May 28, 2021 |
Updated May 28, 2021
Resident retention levels are back to what can be considered normal. During the initial stages of the pandemic, resident retention was quite high, reaching 58.4% in April 2020, according to data from RealPage. Resident retention at lease expiration was 53.7% for the first quarter of 2021—similar to levels during Q1 of 2018-2020. At its lowest point, the retention rate fell to 51.1% in December 2020.
“As 2020 progressed, renter needs evolved, and many properties began to experience more resident churn,” writes Greg Willett, RealPage Chief Economist, in an April 2021 article. “Among the renters working from home, some households opted to move to other neighborhoods or even other metros, taking advantage of the opportunity to save money. In other cases, some households jumped on the chance to upgrade to larger or better-quality apartments, once pricing slipped among a block of the more upscale properties.”
Class A communities saw the largest turnover rate of 47.6% in the first quarter of 2021, while Class B communities more aligned with the overall rate at 53.4%. Class C communities typically experience the least amount of turnover, which was true again with retention at 61.9%.
At a more local level, larger, coastal metros experienced the least amount of resident retention when comparing Q1 2021 to the combined first quarters of 2018-2020. San Francisco and nearby San Jose were each down more than 11% when comparing the two time periods. Seattle, Los Angeles and New York were in the 6% to 7%-range. Meanwhile, Detroit and Riverside/San Bernardino, Calif., saw the best resident retention improvements in the 8% range. Sacramento, Calif., was 6% higher in Q1 2021 in contrast to the three-year window.
Keeping residents in their homes
Keeping residents safe and secure is a top priority of the rental housing industry, especially during trying times like the COVID-19 pandemic. “From our standpoint, one of the things that we really felt like we did well through this, and are still doing, is leading with empathy,” says Kelly Greer, Director of Marketing with BH Companies.
At first, resources were added to help residents set-up payment plans, removing some fees as well as other barriers. This includes assisting residents with different programs—teams working directly with their residents for these opportunities.
“It is much easier to retain residents than it is to acquire new ones, so we want to make sure we are going above and beyond to satisfy our customers all the time, and we think that a renter will become a long-term resident when we do our job well,” Greer says.
At the onset of the pandemic, residents and communities experienced a strained ability to connect, especially with social distancing protocols. In response, operators have been creative with amenities, common areas and programing to allow residents to have the feel of a community again. “We’re always looking for ways we can enhance the resident experience and help them engage more within their communities,” Greer says. “What are the other things we can do to bring our residents together and offer them the opportunity for a well-rounded community feeling and living experience?”
BH Companies partnered with Valet Living during the past year to bring Torch, an offering of virtual fitness and lifestyle events, to communities—a way to bring people together without having to be in the same room. In a sense, this type of lifestyle programming has replaced traditional resident events. “Torch can be a turnkey solution for resident events,” Greer says. The on-demand virtual fitness classes give residents a solution to engage with others and take advantage of an amenity on their own time. Rather than attending an in-person, scheduled event such as a pool party, residents can connect in a way that best fits their schedules and adhere to safety measures like social distancing.
Michael Miller is NAA’s Managing Editor. He can be reached at [email protected].