at stabilized properties offered free rent, even in May and June 2020, in the early months of the pandemic. That share is inching down now, falling to about 12% in May 2021, according to RealPage.
Property managers often did not have to offer free rent at all if their properties were stabilized in places with strong job growth and very little new apartment construction. For example, in the smaller cities of Riverside and Sacramento, Calif., Virginia Beach, Va., and West Palm Beach, Fla., property managers only offered concessions at a handful of apartments in May 2020, says Willett.
Less free rent thanks to revenue management systems
Property managers were much more likely to offer concessions during the recession of 2008 and 2009, when free rent was offered on as much as 55% of the available apartments, according to RealPage. That’s three times the share of apartments that offered free rent across the U.S. during the pandemic.
“There’s some strong evidence that rent giveaways don’t play nearly the role they did previously,” says Willett. “Adoption of revenue management systems absolutely has played a role in that shift.”
Revenue management software systems suggest the amount of rent that managers should ask for each apartment based on the features of the apartment and the latest available market data. These systems typically lower monthly rents for the life of the lease, rather than offering months of “free rent.”
“Use of revenue management systems is much more common today than in 2008-2009. Those systems generally will trim rents with a scalpel, rather than a machete,” says Willett.
Leasing agents in the Sun Belt were used to competition
There is another reason why property managers in once-hot, downtown apartment markets had to offer more free rent to fill their new, empty apartments. They hadn’t as much practice dealing with competition from other new apartment communities.
With more land available to build, leasing agents in the Sun Belt are already used to selling apartments to renters who many other communities to choose from. “Lots of construction in those markets leads to competitive leasing environments virtually all the time,” says Willett. “It’s become normal to approach demand generation from multiple angles in the Sun Belt.”
These managers may spend more on promotion overall and direct their staff to spend more time following up with potential renters. They may also customize marketing plans for individual properties or even particular floorplans to concentrate on attractive features that may not be getting the attention they deserve from potential renters.
These may seem like obvious tactics, but in many gateway markets before the pandemic, leasing agents had not needed to worry. The percentage of apartments occupied before the pandemic tended to be a few percentage points higher and the balance of power was tilted toward owners.
“They just don’t have as much experience scrambling to attract renters,” says Willett. “In the gateway markets that suffered the biggest difficulties in 2020—those are the locations where property operators tend to be overly reliant on price cuts to support leasing activity.”
Bendix Anderson is a freelance writer.
Next stop, the U.S. Supreme Court.
Last week, U.S. District Judge Dabney Friedrich from the District of Columbia ruled against a case led by the Alabama Association of Realtors, leaving the new U.S. Centers for Disease Control and Prevention (CDC) eviction order issued on August 3, 2021 in effect. The Realtors swiftly appealed the case and on August 20, the U.S. District Court of Appeals for the District of Columbia upheld Judge Friedrich’s decision.
The National Apartment Association (NAA) is extremely disappointed in this ruling as we have long recognized the CDC’s eviction order as unlawful and overreaching. NAA remains an aggressive advocate against extension of existing or creation of new eviction moratoriums and continues relentless efforts to preserve the nation’s housing infrastructure. Ultimately, eviction moratoriums are irresponsible and unfunded government mandates that leave renters with insurmountable debt and rental housing providers to unfairly hold the bag. Housing affordability remains, and always has been, collateral damage for these policies.
The Realtors are largely expected to appeal this to the U.S. Supreme Court. The nation’s highest court, which does return for their next session until October 4, 2021, the day after the CDC’s eviction order is scheduled to expire, could still pick up this case outside of session.
NAA will continue to provide updates as they become available. In addition, we remain committed to robust advocacy against eviction moratoria as we continue ongoing discussions with policymakers and top-tier media outlets to ensure that the voices of the rental housing community are heard and valued. Current member guidance on the present CDC order is available here.
Further, NAA continues its newest lawsuit seeking more than $26 billion in damages for rental housing providers harmed by the CDC’s order.
Camden requires vaccine for employees, according to the Houston Chronicle.
Houston-based owner/operator Camden is requiring all employees to be fully vaccinated against COVID-19. According to the Houston Chronicle’s article, “Commercial real estate firm Camden requires COVID vaccines for employees,” Camden told employees they have until Oct. 11 to be fully vaccinated.
The move follows other companies such as United Airlines and Google to mandate the vaccine for their workforces.
“We just decided to take a stand as a company and hope that other companies do as well,” said Camden CEO Ric Campo in the article. “The only way to get control of this pandemic and to stop the fourth, fifth or even sixth wave is to draw a line in the sand, and say you have a choice to get vaccinated or you have to go work someplace else.”
However, there will be exceptions based on religious and disability situations. The exempt employees will have to wear masks, be tested weekly and reapply for their exemption every 90 days, states the Chronicle.
Camden has 1,700 employees, including 500 in Houston. The company owns and operates over 165 communities and more than 59,000 apartment homes.
Read the Houston Chronicle article here.
NAA President and CEO debunks apartment renting myths in his latest Washington Post column.
Renting an apartment is not a “backup option,” and renters are outpacing homebuyers nearly two and a half to one. In his latest article with the Washington Post, “Five myths about apartment renting,” National Apartment Association President and CEO Bob Pinnegar separates fact from fiction.
Pinnegar says renting is not throwing money away, but is in fact a benefit—being able to move when needed and not losing money on a home or needing to wait to sell a home.
Another myth involves the cost of rent, and owners operate on high margins. Pinnegar says only 10 cents of every dollar is considered profit, while the other 90% goes toward the property, payroll and other operating expenses.
Renting doesn’t always mean less space and variety. Communities offer different floorplans as well as unique amenities and technology options. “Choice and customization are hallmarks of the industry — it’s all about finding the right fit for you,” says Pinnegar.
Pinnegar cites data from the Census Bureau that renters increased by 16.4 million between 2008 and 2018. Meanwhile, homeowners only increased by 6.8 million. Renting has become “an intentional lifestyle choice,” he says. Younger generations are looking for more flexibility and maintenance-free living. The American Dream is not necessarily owning a home—it’s “the freedom to invest in and create your own path.”
Read the Washington Post article here.
Three ideas for bringing TikTok into your social media marketing mix.
“Weapon” might sound a little medieval for multifamily, but when you look at the power of TikTok and the impact it can have on lead generation, it feels like an appropriate descriptor.
Before we jump in, if your target renter is above the age of 40, then you likely don’t need to worry about learning and using TikTok for your apartment marketing. Sixty percent of TikTok users are between the ages 16 and 24 and 26% are ages 25 through 44.
So, if your target renter is a Gen Z or a Millennial on the younger side, then your apartment needs to be on TikTok (even more so if your direct competitors aren’t yet).
The platform is video only, so it definitely takes some time and effort to make content for your apartment, but it’s well worth it. As the current most popular app, many young adults are using TikTok to find apartments. Plus, unlike Facebook, Twitter, and Instagram, TikTok users watch videos with the sound ON. This means your message will actually be heard and you don’t only have to rely on visuals.
Here are three ways to utilize TikTok for your apartment marketing:
1. Make original content in bulk.
Publishing consistent original content seems much less daunting when you create it in bulk. Try to set aside a few hours one day each week to create multiple videos.
The great thing about TikTok is it’s all about trends. There’s nothing wrong with starting out your TikTok journey by simply recreating videos that have been turned into trends. To start, simply create an account for your apartment and begin scrolling through videos to get ideas. Over time, the algorithm will learn what kind of content you’re looking for and then you won’t have to scroll for long. I recommend also following real estate and lifestyle accounts that catch your eye.
As you get more used to the app, you’ll begin to feel more comfortable with executing your own ideas.
Here are a few that are easy ones you can do without much outside help:
- Video tour highlighting apartment features
- Video tour of each amenity
- Recap of a resident event
- Putting together a resident giveaway
- Answer the top 10 FAQs about your community
- Friday Fluff: Record a video of the dog of the week
If you can, try to get your whole staff involved with generating ideas. It’s likely a few use TikTok in their personal time and are familiar with the platform and what’s popular. Some may even jump at the opportunity to be creative and make TikTok videos for the property (an offer you should definitely take them up on).
2. Do a resident takeover.
A resident takeover is when you give a trusted resident the login to your property’s TikTok and allow them to create/post videos for a day or even a week! This is a great way to add personality and authenticity to your account.
It’s likely you don’t know which residents use TikTok or their accounts. An easy way to initiate a resident takeover is to send out a simple email and/or social post explaining the goal and offering some sort of prize such as a gift card or gift basket. If you really want to stir up interest and have the budget to do so, offering something like a percentage off the following month’s rent can really draw your residents in; you may even get multiple interested parties and you can do a different resident takeover each month.
Make sure to confirm that the chosen resident has some knowledge of TikTok and can put together a high-quality video. If you’re offering a high-value prize, it is more than understandable for you to ask them to submit a video example.
3. Sponsor an influencer.
This idea is more geared toward properties that have bigger budgets or have extra room in their current one. That being said, if your current paid media and other marketing efforts aren’t pulling in leads, you might want to put a few months into giving this strategy a shot!
The difference between doing a resident takeover and sponsoring an influencer is direct creative control. Since this is just like a job, you can tell the influencer exactly what kind of videos you want them to make, what you want them to say, what you want them to do and so on. This won’t create the same “down-to-Earth” feel as a resident takeover but it will allow you to showcase your property in the best light possible.
While it’d be incredible if you had a TikTok user living at your apartment, it’s not necessary to engage in sponsorships. Once you find one that is local or close enough to drive, you can host them for a day or even for a few hours. The great thing about sponsorships is that they’re incredibly flexible and all based on what you and the influencer agree on.
Get Leads Out of TikTok
However you decide to use TikTok, make sure that from your profile a user can easily access your apartment website and book a tour. As fun and creative as TikTok is, the main goal is to drive leads.
That said, never underestimate how many new leads a silly, funny video of a cat watching chicken spin around in the microwave can generate for your property. If one video generates just one lead, it’s worth it.
Ashley Tyndall is Chief Relationship Officer at Criterion.B
Bennett was a longtime supporter of the rental housing industry and a highly involved member of the National Apartment Association.
It is with a heavy heart that we share the news of the passing of Malcolm Bennett on July 21, 2021. He was a longtime supporter of the rental housing industry and a highly involved member of the National Apartment Association.
NAA’s 2014 Advocacy365 Advocate of the Year, Bennett served on NAA’s Board of Directors, including a seven-year term as Region X (California) Regional Vice President from 2010 to 2017. He held positions on the Independent Rental Owners Committee, Governance Committee, Legislative Committee, Nominating Committee and served as a Delegate for NAA’s Assembly of Delegates.
Most recently, he Chaired the Property Management Forum for the National Association of Realtors, served on several committees for the California Association of Realtors, and was 2020 President of the Apartment Association, California Southern Cities.
A licensed broker and contractor, Bennett’s more than four-decade long career in the rental housing industry included the creation of his real estate firm, International Realty & Investments, based in Long Beach, Calif., which provided management, sales and acquisitions of income-producing properties.
He was highly active with his local apartment associations and the greater real estate community, including serving two terms as President of the Los Angeles County Board of Realtors. He was also appointed to the Los Angeles County Tax Appeals Board, serving as both a member and as President.
Bennett was one of the founders of the Minority Apartment Owners Association (MAOA), created in 1987 to assist minority property owners navigate California’s complicated and litigious business environment and contend with the increasing cost of operating housing. While MAOA’s original mission was to advocate for rental housing owners and operators in predominately rent controlled areas, over the years, it broadened to include all rental properties throughout Los Angeles and surrounding areas.
As President of MAOA, he was always willing to travel throughout the state to speak out against public policy that was harmful to the industry. In 2014, Bennett was honored with the Lifetime Achievement Award from the Black Business Association for the work he had done on behalf of the real estate industry and his history of volunteer service with a variety of real estate organizations.
Bennett also was closely involved in property management for the many apartments owned by Los Angeles’ historically Black churches. Those who knew him best pointed to his successful management as being a function of treating residents like family. If a resident fell behind on rent, he would work with them to identify ways to repay the debt, including doing different jobs onsite until they could get back on their feet.
His community involvement also included two four-year terms on the Board of Directors for the South-Central Regional Center for the Disabled and two terms as President for the Crippled Children Society.
Nationally, Bennett served as an expert witness for several Congressional committees and was inducted into the Congressional Hall of Records for outstanding community service in 1994.
If you would like to share your stories and memories, please send them to [email protected].
Apartment Guide dives into the most popular words in apartment community names.
The average name of an apartment community has under two and a half words. Apartment Guide reviewed communities listed on their website and found “park” was the most common word in a communities’ name. “Park” appeared on more than 5,300 listings. However, “apartments” appeared nearly 30,000 times, roughly 30% of the entire market.
“Village,” “Place,” “Creek” and “Manor” followed to complete the top five. “Village” came in about 4,800 times, while “Place” appeared 3,160 times. “Homes” was the only other word to appear in at least 2,000 listings.
“Ridge,” “townhomes,” “court,” and “gardens” closed out the top 10 words. “Square,” “senior,” and “pointe” were also among the words with more than 1,000 appearances. Among the less frequently featured words were “whispering” at 129 occurrences and “Tuscany” at 86 appearances.
There are, on average, 15.4 letters in a community name.
Exceptional resident experience is a must for rental housing providers.
The cost of losing a resident is a great one that takes more than a year and a half to recover financially. “The State of Resident Experience Management Report” from property technology firm Zego (Powered by PayLease) dives into resident experience and how operators can improve their residents’ experiences while living at the community.
The report defines resident experience management as, “The concept of improving all resident touchpoints and creating a remarkable community living experience.” For obvious reasons, resident experience is directly correlated to reputation and occupancy rates. Nearly 80% of apartment hunters did not visit a community because of unfavorable ratings and reviews. Meanwhile, 85% of residents said reviews influenced their decision to live at their current apartment.
Improving resident experience can lead to higher occupancy, which in turn, results in fewer and lower turnover costs. The average cost of a resident turnover is $3,850, which includes repairs, concessions, marketing and lost rent. It takes 19 months to recover the cost of the lost resident.
Zego partnered with research firm Strategy Analytics to breakdown resident experience management. Of note, the industry average retention rate is 58%, but the top quarter are performing at 65%.
One of the key takeaways from the report is that modern living environments are directly related to resident experience management. According to the Strategy Analytics survey, 40% of respondents said providing residents with a modern living experience is part of resident experience management. Providing residents with a great living experience and managing maintenance requests were tied for second at 35%.
There are seven recommendations given for a top-notch resident experience.
- Seamless move-in experience
- Up-to-date and attractive community
- Vibrant community
- Responsive management and enhanced communication
- Improve maintenance services and response times
- Poll residents
- Actively manage the renewal process