ResMan’s President Elizabeth Francisco sits down with Jason Simon, Director of Government Affairs at the Apartment Association of Greater Dallas (AAGD) to discuss NAA’s Advocate where several members head to Capitol Hill to speak with legislators about pressing issues in the rental housing industry. Hear about the main legislative issues associations are focusing on, how you can get involved at Advocate as well as advice for first timers and those looking to be more involved overall in the rental housing industry.
To learn more about ResMan’s product, book a demo with us.
Follow along here:
Elizabeth Francisco: [00:00:00] Hello everyone. And thank you for joining PropTalk, a property management podcast, powered by ResMan. I’m Elizabeth Francisco, the President here at ResMan and I’m your host for today’s episode: Advocacy and Government Affairs: Shouldn’t We be in Every Conversation about Rental Housing? Today, I am happy to welcome Jason Simon Director of Government Affairs at the Apartment Association of Greater Dallas (AAGD). Thank you for joining us.
Jason Simon: Thank you for having me really honored to be here today.
Elizabeth Francisco: Thank you. And I know your time is valuable, especially the time of year we’re in and we’re getting ready for Advocate so I really appreciate you taking the time to do this.
Jason Simon: This is really important stuff. So really appreciate the opportunity I look forward to it.
Elizabeth Francisco: And I’m going to tell you guys in advance because we’ve already talked. That we make this really exciting stuff because it is. Buckle your seat belts because we’re going to get through some important issues facing our industry. We’re going to talk about what we can and should be doing about it, and you’re going to enjoy the conversation along the way.
Alrighty, so as I said, super thrilled that you agreed to join us. This is an important conversation because we are fast approaching Advocate that takes place up in DC. So I don’t think our conversations could be better well timed. I want to take a step back and talk about why we’re doing this podcast and why it’s so personal to me. For our audience, hopefully you’ve heard before, but I came up through the ranks in the industry. I started as a leasing agent and I worked my way up. Eventually as we embarked on taking ResMan to the market, that’s when I started to become more familiarized with what was just Capitol Hill Day back then. I’d heard the word PAC, but honestly, I was not as engaged as I could have been or should have been for a majority of my career. Now that I have so much more appreciation for all the efforts and everything that everybody does on behalf of the industry, including our members, but our non-members [00:02:00] because they benefit, as well.
That’s really where my eyes started opening up and I’ve wanted to think about what could have been done different in my own career that would have helped me get involved sooner or maybe provided better education. Were there any fears and anxieties I had about getting involved? There probably were some. But this is important and, especially for us at ResMan, we’re not just here to sell to the industry. We’re part of the industry. So understanding the issues that are facing us all is important for us as well. So this podcast, isn’t just for the members, it’s also for all our supplier partners out there because we’re all in this together. It’s a really important conversation for me from that perspective.
Jason Simon: Thanks for sharing that. I think it’s really important. Just like you said, it’s a great point of benefits. This benefits you, whether you’re a member of an association, not a member of an association, this is across the industry.
Elizabeth Francisco: Yeah it’s important and you have some good commentary that you’re gonna provide today.
So I know when we were talking about getting ready for this conversation one of the other things that you and I discussed was our engagement with the NMHC Rent Tracker Project. I had a lot of familiarity with the space, but then I also became even more aware of some of the challenges we face as an industry from the general public because of that engagement. Because one of the early concerns from the pandemic was legitimately people might not be able to pay their rent and how’s that gonna impact our industry?
But then there was also this bubbling up happening about rent strike groups and how vocal they were being and were they going to impact our renters and our units to not pay rent? Those that could and were obligated and should pay rent. I even went so far as joining a couple of Facebook groups (laughter) that had very strong opinions about landlords and was collecting rent. Yes, it was very eyeopening to me. I think in reality, that was my big wake up call, not just about how important what you guys do and everything that goes on in the industry, but that was my first glimpse from the outside looking in as far as the other side and the general public’s perception of our industry and the people in it. Their lack of understanding about how [00:04:00] business works and how much goes into running an apartment community and what that’s all about.
So as I think about it educating myself on our issues and understanding to how to have those conversations is something that is a little bit daunting. I understand the need for us to get real about affordable housing. When you’re in those groups, you can easily see, yes, there’s real people in real need that may not and cannot meet their rental obligations, obviously through the pandemic.
Some of it is no fault of their own. Maybe everyone didn’t get to take full advantage of that. And maybe there’s still things that need to be done. But now we have a lot of issues contributing to the affordable housing issue in America. Supply and demand is a basic premise for this.
Jason Simon: It’s a lot of what drives it.
Elizabeth Francisco: Yeah. That’s where I want to take our conversation too, which I know is a big deep part of the conversation right off the bat.
Jason Simon: Start off with the easy question.
Elizabeth Francisco: We get that one out of the way. But I think it’s important because how do we get involved? How do we help shape the conversation? How do we help legislators? So one of the things that I learned from being in the Facebook groups, which by the way makes you bite your tongue a lot, big time is just thinking about how many of those people in those organizations and people that are seeing those social posts or being vocal with their representatives.
And I could see how they wouldn’t really have a balanced perception or even real understanding about what that’s like. So I think my first question for us to talk about today is what does advocating for legislation that we believe will help overcome affordable housing, what does it look like? Let’s talk through some of those issues. And maybe even think about how do we overcome some of these perceptions?
Jason Simon: Yeah. That’s a lot to think about and talk about, but these are really all very important points. And those rent strike groups, those tenant advocate groups, those advocacy groups on the other side are really everywhere. There’s national groups, there are state groups, there’s local groups, there’s big groups here in Dallas, there’s Dallas eviction groups that are super active.
[00:06:00] And they’re looking at some pretty extreme policies in terms of rent control and eviction moratorium that would just extend the eviction process indefinitely, which really doesn’t solve the problem. We’ve got a lot of different forces pushing against us. And I would say that the affordability issue is pretty complicated. It’s got a lot to do with supply and demand. It’s got a lot to do with development. In this area in north Texas, we’re one of the hottest areas in the country in terms of number of apartments under construction, the demand, supply trying to come online and lots of pressures.
People are moving to Texas every day. I think I read somewhere where it’s like somebody moves to Texas every five minutes or something. It’s really incredible.
Elizabeth Francisco: I think we picked up last numbers… well over half a million people and that was data through like early parts of 2021, if I’m not mistaken.
Jason Simon: It’s really accelerated and it’s because we’ve got such a great place to do business. The economy is strong, no state income tax. There’s a lot of drivers. The regulatory climate is pretty, pretty low, it’s pretty friendly.
Elizabeth Francisco: Hopefully we have everyone from our front lines all the way up to our executives and even our investors and thinking about how they can get involved. There’s some high level talking points about what we can do about affordable housing. And I always hear it come back to being a little over simplified. It is about supply and demand. When you have an excess of supply, that’s going to impact demand and that impacts pricing. And so what are the biggest hurdles with supply? Coming out of the pandemic, I know we had slow downs. I know right now they’re saying we have 600,000 units is projected to come online in 2022. But there’s also a big survey that came out from a construction survey from NMHC that reflected over 93% of the people surveyed were having delays from what you’re balancing out for the deal and how the deal’s got to pencil out. And do you have to go back and get, raise more money, which hopefully you don’t or what are you cutting? So what are some of the hurdles?
Jason Simon: It’s a lot of that. It’s also, from our perspective at a local level, we’re seeing a lot of NIMBYism so “not in my backyard” pushback from the [00:08:00] community. “We don’t want those type of people, so to speak. We don’t want that type of housing, apartments increase traffic. They increased crime. They’re a burden on the local schools.” All of these things that you hear… a lot of them are myths. So we have to overcome perceptions from the community, but they’re particularly strong. They could be a very small group in a given city, but they are typically people who are longtime residents of the city that are very vocal. They’ll call their city council member. They’ll go down to the council and speak out against an apartment project. They will really work the council and some of these councils, even though they know their better judgment tells them we need to increase the supply of housing in order to keep up with demand, they’re getting so many resident pressures from the “not in my backyard” folks. We call them the CAVE people, citizens against virtually everything. So really, it’s knee-jerk opposition. There are some concerns that are real concerns from the community, but they’re getting such pushback that I do think it hampers development.
You’ve got people that are looking to do projects in some of our suburban cities surrounding Dallas that are just like, “We’re not going to do it in this area.” And it’s unfortunate because they’re building somewhere else when we really need it in north Texas.
Elizabeth Francisco: It’s interesting. So I live up in Salina and there’s a lot going on up there. But you know what there’s not a lot going on of?
Jason Simon: Apartments.
Elizabeth Francisco: Yes. It’s interesting, I was talking to the store manager of a McDonald’s up there in Salina, and not on the border between Salina and Prosper. And they have assigned job postings starting at $15 an hour, up to $20 an hour, you have 10 open positions. I actually took a picture of it because I plan on showing everyone I know that’s looking to build apartments because he looked really frazzled. So I just talked to him for a minute and he said that the biggest challenge they had was with gas prices and everything being what they are and the affordability, there’s no affordable housing in Salina, as much as it’s exploding right now. So they’re having to market to people that are further into Prosper or Frisco, but the gas prices are high enough by the time they make the commute, it’s not worth it. I don’t know when that’s going to change. So after that conversation, I was out driving around it and [00:10:00] there really isn’t any apartment supply in Salina. And it’s one of the fastest growing cities in the country right now.
Jason Simon: Yeah, true. But I do think that those local barriers to development are a big part of it. You look at all the studies, the NMHC study, the NAA study, local studies here in the DFW area and that’s one of the big contributors. And one of the things that we’ll talk about is for Advocate, going to Washington in a few weeks, one of the issues we’ll be advocating on is something called the “Yes In My Back Yard” Act, the YIMBY Act so there’s NIMBY and there’s YIMBY. But it would basically incentivize the local governments to drop some of these barriers to development, to increase that supply and kind of holds the local the cities and counties accountable for development because those are the real barriers at the local level. The federal government can only do so much. This YIMBY Act would help address some of it, but it really has to be addressed at the local level. Part of what we do with our advocacy efforts is education.
Elizabeth Francisco: How have you overcome this? Because we have in the past… This is decades ago, but it seems like Frankford and Midway area, there was a lot of pushback initially. I was in the late nineties when they were really bringing apartment communities into that area. We had the same issue.
Jason Simon: It takes a lot, it’s not something that happens overnight. It has to be a sustained campaign. And it’s really a lot of education. A lot of what I do on a daily basis is meet with elected officials, the people that are making decisions that impact our industry, and bringing our members to those meetings because our members are the experts. You guys are the experts on the industry on what it takes, how do you make something pencil out? What are the costs involved? What kind of policies are impacting our industry and then the kind of impact we have on the economy. I mean, in any given city, our members are some of the largest taxpayers to the city and what they pay in property taxes for their apartment buildings.
It’s a ton, it’s tens of millions of dollars per property, potentially in any given city. And when you sit down and tell that to a mayor or city council member, you see their eyes [00:12:00] get wide. They really hadn’t thought about it until we bring that information to them and talk about how much our industry contributes to their local economy.
Nationally, we’re a three, I think it’s like $3.6 trillion industry and that’s a heck of an impact.
Elizabeth Francisco: There’s a lot of people we employ, as well as, house.
Jason Simon: Of course. It’s having those conversations, though, with the policy makers and it’s not a one and done, you have to continue to advocate. Because we have a meeting and we’re presenting our information. As soon as we leave, they’ve got a meeting right behind us where they may have, John Q citizen saying, “No more apartments. I can’t have apartments.” So they’re constantly hearing from the other side and there’s a lot of pushback. So we’ve really got to do what we can to try to break through some of that. Then some cities are easier to work with than others, but some still have that mentality where it’s just “we don’t want apartments and we’re gonna fight it as long as we can.” And it really hurts the community. It hurts the economy. On that development issue, that’s something that we’re constantly battling.
Elizabeth Francisco: So two thoughts that came out of what you were just saying, one is: I would imagine that you keep saying education, which I completely agree, and I can only imagine how that conversation plays out when you are explaining to them how much we contribute to their city budgets. But I’m guessing that the average voter for that same representative doesn’t know that. I guess this is where it’s really us coming together as an industry to understand: how do we not just educate those that are sitting on the councils and our elected representatives? How do we help educate the general population about what apartment living is really? Especially because there’s a lot of, people that are retiring that are going into apartments by choice. So apartment living, I feel like sometimes there’s a misconception about what the environment is period. But that’s expensive.
Jason Simon: It is and a lot of this is is really public relations campaigns and really getting out there and educating the general public.
I saw commercial this week. A National Realtors Association commercial that was talking about the real estate industry, talking about how [00:14:00] realtors are helping disabled vets, coming into a home and a wheelchair couldn’t fit through the door and the realtor was trying to figure out ways to help this vet, but it showed that connection. I think if the apartment industry could show, whether it’s our onsite teams or our maintenance teams, that we’re really impacting people’s lives in a positive way to push back against that stereotype of the rich landlord, the monopoly money guy, that’s just sitting on bags of money. Because that’s the stereotype, is “we’re just looking to get rich and we don’t really care if we have to evict somebody, too bad, it’s just dollars and cents.” So we’re constantly pushing back on that, but I think it’s, I think we still come around to education. Whether educating the elected officials or we’re educating the citizens, any given community, we’ve gotta be reaching out and talking about our industry.
Elizabeth Francisco: Thinking about it in the apartment industry, being a former operator and property manager, there’s also a captured audience of people who actually like living in apartments or maybe they’re apartments by choice. We don’t really arm them with any education either. Who are they talking to at work or at home that are voters that they are own? Renters might be able to help us with this if we approached it. Maybe something at the local levels, we can start talking about those conversations or invite people in to come in and talk with our renters.
Jason Simon: I think it’s a great idea. I think it’s something where we’ve done to a limited degree in the past, but I think it’s something we’re constantly looking to improve, to inform those residents because you’re right, you do have renters by choice. You have people that live at it may live in an apartment community for 10 years or more. So the stereotype of a transient person that rents for a few months and then doesn’t really contribute to the community. I think that’s still the stereotype and it’s stuck in a lot of people’s heads where these city council members, these local governments can dismiss our industry sometimes because they think, “Look, people who live in apartments don’t really vote. They’re not fully committed to the community because they’re not out, they’re not homeowners. They’re just renters. So they’re not totally vested in the community.”
Elizabeth Francisco: They don’t understand renting in America today. Yeah, [00:16:00] exactly.
Jason Simon: Yeah. They don’t, they really don’t. So it still goes back to education and talking to them. Things have changed. It’s not just a bunch of college kids living in apartments, now. These apartments are beautiful product. Their monthly rent is more than my mortgage payment. You talk to them about these things and you start to see some of them nod their heads and say, “yeah, I guess you’re right.”
Elizabeth Francisco: Even in the affordable space where there’s new product that’s coming into the market that is part of affordable housing program.
Jason Simon: And we talk a lot about that with the affordable stuff. We talk about workforce housing and affordability, and where are your teachers going to live, where are your fire firefighters going to live, where are your police officer’s gonna live? If you’re a Dallas cop, it’s too expensive to live in Dallas… are you going somewhere else? You’d rather have a Dallas police officer living in Dallas.
Elizabeth Francisco: And it’s funny you say that because in my early career, I worked in a lot of Class A assets, new construction, lease ups, things like that. But I have to say my workforce housing communities were actually the best because they seem to be more loyal and they were more vested in their apartment communities. Several of them are self appointed community association managers, which we didn’t have. But they are self appointed. (laughter)
Jason Simon: Block captains. (laughter)
Elizabeth Francisco: But no, but it’s a good thing when people are invested.
And if I had anybody that’s ever worked with me before and I shout out the name, “Miss Hoops,” they know exactly who I’m talking about. (laughter)
But the other side of it, is there any other legislation that impacts the affordable housing that we should be aware of? It’s my perception is we have a push for continually increasing our fees and different types of regulation that impact people coming into the market or deals being able to pencil out. Is that an accurate statement?
Jason Simon: That’s a great statement, it’s absolutely true. We see, again, a lot of this comes from the local level or local apartment association. So we’re dealing with cities 80% of the time probably. And in what I do, and we see it over and over again, and it’s really prevalent in north Texas, for whatever reason. We’ve seen Bedford, we’ve seen Garland, we’ve seen Lewisville, we’ve seen [00:18:00] Denton… we’ve seen a lot of cities steadily increasing fees on apartments. Inspection fees, licensure, and all those things add to the cost of operations and are passed onto the residents in higher rents and year over year, rents are up as much as 20 to 25% in north Texas in any given city.
So you’re adding not only 20 to 25%, natural market supply and demand increase, you’re adding a new fee increase that’s being passed on. So again, it comes back to education. We’ve got the city of Lewisville that wants to dramatically increase their inspection fees on apartments, and they want to do it by the end of this month or early next month.
Elizabeth Francisco: What are they doing it from? What is it today?
Jason Simon: Today, the increase in Lewisville has to do with the way that they’re inspecting. So probably since they started their inspection program, they’ve inspected apartments by building, so if you just have a few buildings, it’s maybe one unit per building there. They’re changing that from per building to per door. So you can just extrapolate that out. We had one member that said, “My license fees on my line item is going to increase like 400%.” And that’s unsustainable.
Elizabeth Francisco: Oh, I remember. You just brought this back. When the city of Plano first initiated their inspection phase, they didn’t have it. And of course they rolled this out after our budgets were already complete. So we had several properties and I came out of the gates at I think $15 a door. In time, it was a lot and it wasn’t budgeted. Given that it was unbudgeted, in the great recession… things were tight to begin with. It doesn’t seem like a lot, but what does that do? Where could that money be going back into the property? Or if the property is not breaking even, every penny counts. I think they made up almost the majority of their budget deficit because of the number of apartment doors in the city of Plano. That was a real awakening for me to understand how that worked and we need to do our part to participate in the city, but then we also get hit with those property taxes.
Jason Simon: Yeah. It’s one thing after another. So that issue you’re talking about… it’s happening.
Elizabeth Francisco: And this is years ago. So I can only imagine what that’s like now.
Jason Simon: However long ago that was, we’re talking about the exact same thing basically [00:20:00] happening in Lewisville. No notification, unbudgeted, the city’s pass their city budget about the same time it seems like our industry folks are doing their budgets and are finishing them up. But what happens is the city will pass a budget that may be, if it’s a large city, a thousand pages, 1500 page budget and on page 22 of the 1000 pages is a little fee schedule where they’ve increased the fees and they don’t take a separate vote on that. The city council votes to adopt the entire thousand page budget. But page 22 is the one that really kills us and we get no notification about it until after it’s done. Then the city will send a letter out to all the properties and say, “Hey, guess what? Even though you haven’t budgeted for it, you’ve got about two weeks before your fees are going to increase by 80%, 90%.”
We had one case in the city of Bedford several years ago where the Apartment Association of Tarrant county actually sued the city over fees because they couldn’t come to an agreement with the city.
Elizabeth Francisco: I remember that.
Jason Simon: And it was a big industry push. We contributed to that lawsuit financially, the Texas Apartment Association contributed to that effort. It took about two years to settle that and it costs our members about a quarter of a million dollars in that lawsuit. But we felt like it was the right thing to do because we felt like if we stand up and fight this fight now, maybe other cities will see and say, “let’s not mess with the apartment association.” Unfortunately, it’s happened a few times since then, so cities are still doing that.
Elizabeth Francisco: Early in my career, I heard somebody said, “When things get tough, you can always count on our local governments and our governments to come after smokers, alcohol industry and multifamily.” (laughter) So far, I hate to say it, but that’s pretty much what I’ve seen. And I don’t know how we got grouped in with those other types.
Jason Simon: But it’s whatever you want to call it, low hanging fruit. I don’t know. But I think it does go back to, you’re dealing with elected officials, politicians, people that get voted into office every couple of years and I think they do take our industry for [00:22:00] granted to this day. They look at, “Hey, what’s going, what’s the worst that’s going to happen?”
Elizabeth Francisco: When you say taking for granted, I think you’re exactly right. I think back to the days where we would hire residents at our properties, we would bring them in… and it became a running joke. So much so, it became part of our new hire and our leasing seminars that we did because they inevitably come in and they’re immediately a resident rights activist on everything. Resident is 15 days late on rent? They have a good reason.” And you try to do your coaching and help them understand the business and actually how tight our margins are, which the general public doesn’t really know. All they see is they take their rent in their minds, and they multiply it by however many units and they think that there’s no concept of expenses.
And one of the things we used to do is we would have our new team members, this is the old days where people coded bills, but they would start coding bills. It was actually really effective for our company. It changed quickly because the first time they saw the common area water bills, the first time they saw our electric bills for the properties, the first time they saw our mortgage interest and taxes, then they started recognizing when we have 15% of our residents that don’t pay rent on time, the first of the month, we now have put ourselves in a position where we may not be able to pay. There are certain things that come out automatically, so that next set of bills that we have that all have a sense of urgency and have pretty hefty, late fees attached to them, particularly the utilities. If we can’t make those, then we’re incurring expense and that’s a fine line and oftentimes we get caught in between that. So it’s always really eyeopening and you could watch the transformation because the same team members people would have to go above to push back on whatever they were trying to advocate for themselves because they weren’t able to meet the obligations of earliest contracts, all of a sudden those would stop. Because now my front lines were vested in and understood how the properties actually work and understand how much goes into supporting and financing those properties. And people wouldn’t get past them anymore because they could stand their ground and because they believed in it and understood it. It wasn’t just the big, bad [00:24:00] landlord.
Jason Simon: A few members of ours have talked about this in the past, and we keep coming back to education, but educating the renters, the residents, would it help to educate them to show them “This is where your rent dollar is going, right? This is a property tax portion.” I don’t know if it resonate with them or not, but it’s going back to the slim margins that we operate on. That 10 cents of the rent dollar is profit. All the rest of that rent dollar goes to all your other expenses.
I think it’s NAA, if I remember correctly, that did a really great infographic about every dollar of rent.
Yes, we used it. I don’t know how many times I emailed that to legislators during the pandemic. It’s awesome. It really is a great resource and we quote it all the time. We were having a conversation the other day with a candidate who’s running for state representative about property taxes and whatever percentage it was, I think it was the biggest percent of the rent dollar that goes to property taxes. The property taxes and insurance are a huge strain on our members, right? It’s a huge strain.
Elizabeth Francisco: So I just got off on Friday talking to one of our customers, fairly large, over 30,000 units that are predominantly here in Texas. They were saying the property taxes… they knew they were going to be pretty hefty this year, but it’s more than they expected. They said between that and the cost of insurance. So those are things that come back into our budgets.
Jason Simon: I mean, we regularly hear a hundred percent increase on just your Texas property taxes. So a lot of Texas born and raised here, great state, but our property taxes are unfortunately some of the highest in the country. We don’t have a state income tax, but our property taxes are really tough.
Elizabeth Francisco: And we want to be attractive for people who want to come here and build apartments.
Jason Simon: I think people hear that though. I think when they’re looking at Texas, there’s so many positive things. But they do look at property taxes. I wonder if they say maybe Texas, maybe we go to Florida, or I don’t know, a friendlie r climate in terms of property tax.
Elizabeth Francisco: Yeah, but if there’s a long-term… That’s the thing we’ve got to remember. These are funded by investors and money comes into our space that maybe isn’t in [00:26:00] 401ks and these are people’s retirements. I think that’s the hardest point. We are not in non-profit housing.
Jason Simon: Bu t, that’s the perception on the other side, though. We’re talking about tenants rights groups, these fights that we’re battling now… the other side is talking about housing as a human right, which means you can’t profit off of housing, which is not sustainable obviously.
Elizabeth Francisco: No. Fundamentally that changes the quality of that housing.
Jason Simon: Yeah, of course.
Elizabeth Francisco: And that’s what’s interesting. So we were a 1031 exchange when we had our management company and we had a lot of investors from California and sometimes that seemed to be my biggest challenges. They were my biggest challenges, mostly because when it came down to approving the budgets, they didn’t understand our competitive landscape here.
It would get really frustrating because of our agreements. We really shouldn’t have had to push back, but we did. It was eyeopening to me when I got to go to California and go to see some of them. Instead of doing this over phones, it was like, “Let’s go meet and let’s get to know each other and have this better relationship.”
And the first hour, one thing I took away was the physical condition of the exterior of these buildings then the quality inside. And they had rent caps. It finally clicked with me. If they don’t want to spend any money, which is why they push back on anything I’m trying to do to have a competitive product, what I saw was a degrading condition. If you look at the government housing I’m aware of, they’re not the most ideal places to live. They don’t seem like they’re focusing on the same things. Whereas in our industry, we’ve seen what that looks like and that’s not a great condition either. So somewhere in between is some answers. I think this is why we’re getting ready to go into Advocate… Rent control is coming up fast and heavy.
Jason Simon: Yeah, you hear about a lot. A lot of states, a lot of cities are looking at it and unfortunately it’s supply and demand. But the bottom line is when you see rents increasing 20 plus percent, the other side is going to come back with rent control. And these increases are unsustainable is the thinking, so rent control has to be the solution is what the other side says.
Elizabeth Francisco: Yeah. And I still have to wonder because it’s kinda like the Great Recession. We came out of the Great Recession, our rent growth was incredible. But nobody stopped to appreciate what we [00:28:00] had been through. Where those properties were financially, how much capital had been fused into them because they weren’t able to meet their basic budgets. I wonder, even though we were able to collect the majority of our rents throughout the pandemic and, thank goodness we did have some government stimulus to help renters in need when they needed it, but I can also tell you from our own data that we saw our customers waiving fees like crazy. Their year over year revenue growth wasn’t the same. We know rent growth was stagnant, but those ancillary fees are there because they need that revenue. Without them there, they won’t be able to meet their budgetary needs.
Jason Simon: That’s the untold story because you don’t really hear that.
Elizabeth Francisco: It’s because we did have a lot to celebrate for. We kept people in their homes and we have rental assistance that’s there to help those that are facing eviction processes.
Jason Simon: Yeah, there was a lifeline and the rental assistance really was, yeah.
Elizabeth Francisco: But there is another side of that reality, we saw it in our data. We talked about it on the Rent Tracker Project, that’s what we were seeing is the average revenue per unit went down. So, there is somewhat of a loss that they absorbed.
Jason Simon: Was it pretty dramatic?
Elizabeth Francisco: It depended on the month. Some months were worse than others, but year over year the revenue growth… Rent growth came back around like 3 or 4%, but that’s just rent. That’s not everything else that was being waived.
Jason Simon: We heard all kinds of stories… It was just over and over again. Waiving and rent forgiveness… We had members that just forgave rent. “Hey, I’ll catch you on the flip side. Just don’t worry about it. This is a once in a hundred year pandemic. I want to keep you safe. I want to keep you healthy.”
Elizabeth Francisco: Tens of millions, if not a hundred million of rent forgiveness.
Jason Simon: That story’s just not told.
Elizabeth Francisco: And there are bad landlords out there. That’s the hard part, too. There are some. But from my personal experience, professionally managed assets, which is what we represent, house the majority of renters in apartments. So it’s a different conversation when you think about rent control. I think that’s coming up hot and heavy. I just read something where there was a hearing that took place talking about solutions for the affordable housing [00:30:00] and we were not engaged in that conversation, meaning NMHC and NAA, and the point of the letter coming out to members was, “we missed a great opportunity” which is where the naming convention for this session came up, our episode. When you’re talking about rental housing and how we house a majority of the apartment renters, why would we not be engaged in the conversation?
Jason Simon: And we should be. It should always be. We’re the experts. The legislators will tell you that we meet with legislators and elected officials. A good legislator that we would consider a friend of the industry would be someone who, hopefully, would agree with us on issues. They don’t always have to but somebody that’s always open to meeting with us and to listening to our concerns. Somebody who will actually reach out to us and say, “Have we heard from the apartment association before they take a vote?” and we look for that.
Elizabeth Francisco: that’s where I was going to say, it was the “Senate banking committee holds a hearing on the role of institutional landlords.”
Jason Simon: Okay. It doesn’t sound good. It doesn’t sound like a friendly hearing to me. When they say institutional, there’s usually a bias there.
Elizabeth Francisco: And unfortunately where’s our representatives in that conversation and our trade associations who represent them? So this is the reason for this session. What do you think?
Jason Simon: We should be involved there. And I know in the past we’ve had good representation at the national level. But certainly at the state level with the Texas apartment association at the local level with AAGD, we regularly participate in committee meetings and hearings. We should be involved in every housing discussion. Dallas is an example. Dallas is a majority renter city, our members house the majority of Dallas residents. Anytime there’s a discussion about housing, we house the majority of your residents. We provide X amount of jobs in your particular council district or city. We should have a seat at the table.
So we’re constantly looking for those opportunities, building relationships with policymakers [00:32:00] through our political action committee and other efforts to make sure we are at that table. At a hearing like that in DC, we really should be there at all levels, every level. Because every level has an impact.
Elizabeth Francisco: So one of the things I learned from prepping for our conversation was just how much has been done on AAGD’s website. You guys have some great information about getting involved, locally, understanding the issues at hand, but going up to Texas Apartment Association and the National Apartment Association. I was really impressed because when I was coming through the industry, I don’t even know if they had a website when I started. Probably not.
Jason Simon: They all have a magazine and we still have a magazine. Everybody has a monthly magazine.
Elizabeth Francisco: No, but the tools that have been built in for the members to utilize and even helping you understand where we need advocacy, and if you agree, the tools are there to help you facilitate the conversation with your state and representatives and your senators and Congressmen. I was just really impressed with that and I can tell there’s been a lot of work on all three fronts from AAGD all the way up to TAA and NAA. I actually sat back diving into it further than I should have, because I can only vote one place. But I thought all the tools were really there. Including the advocacy kit that you can download, it’s available through NAA. Do you guys have something like that on your side as well?
Jason Simon: We don’t have an advocacy kit. We probably should have one. We do have resources on our site where it probably needs some updating, but we do have some local issue pages that we regularly update on what’s happening in Dallas, what’s happening in Plano, what’s happening in Farmer’s Branch, what’s happening in Irving. At the county level, we do county updates. So we try to keep everyone in our region updated as much as we can, as timely as we can. Things happen very fast in our industry and certainly when it comes to legislation and government affairs and advocacy, it’s very dynamic. It doesn’t stay the same. Everything’s a new day. I get a phone call from a member. One day I talk to somebody about emotional support animals. The next day I talk about eviction moratorium [00:34:00] and the next day I talk about a fair housing issue, crime ordinances. It’s a lot of calls from onsite people, “what do I do with this resident?” So we’re pretty busy. We wear a lot of different hats, but we try to keep those resources updated as much as we can and, of course, we use the NAA tools and TAA.
Elizabeth Francisco: I was going to say specifically, as you were calling out those particular issues, there’s literally a landing page at the NAA website that has icons for those exact issues. It’s super easy to it, to help understand where we stand as an industry. What legally you’re obligated to do and not, where we have room for improvement.
We’re going to come back and talk in more detail about getting involved and what we need to know as members and voting citizens in our communities. But going back to talking about rent control, because I think that’s the one that is obviously going to gain the most steam… You live this every day and I’ve watched you and others at NAA and TAA and the lobbying efforts that we do. How urgent is it that we get out in front of the conversation? Whether it’s a toolkit specifically, there is data now showing the change in investments into areas with rent control. I believe it might’ve been about Oregon. The context of the article was “when rent control is imposed, investment dollars leave.” What familiarity I have had with true government housing, it’s a different quality of living for renters. I was a single mom, I grew up in apartments. My mom has lived in an apartment since I was in seventh grade and I just moved her into her first house three months ago. So I have a lot of emotional concern about this, as well. I’m emotionally invested in the living conditions that we put our renters in, our family members, our seniors. I just I worry about what that means. I remember being at a conference, probably Advocate, where the city of Portland had some legislation that had just changed and it was putting some caps on where rent could go and the whole theme of that conference literally out in the audience was nobody had plans to go invest there. They were pulling back their investments. And it was quite the buzz if I remember correctly and it’s [00:36:00] been a couple of years, but how important is it that we get out in front of this? Because I think people think it’s just a California issue is just a New York issue. Minneapolis, I think, has also passed legislation and in Seattle, Washington and Oregon.
Jason Simon: Yeah. It’s a huge issue. For our industry, it would be a do or die issue if it ever came to Texas. I do think that we’re fortunate. I don’t think we should take our eyes off the ball on rent control, but of course rent control is prohibited by state law, at least for now in Texas.
But if you look at the city of Austin, you look at the city of Dallas, even very progressive cities, very focused on, unfortunately, a lack of balance between the property owner side and the tenant side. It’s much more heavy on the tenant side and what can we do to help tenants during this time and really not taking into consideration the other side of the equation.
But you could see that start to happen in cities. I think that’s where it would start, in your cities. You’ve seen it, I think Colorado had something that maybe started in Denver and eventually became a state issue.
Elizabeth Francisco: But that’s a good example though, because if I’m not mistaken, it was the Denver Metro Apartment Associations came together, working collaboratively with both sides of bipartisan and the members of their apartment association came together and put together a plan that was pretty effective. There was a certain number of units designated in each of the communities and there was buy-in. I guess we’ll see longterm, but before the pandemic, I knew that it was getting a lot of buzz and it seemed like it was a really positive thing for all involved.
Jason Simon: Yeah. I remember part of that and I know that they did the local association, the state association did a really good job working together and they came together with the tenant advocacy groups and it was a compromise, but it certainly could have been a lot worse than it was.
Elizabeth Francisco: So far the experience, from what I recall, was pretty overall positive for the communities that participated, for the residents in those communities, for the residents that benefited from those units. So I don’t know if this is the end all be all, but it’s a starting point. I would love to have conversations like that instead [00:38:00] of capping and reducing investment. Because if that happened…
Jason Simon: It would be a disaster. If you look at all these places we’ve talked about, Minneapolis…. I think there are already big regrets about that one. That’s one of the most aggressive control schemes in the country. Very aggressive. It applies to even new development, which typically, I don’t believe rent control typically does. But it’s a very sweeping rent control that was passed at the city level. It was passed by that proposition when people went and voted. Vote “yes” for rent control, vote “no” for rent control. And unfortunately it passed the vote.
Elizabeth Francisco: Well that’s because on the surface, without the context, people who don’t understand the issue because who doesn’t want rent control? It sounds great. I would like property tax control. (laughter)
Jason Simon: Yeah. There’s talk about, “Hey, why are we paying property taxes? Let’s just abolish property tax.” Which sounds great. Of course, if it’s on a billboard, but it’s not realistic.
Elizabeth Francisco: There’s more to it.
Jason Simon: Yeah. The devil’s in the details and there’s no free lunch. But I think everywhere you look it’s failed. Everywhere they’ve tried rent control long-term, it’s been detrimental to the housing ecosystem. New York City, that’s where the whole thing started back in WW2 era, when they thought that was the thing to do at that time to address some of their economic issues. Of course, it’s all over the place in California, but we I’ve talked to a lot of members that have invested in Texas and they’re like, “Thank God, this is not California because in California, you’ve got rent control, attendance bill of rights that you have to follow, you’ve got just cause evictions.” You have to have specific reasons to evict somebody. That’s the last resort, but this just cause eviction stuff… People can be basically committing crimes and you can’t evict them in your property. So when they come to Texas, they’re like, “This is great. This is a great place to be, great place to invest and to operate rental housing.” But you’ve got a lot of forces, you could see some big changes in Texas. That’s why we have to stay.
Elizabeth Francisco: Who better to fix the housing crisis other than people who build housing for a living? I think that’s the difference, right? [00:40:00] That’s the conversation is how do we make this a process or a program and get the support at all levels to help us expedite and move barriers to just flat out building. Even if it’s in the short term, put more units out there and people will fill them. That tends to change things. I’ve lived through it four times now, where you have different cycles in the industry and the rents will swell. We can get people come and start building, and then once the units are available, we have some leveling out. I think we’re behind 218,000 units nationally speaking over the last two years. We already had a gap that was carried, so that just added to it, so we got to get back to that.
Advocate – Focused Issues for Rental Housing
Elizabeth Francisco: So because Advocate is coming up and we’re going to talk about what that means because it’s not just about going up to DC… when you look at the website for NAA, there’s 14 high priority issues. Which to me, it seems like that’s more than usual.
Jason Simon: It’s a lot. (laughter)
Elizabeth Francisco: I don’t remember there being quite that many in the past.
Jason Simon: Yeah it’s very ambitious, but I will say with Advocate and our annual trip to DC, at least the time I’ve been going the last six years, they’ve got that big list of issues that NMHC and NAA partner together. It’s a wishlist of all these different issues that we want to address at different points throughout the year. Because, like you said, Advocate is not just one day, right? It’s a 24/7/365. We should always be advocating for our industry when we have opportunities to, whether it’s in DC or in Dallas or wherever.
They’ve always got that long list. And I’m like, “oh my God how could you cover all this?” But thankfully, they’ve got it narrowed down to three issues this time. So we’ll be really focused on three priority issues when we go to the Capitol.
Elizabeth Francisco: And can you leak out with those are? I was trying to memorize everything about all 14.
The YIMBY Act
Jason Simon: Don’t do that. That’s for a later time. So it’s manageable with just a few issues but this year we’re focused on the YIMBY Act we talked about which is lowering barriers to development. We want supply of rental housing to [00:42:00] increase at all price points and this legislation would help that process. That’s bipartisan. So you’ve got Republicans, you’ve got Democrats that have supported it. The House of Representatives has supported it. The Senate has supported it. It just hasn’t gone all the way through the process yet. It’s gotten close, it’s gotten through both sides
Elizabeth Francisco: Is there any obstacles with that one in particular?
Jason Simon: It doesn’t seem like that one has a lot of obstacles. You can’t take it for granted. Unfortunately what happens in an election year, November is the general election, so everybody in the House is up for reelection. All 435 members are all running for reelection and then about half of the Senate is running. So what happens is they go back home to campaign, right? They’ve got to get reelected. So any chance of passing legislation the further you get into this year… so once you get past the spring, once you get into the summer… the chances for something like the YIMBY Act passing Congress this year, the window starts to narrow, it becomes more of a challenge. So there’s not one particular group or anything that’s opposed to it. I think it’s just a challenge to get a lot done in Washington period right now, which is unfortunate.
It’s unfortunate, but that’s the reality of Congress.
Elizabeth Francisco: The sooner, the better they can get something done.
Section 8 Voucher Program
Jason Simon: So that’s a great bill. We’ve tried to tackle this one before, but it’s really an ongoing issue is reform of the Section 8 Program, the housing choice voucher program that is a voluntary program. Some of our members participate in it. Some don’t. It’s really a business decision on whether to participate in it. As long as there’s not any discrimination or anything going on, you don’t have to accept or participate in the housing choice voucher program. What this legislation would do is incentivize more landlords to use the program. So to make the program more user-friendly. To cut back some of the red tape and the regulatory stuff because members that we talk to, they may want to use it, they may think, [00:44:00] “Hey, this is a good program. This could help people.” But NAA put together a really cool chart and I’ll have to share it with you but it basically shows your standard leasing process, so it’s like a flow chart. The standard leasing process, as you can imagine, somebody comes in to rent an apartment–
Elizabeth Francisco: I make software for this process. I know it well. (laughter)
Jason Simon: You got it. So it’s really simple, but the Section 8 process, the side-by-side process, takes up about this much of a legal size piece of paper where the traditional part takes about this much.
So it’s a great side-by-side visual to show a legislator, “Look how complicated this Section 8 process is. We could use more of these vouchers if that leasing process looked more like the conventional leasing process, it could be streamlined.”
It’s same thing we have in affordable housing and our tenants in common.
Elizabeth Francisco: The tenant certifications for affordable housing. It’s a beast of a process. Oh my goodness. We have a whole other workflow that we’ve had to do inside ResMan just to accommodate that. It’s burdensome on us and burdensome on the frontline teams, the back office compliance and it’s burdensome on the renters themselves. So that’s a piece of it. Is there anything else with the revamping of the Section 8 voucher program? Like what other things would incentivize a property owner?
Jason Simon: I don’t have all the details. I haven’t looked at the legislation recently, but I know there’s talking points and more detail about about that on the website, but, basically it would be some financial incentives built in, as well. It would establish a kind of a landlord navigator position within the process. So you would have a landlord friendly liaison to work with you through the Section 8 process. Which, to my understanding is that doesn’t exist right now. That would be something that would be created by this legislation, to have a landlord navigator, somebody to help you from the landlord side, steer through that process.
Elizabeth Francisco: Because that’s intimidating, especially because like I said, we have all sizes in our audience from five units all the way up to [00:46:00] tens of thousands of units. That can be a little bit intimidating for people who maybe do want to get involved or participate. So that’s great.
Jason Simon: So I think the bottom line is… it’s cutting through some of the red tape, breaking down some of the barriers and, hopefully through some of those kinds of things, it would incentivize people to use the program more. Because I think it benefits. It’s a good program. It just needs to be fixed and reworked and modernized, make it user-friendly.
Elizabeth Francisco: I was going to say, in my language we call that “user-friendly.” (laughter)
Jason Simon: Yeah because this was passed back in the seventies, but it hasn’t been really touched since that time. So any law, you shouldn’t wait 40 years to look at it again.
Eviction Moratorium and the Effects on Rental Housing
Elizabeth Francisco: And so what’s the third one?
Jason Simon: So the third one is probably the heaviest lift where I think we may get some opposites. Right when the pandemic started, March of 2020, when the CARES Act was passed, it was passed Republicans, Democrats. I think there may have been like one vote against it through the whole Congress. Everybody voted for it. We needed the money. This is a pandemic. Businesses are going to collapse. The economy is going to collapse. We’ve got to support all these different industries. So it was a rush of money. All kinds of programs, PPP program, all of those programs were in the CARES Act. It was a big piece of legislation. In the CARES Act was a 120 day eviction moratorium. So most everybody’s familiar with that. It was like, “Hey, we know we’ve got to, we’re going to try to keep everybody housed. This is a temporary measure. This was never meant to be permanent. It’s 120 days. Once we get past that, we’re in the clear.” Of course, it got extended. The CDC got involved and made it apply to every rental house, all rental housing across the country. The states got into it. The cities got into it. The city of Dallas still has an ordinance that extends the eviction process. Two years later, we’re still dealing with this stuff. Unfortunately, in the CARES Act, they did the 120 day eviction moratorium, it came and went. But they also included in there if you are a covered property under the [00:48:00] CARES Act, so if you’re a Fannie, Freddie, if you have any loans, any of that, when you give a notice to vacate for an eviction, you have to give a 30 day notice, when in Texas it’s normally a three-day notice.
So if you are covered under the CARES Act, you’re required to give that 30 day notice. The reality of it is, if you don’t give that notice and you go into JP court, file your eviction, you’re before the judge, the judge is going to ask you, “Are you covered under the CARES Act?” There’s going to be some paperwork that you have to fill out. If you say I’m not covered and you are covered, your case could be dismissed. So that’s the end result of it. The problem is that 30 day notice to vacate our position is that should’ve expired with the 120 day eviction moratorium. It was temporary, it was “Let’s get through the pandemic, until we have vaccines and rental assistance and get rid of it.” But the 30 day notice to vacate is still in place and there’s no end date. So it will not end. Every member who is federally backed, is covered by the CARES Act will have to provide a 30 day notice to vacate for an eviction until we can bring it to an end. So we still have members that are dealing with this two years later. They’ll call AAGD and they’ll say, “Do we still have to do the 30 day notice?” Yes, it’s required under the CARES Act. If you’re a federally backed property, you’re covered. And if you have a voucher holder on your property, it applies to that voucher holder. Thankfully it doesn’t apply to the whole property. But it would apply to that one unit where you have your voucher holder. You would have to give that voucher holder a 30 day notice where you could give all your other residents only a three-day notice.
So what we’re asking Congress to do of course, is to sunset that, put an end date on it. Because we feel like it was never intended to be permanent policy.
Elizabeth Francisco: Well, and if you look at our unemployment rates now across the country, getting back to business as usual for a lot of us different sectors, makes sense and [00:50:00] has made sense for some time now. So this would be a perfect example of that.
It was interesting. We had some guests coming in for our podcast last week and I was really surprised to hear about their struggles. They’re still having with renters who are one, two years now behind on rent. I joined a hearing Just to listen in over the summer. It was talking about landlords, not doing enough to get in contact with their residents. I think there was somebody up north that was working with their representative and they all went out on site and they got people signed up that day. I think we have to be careful. Society, in general, right now seems to be painting everything with broad strokes.
And the reality is, they are doing things like that. They are hosting site events, “come on down and talk to us.” it’s a lot of money. But I was surprised that there are renters in units that are two years behind on rent now. They are not cooperating to get the rental assistance.
Jason Simon: They have to cooperate.
Elizabeth Francisco: And because the court system is so far behind, they know they’re not going anywhere. It’s such an odd thing to me because there’s, I can’t imagine anyone wouldn’t want to. The other thing that they were sharing with me is how much fraud that the industry is dealing with now. So we have this other cost that, that is impacting our bottom lines and a lot of risk and a lot of lost rent or uncollectable rent we can’t recover because they got through the system and it’s fake identities. But I was really surprised by that, too. So on top of having these pockets of people at each property that now have upwards of two years of back owed rent, which is insane. They know they’re working the system. Now, that’s not everybody there’s really good renters out there. And of course, we got to clarify that because that is the truth.
Jason Simon: But I think our concern is all of this was around COVID. This is a once in a hundred year, we’ve got to take this action. This is unprecedented action. The federal government, the CDC. But what does the CDC have to do with eviction? Why is the government getting this involved? But, they said, “We’re going to do whatever we can to keep our residents housed. Evictions are a last resort. This is not something that we want to do and intend to [00:52:00] do. We’ll do everything we can to keep our residents in place during the pandemic.”
But we are two years away from March 2020 and we’ve got widely available, highly effective vaccines, whatever you think about the vaccines, they’re readily available. The rental assistance dollars, tens of millions of rental assistance dollars that are available, that are still available. In Dallas, you could have up to 18 months rent paid if you qualify for the Dallas rental assistance program and they still have anywhere from 15 to $50 million available. The residents have to cooperate. We can’t do it on our own. We’ve advocated as an industry with the Treasure Department because the Treasure Department is the ones who sent the money out, they came up with the legs for rental assistance. NAA’s had numerous conversations, we’ve had conversations with the Treasury Department that says, “If you have an uncooperative resident that will not communicate with you, that refuses to answer the door, can we apply for that assistance on their behalf without their cooperation?”
And the Treasury Department has said, “No, you have to have their consent.” Even though we know some of them are willfully ignoring and they owe tens of thousands of dollars, $50,000 in back rent, in some cases.
Elizabeth Francisco: This goes back to what we were talking about when you look at the realities of running a property, right? You’ve got the perception of all this cashflow without expenses, but there’s also damages we incur and that’s being carried over month by month. So it’ll be interesting to see when this is all said and done. What was the actual damage across the board to our members and non-members, in general? And if you’re a small mom and pop you’re done. If you only have a duplex or four-plex or maybe a couple of rental homes and they’re not paying and they can’t be evicted, then you’re taking out the property owner, as well.
Jason Simon: The AAGD, the local apartments association, our association is almost 50 independent rental owners, so people with less than 50 units make up about half of our [00:54:00] membership. Wow. So they were hit particularly hard and they were not picked up in the rent tracker. But those untold stories, and I know for a fact because I’ve reached out to a few of them on other issues and they completely went out of business. One company had been around in the city of Denton for probably 30, 35 years, they went under and it was just non-payment of rent and they had so much delinquency on their property, but they’re out of business.
Elizabeth Francisco: Wow. When you’re a small operator, one month’s rent is a huge amount. Then you start accumulating that for a solid year… There’s a material impact to your ability to pay other things taxes, mortgage…
Jason Simon: We would hear, over and over again, these nonpayment of rent are really impacting the lower income, and these people are living paycheck to paycheck… we’ve got small owners that are living paycheck to paycheck. What about them? What about those small owners that may just be completely dependent on that rent coming in and coming in timely? They’re just not able to do any deferred maintenance, they’re not able to pay. Some of them it’s like, “How do I pay my property taxes when I have so much delinquency? There’s a gap between what I own property taxes and all this delinquency across my portfolio. I can’t even really pay my property taxes on time. I have to make payments.”
Elizabeth Francisco: This is where the reality doesn’t meet the intent. I saw this back in my early days. I got to the point where every time we would do our three-day notice to vacate and those who would end up facing eviction didn’t understand the process. You would see people starting to pack up on the third or fourth or fifth and so we would go through the property in our golf cart and we all had a theme at my property about this awareness… we saw somebody and said “Stop! You can still pay. You just need to know that this is for people who don’t end up paying. So don’t panic. Come talk to me. Just don’t assume.” But you put that out with smaller operators who don’t have an office out on site, how many rent renters just bailed because they didn’t understand? And unfortunately, even the rental assistance program didn’t get the media coverage that it should have because there was too many other things being focused on at the time, when, in reality, we all should have [00:56:00] focused on this. Cause I think a lot of it also has to do with just people not knowing true. It wasn’t popular on Twitter cause I never saw a tweet about it.
Jason Simon: Yeah, we did a lot. The apartment association, I feel like, did a lot to try to connect, to create awareness. But I honestly feel like the local governments, the cities could have done their own PR campaign. The counties could have done their own PR campaign, could have put up billboards. They could have done radio ads, they could have done TV. What we were most concerned about was connecting our members because our members are in the best position to know who’s behind on rent on their property. So they could go to unit number one, unit number five, unit number 10… they could get their rent, they could pull their rent roll and say, “These people need help. I’m going to go target them. I’m going to put something on their door. I’m going to give them a call.”
Elizabeth Francisco: You guys did a great job of that.
Jason Simon: And we did probably half a dozen or more webinars with the city of Dallas, city of Denton, Collin County… saying this money is available, do what you can to connect with your residents. And I think a lot of people were helped, but you still had some…
Elizabeth Francisco: Or those people, if you think about the ones that just moved out, there’s no recourse now for the property owners, they’re left holding the bag because you had to get their participation and signature. So while we’re talking about advocacy and yes, we remember y’all are still there, but this also just turned into why you should be a member of your local apartment association.
Jason Simon: We do so much for you. We care so much about the industry and there’s just so many great people and it’s such a great industry to advocate for. It’s really a pleasure for me to do what I do. I enjoy it.
Advice for New Attendees at NAA’s Advocate
Elizabeth Francisco: Yes. So I think then that brings me back to talking about Advocate in particular, because I know you have a presence there and are definitely an instrumental part in this two weeks from now conference. I remember the very first time. I admit it is pretty intimidating and if it hadn’t been for one Char McCurdy, I don’t know what I would have done. She took me under her wing and God bless her. But it’s a lot to take in, especially if you’ve never been politically active before. Everything seems like such a heavy topic.
For people who are attending, cause you can still sign up, there’s still time and there’s still room [00:58:00] for you to go participate in this year’s Advocate, the organized event. What would you say? What does somebody who’s going for the first time need to know about this event?
Jason Simon: Find your Char McCurdy.
Elizabeth Francisco: Now we just overloaded Char. (laughter)
Jason Simon: No, really, there’s so many leaders in our industry who have gone and will go again to Advocate, year after year. You can learn a lot by just watching them, asking questions, observing, shadowing them.
Elizabeth Francisco: And they’re all really giving of their time. If I remember correctly, day one where we talk about the issues, they do have tables that are by region. So when you can look up on and understand… I think going in there and just raising your hand and say, “This is my first time,” introducing yourself… and just knowing this is, even as a supplier at our company, I make sure that we talk about our presence at this event. It’s probably hard for my sales leader to hear this, but I repeatedly say we’re not there to sell. That’s not what this is about. This is really about being hand in hand, shoulder to shoulder with our customers and we’re part of the communities that we live in. This matters to us as well to basically do our part which I think is a really important aspect of this.
It’s exciting to watch people learn for the first time, too, because so many other companies where this wasn’t a priority, didn’t have the same commitment and empathy, because I’m an operator at heart, we’ve grown our footprint across the country, I also realized how many of my own customers are not part of our associations, especially as we get out of the Sunbelt states. I’m trying to bring them in because I see all these advantages and especially in trying times. But definitely search someone out.
Jason Simon: And don’t be afraid to ask questions. It’s a cliche, but there’s no such thing as a stupid question. Ask questions, ask about, “Hey, we’re going to meet this Congressman or Congresswoman at the Capitol? Are they friendly to us? What’s their position on our issues? Are they influential in the Capitol? Are they respected by other members? Ask those kinds of questions because that stuff does help you get a better feel for [01:00:00] the people that you’re meeting with and just getting a little bit of background. We like to provide all of our members that are going to the Capitol visits with some background about each member. I think it’s interesting to see all the different biographies. Everybody’s got a very different background. You have a lot of veterans in Congress, a lot of small business owners, teachers, lawyers, doctors, everybody’s got an interesting background. And we do have several members that are actual rental property owners and owned stuff in the past or own stuff now and they can definitely relate to our issues. Just to know a little bit about their biographies and their backgrounds helps.
Elizabeth Francisco: What about this? I’m just going to flat out admit it and it won’t be a surprise to Char cause I’m pretty sure she knew it, but all I remember… trying to absorb everything and this pressure I put on myself that was unnecessary. I kept thinking as we went to the Capitol is “Please, God, don’t ask me a question.” (laughter) And not because I didn’t know, because you guys do a great job. You get a printed material, so you don’t have to feel like you have to know everything about every issue. You’re there to learn too, and just share your experiences. But without ever being to the Capitol, they invited me, I’m like, great. And then I got nervous as hell because I’m like what if I say something wrong that hurts the entire industry? (laughter)
Jason Simon: You’re putting so much pressure on yourself. (laughter)
Elizabeth Francisco: It’s not that way, people, I’m just telling you. So tell us a little bit about what the Capitol visits are like. Cause I love them now.
Jason Simon: Yeah, it is pretty cool. Especially if you’ve never been to the Capitol, it’s just a neat place. And of course, a lot of history and beautiful building and just really neat to walk around and be a part of it. You get to these offices and they’re not super glamorous. They’re pretty small. The staff cubicles, in most offices, you may have one door that closes, like a closed door office, that’s the member of Congress. But the staff, they’re in an open environment and it’s not real fancy. It’s not real big. We used to take 10 or 12 people up to these meetings and you had to stand out in the hall because the office, you couldn’t fit that many people in the office. You think you’re walking into this majestic [01:02:00] building and it’s marble, all these cool statues and then you walk into this office and you’re like, this is all it is?
Elizabeth Francisco: Like those 1970s blinds. (laughter)
Jason Simon: Yeah. It’s like this hospital environment now, so that part you’re a little bit intimidated, but then when you walk in, and it’s like, “Okay, this is just like a normal office.”
Elizabeth Francisco: Tell the audience, too, about working with the aides.
Jason Simon: I used to be one. I was a staffer for a member of Congress and I was here locally in the district office. I didn’t spend much time in DC. Working with the staffers for the members of Congress, it could be just as important as actually meeting with the member of Congress. Because a lot of times when I would meet with different groups that would come through the office and I would take those meetings as the member of Congress was doing a million other things, I would take notes, I would ask questions and then he would ask me how the meeting went and he would ask me my opinion. And he would take basically my feedback and run with it because he trusted me. He knew that I was in the meeting, I was engaged. I studied the materials ahead of time, whatever. So the interactions you have with staff are very important because of this. The members of Congress rely heavily on the staff’s opinion. So don’t ever take a meeting with a staff member for granted cause those are super valuable
Elizabeth Francisco: They’re gatekeepers.
Jason Simon: Absolutely and they’re very influential. So it really matters. Of course, we love to meet with the member of Congress and get the big root picture and tell NAA that we met with all of our members. But NAA, we’ll tell you the same thing. It’s like meeting with the staff, engaging with the staff there, they are your gatekeeper, they’re your first and last point of contact. It’s really important to try to nurture those relationships and build those relationships. I will say, DC’s a kind of a young person’s town. Everything moves pretty fast. So the staffers at the Capitol may only last a few years in that office. There’s quite a bit of turnover. Here, locally, because every member of Congress has the Capitol office in DC and then they have a local office wherever their district is.
Elizabeth Francisco: So do they have two staffers, then?
Jason Simon: They have many more. So in the DC office, you may have as many as four or five [01:04:00] staffers. Then in the local office, you may have the same amount depending on the area. But every member, if they’ve got an office in DC, they’re going to have an office in Plano or an office in Irving or Carrollton. They’re going to have that local office. I would say those local interactions with the local office, Advocate is very important. Get up there to Advocate. It’s definitely worth your time. You learn a lot, it’s a great experience, but keep in touch with your home office. And we do that a lot here.