Property Management: Leveraging Resident Fees as Ancillary Income

With the country full-speed ahead on its pandemic recovery, there are many ways to define the new normal and offer what to do about it. 

Here’s my take: It’s time to restore your pre-Covid resident fee schedule. Many suspended parts of it – and for good reason – during the pandemic as the country’s economy struggled. 

The hangover effect of the pandemic is leveling off. Job creation is healthy. Wages are rising from the competitive demand for labor. Today, even struggling gateway cities are seeing boosts in rents and occupancy. In fact, our data is suggesting that we are not only seeing rent growth come back, double digit growth in some regions.  Interesting that ancillary revenue has not bounced back at the same rate.   

Typically, 7 to 9 percent of effective rent comes from ancillary income. It can be higher. Restoring your resident fees and even adding new ones will help to revive your NOI.  

Reinstate Resident Fees

The market is well into recovery at this point, and so should your fee collections.  Economic challenges are still lingering in many areas to be sure to evaluate where the asset is located when you reinstate fees.   Don’t assume that your competition is charging what they use to, as with all things you need to know what the market will bear, so do shops the comps.     

Take this advice to heart:  

Figure out what’s important to your residents and come up with ways to monetize it. 

The biggest no-brainer is to focus more on residents with pets. Don’t underestimate the value of pets. We have seen record numbers of adoptions across the country and many residents welcomed in new pets during the pandemic.  The U.S. Pet Market Outlook Report 2021-2022 reported that retail sales of pet products and services reached $107 billion in 2020, up 9% over 2019, due largely to a COVID-19 driven spike in the pet population.  

Residents are more emotionally attached to their pets than ever. People are willing to pay whatever it takes to keep their pets as part of their family.  

Re-evaluate your breed and weight restrictions and with that your fee deposit and pet rent.  Offer pet engagement activities for a fee. Provide mobile pet services. Offer pet clinics and grooming services, along with the standard pet fees and deposits as part of your lease.   In years past, we have seen communities set up a mini store for convenience store items, why not work with a retailer to have cat and dog items for purchase.  

multifamily-cta

Try It, You’ll Like It 

Another idea: Continue things that worked for you (and that your residents loved) that were offered during the pandemic. 

Did you offer classes in alcoholic beverage mixology? Host wine tasting parties? Cooking classes? Don’t be afraid to continue these events if they worked the first time. Regional managers need to give their onsite staff members the confidence to execute them. Remember: People will pay for value. 

Some more: Have you done a deal with your popular, local food trucks? Identify the best ones in your neighborhood and arrange for a revenue share with the truck owner. 

It can’t hurt to create fees for VIP parking, package concierge services, scooter rentals, mobile car detailing and premium fees for convenience-based services. 

 Here are the numbers: 

For a 270-unit garden-style community, with $1,318 in average monthly rent and $2.5 million in annual net operating income, the impact of even small fee increases is significant. Think of it like this:  

$5 per month, adds $270,000 in property value. 

$15 per month adds $810,000. 

$50 per month adds $2.7 million. 

We’re in a period now where there’s no better time for businesses to latch onto the economic recovery – and that can happen in your apartment community. 

ResMan Acquires Investor Deal Room

ResMan Acquires Investor Deal Room 

Acquisition Adds Investor Management Capabilities to ResMan’s Full-Featured Property Management Platform   

ResMan®, a leading property management SaaS platform provider, today announces that it has acquired Investor Deal Room, an investor portal and investor management SaaS solution that helps real estate syndicators automate investor subscriptions and improve reporting, communication and transparency with investors. This acquisition continues ResMan’s focus on providing property management companies with the technology solutions they need to grow and operate their businesses more efficiently.  

“Managing relationships with investors is a critical aspect of business operations for many of our customers and we’re excited to add this capability to our offering,” said Paul Bridgewater, ResMan CEO. “Investor Deal Room aligns so well with ResMan’s focus because the technology is powerful, yet easy to use so it drives efficiency and cost savings around raising capital and communicating with investors.” 

Investor Deal Room offers the multifamily industry an alternative to traditional investor management platforms – one that is full-featured, intuitive and easy to use for both fundraisers and investors. The solution supports all phases of the investment lifecycle – from marketing a new investment opportunity to onboarding investors, receiving capital, storing documents, providing updates and managing distributions.  

“ResMan’s focus on helping property management companies increase efficiency and facilitate growth with innovative property management capabilities aligns really well with what Investor Deal Room is doing for the investor management side of the business,” said Josiah Mann, Investor Deal Room CEO. “Now as part of ResMan’s offering, Investor Deal Room customers will have access to a much broader set of innovative business management capabilities and ResMan customers will benefit from an investor management solution that will help them manage deals more efficiently and support their investors with a seamless experience throughout the deal cycle.”  

ResMan will continue to market, sell, develop, operate, and support Investor Deal Room as a brand and SaaS solution separate from the ResMan platform. Those interested in learning more about Investor Deal Room can register for a webinar being held on Tuesday, June 29th at 2pm CT.  

ResMan Extends Affordable Housing Capabilities to Support Rural Housing

ResMan Extends Affordable Housing Capabilities to Support Rural Housing; Rounds Out Industry-Leading Affordable Housing Property Management SaaS Solution 

ResMan®, a leading property management SaaS platform provider, today announces the addition of Rural Housing compliance capabilities, broadening ResMan’s innovative affordable housing solution to include support for HUD, Tax Credit and now Rural Housing properties.  With these new capabilities, property managers can manage all of their Rural Housing eligibility, certification and monthly reporting within the ResMan platform, which meets all of the USDA’s requirements and connects directly with Management Interactive Network Connection (MINC) to deliver compliance reports.  

“Now customers in the affordable market can manage their HUD, Tax Credit and Rural Housing properties all on one, seamless platform while ensuring compliance with all regulations,” says Janel Ganim, senior vice president of product at ResMan. “Well-built, affordable housing for low-income individuals living in rural areas is essential to the vitality of communities across this country. We’re proud to give the industry the technology they need to streamline the management of these properties. With ResMan’s addition of Rural Housing capabilities, a broader set of affordable property management companies can benefit from our industry-leading Compliance Center dashboard and automation as well as the breadth of leasing, accounting, maintenance and communication capabilities that make up our complete property management platform.”  

For those interested in learning more, ResMan will be at the upcoming Council for Affordable and Rural Housing (CARH) event June 28-29 at The Ritz Carlton Pentagon City in Arlington, VA. Sign up here if you’re interested in seeing a demo of the ResMan Platform and these new rural compliance capabilities. ResMan will also be hosting a webinar, “ResMan’s Mid-Year Affordable Housing Market Update – Trending Industry Topics and Our New Rural Housing Capabilities,” on July 14 at 3pm CT. Register here.  

ResMan Named a National Apartment Association Best Place to Work

ResMan®, a leading property management SaaS platform provider, today announced The National Apartment Association (NAA) named the company a winner of the 2021 NAA Best Places to Work award program. Through this award, the NAA identifies member organizations that encourage employee engagement and performance and foster collaborative and innovative work environments. The award pays tribute to employees and their hard work, which directly contributes to the success of suppliers, management companies and the rental housing industry. ResMan won the coveted spot in the Medium Sized Company – Supplier category.  

“We are proud to be a valuable part of the rental housing industry and honored that our commitment to our employees and their hard work is recognized. This award is really a recognition of how deeply our team is committed to one another and to putting our customers first so they can focus on the communities they serve,” says Paul Bridgewater, CEO, ResMan. “Thanks, too, to the NAA for the unwavering support, resources and guidance they provide the industry day in and day out. We are proud to be a supporting partner of the NAA.” 

“Congratulations to ResMan for building an organization focused on employee engagement and performance,” said Bob Pinnegar, NAA President and CEO. “Your employees made it clear — ResMan is a great place to work that cares about, listens to and acts upon the needs and ideas of their employees. Congratulations to the entire team.” 

Winners were determined based on scores gathered from a Net Promoter Scores (NPS)-based employee satisfaction survey, launched as part of the awards program. Employees themselves determine where their organization ranks, providing employers with valuable, firsthand feedback about their workplace. 

Resident Retention Tips: Your Best Response to Curbing Resident Move-Outs

Proactive Ways to Improve Resident Retention

You and your residents have been through an awful lot the past year. Many of them have been facing difficult situations personally, in their living arrangements and financially. Fortunately, well managed communities and their staffs have been with them every step of the way. 

This is something worth reminding them when it comes time to renew. 

Retention can and should be more than just reporting on renewed leases; your software should allow employees to chronicle activities by its staff members at the individual resident level that improve resident satisfaction. 

Is the past year a blur? Probably. Residents might only remember what’s been happening with them since that morning, or maybe just the past week. So, it’s important for your team track all those positive moments. 

Imagine. While on a service call, the maintenance tech notices a beeping smoke detector so they go ahead and take care of it much to the resident’s delight. Or maybe on the walk to the office, an onsite team member helps a resident clear snow on their windshield or help them manage packages. 

I know, these kinds of nice deeds happen all the time, but wouldn’t it be great if what your employees did to make their residents’ lives more pleasant was recorded in your property management software instead of being written on a note that was left in a drawer in the office somewhere and forgotten? 

When it comes time for residents to renew, have that documentation out and ready to show them. Not in an obnoxious way, but as a reminder. Residents often forget all the little things you might have done for them. 

During this past 15 months, you’ve built up a lot of emotional credit with them. 

This is a simple thing. It works. And while tracking these types of events, if the onsite team notices that some residents’ “good deed” files are empty, then those are the residents you should target. Look for ways to engage with them and to do something special. Really, retention efforts start the minute they first walk into their new apartment. 

This is something worth reminding them when it comes time to renew. 

Retention can and should be more than just reporting on renewed leases; your software should allow employees to chronicle activities by its staff members at the individual resident level that improve resident satisfaction. 

Is the past year a blur? Probably. Residents might only remember what’s been happening with them since that morning, or maybe just the past week. So, it’s important for your team track all those positive moments. 

Imagine. While on a service call, the maintenance tech notices a beeping smoke detector so they go ahead and take care of it much to the resident’s delight. Or maybe on the walk to the office, an onsite team member helps a resident clear snow on their windshield or help them manage packages. 

I know, these kinds of nice deeds happen all the time, but wouldn’t it be great if what your employees did to make their residents’ lives more pleasant was recorded in your property management software instead of being written on a note that was left in a drawer in the office somewhere and forgotten? 

When it comes time for residents to renew, have that documentation out and ready to show them. Not in an obnoxious way, but as a reminder. Residents often forget all the little things you might have done for them. 

During this past 15 months, you’ve built up a lot of emotional credit with them. 

This is a simple thing. It works. And while tracking these types of events, if the onsite team notices that some residents’ “good deed” files are empty, then those are the residents you should target. Look for ways to engage with them and to do something special. Really, retention efforts start the minute they first walk into their new apartment. 

A Fresh Look at Four Walls 

When trying to make up for move-outs, it’s too easy to just try to buy occupancy. You don’t have to. During my property management days, our goal was a 60 percent retention rate. That’s high, but it was our bar. If we fell behind, we’d know it and try to fix it. Dropping rents does not have to be the answer. 

Some say, during good times, if you’re 98 percent occupied, your rents are too low. But wait: You can be 98 percent occupied and also lead your market in rent if you do everything right. You have to remember that this is your residents’ biggest investment. It’s the place they call home. Doing the little things will add up to make that difference. 

In 2021, we could see big swings when it comes to year-over-year numbers. Many residents, at this point, are sick of staring at their same four walls and will want to move. 

When you meet with them, ask them what you can do for them. Don’t underestimate the emotional credit they help to build between you and your residents now – after everything you’ve both been through the past year. 

If you listen to what it is about their apartment home that has become stale in their eyes you might stumble upon ways to improve the environment.   Be supportive by offering alternatives to another month looking at those walls. Offer them a new environment. It might mean suggesting that they move to a different apartment in your community, or to a nearby sister community.  

Maybe there are some furniture discounts you can offer so they can make a few changes in their place. You have to get creative.  Maybe they want a view that is a little greener, so you let them pick from a catalog of patio plant options, plants that not only enhance their home they can take them with them.  If they now office from home, and are using their only bedroom due to space, you could purchase a murphy bed (a nice one not the cheapest one) that makes the room multifunctional but with space.  You can save money when you set up a corporate account with suppliers like wayfair.com.  

At the same time, you also have to do the math based on if you are a short-term property holder or a long-term one.  Incurring the turn and remarketing expense in the current year for a marginal effective rent increase could be the right call if you are looking to position the asset and need the rent growth.  If you are planning a long-term hold, getting a marginal rent increase but avoiding the turn and remarketing expense could be the right call for your cash management.  

If you budgeted for flatlined rent growth or a slight increase by unit type, now is the time to start paying close attention to your value propositions and the demand for individual units. No two units are exactly the same; otherwise, they would have the same unit number on the door. 

So, utilize unit-level demand and occupancy reporting to identify rent growth opportunities at the unit level. 

Your software should provide you with real-time visibility into the retention efforts along with rent growth analysis and forecasting at the unit type and the unit level.    

Good news: ResMan can help with this. 

Managing Lease Expirations More Than One Month at a Time

Managing Lease Expirations

When it comes to lease expirations, the need to look more than 90 days out is crucial. Disregard for long-range lease expiration planning can result in a financially destructive situation for well-intended apartment property management teams. 

While revenue management software is a valuable tool in this process, having your leasing staff address lease expiration on a regular basis eases the anxiety that can come from an unnecessary sense of urgency created to fill vacancies at any cost. 

Historical leasing cycles changed in 2020 as a result of the pandemic. Our normal spring cycle was delayed by two to three months and it extended well into the fall, leaving the industry to question what leasing cycles will look like going forward. 

Coming soon: These adjusted cycles will affect forecasting. Even more, they will make expirations from last year’s lease-ups more demanding. 

Your 2020 actuals are both different and unique, and you can’t really use them for comparative basis in 2021. As for 2022, and it is too soon to know if it’s a safe assumption that you’ll be tracking back in line with 2018-2019 trends. 

Right now, you cannot afford to have a “set-it-and-forget-about-it” lease management strategy. Once you have determined the approach most suitable for lease management at your communities, you need technology to help you to execute your plan and to ensure compliance by the site staff. 

ResMan is here to help with that. 

Our property management software was designed during the height of the Great Recession to help operators navigate down market and aid in long-term planning to create more predictable revenue flows and maintain occupancy.  Our software worked for us when we needed it most, and ResMan can help achieve your financial goals today. 

Leasing Trends

We started seeing in our customer base as 2020 progressed that there was an unusually high number of month-to-month leases at their properties, many of which were carried through into the new year.  Traditional retention rates dropped from a lease term perspective; however, residents were staying in their apartment homes, and it was much because of uncertainty about health and safety, the economy, federal support programs and their own employment. 

We are well into what is considered a seasonal leasing cycle without fully understanding what the emerging trends will on the backend.   What will retention rates look like for 2021 as hold over month-to-months may be ready to make long-term decisions.  How do you balance the leasing activity while not losing sight of the long-term impact to occupancy and rent growth?    

How to Develop an Effective Lease Expiration Management Plan

The key to your asset’s financial stability and ability to make up lost margins could lie in your lease management plan.  

We learned the hard way about the impact of not having a lease management plan during the 1990s – before revenue management was developed – when a lot of communities didn’t manage lease expirations well.   I personally learned my lesson from a group of lease-up communities I was responsible for filling up.   They were in lease-up, and back then, it was all about filling that property up! But there was not much thought beyond that in terms of how to maintain it as a stabilized community. 

In one Dallas property, we had 200 leases expiring over an April to August period.  The property also faced competition from a new development across the street.  Assuming a 50 percent renewal rate, that could have and did result in just over 100 apartments that the site team had to lease and turn in three months.    The property didn’t have the marketing budget we had during lease-up and faced increasing expenses compared to a brand-new community.  That was really a wake-up call. 

From that day forward we had a well-developed lease expiration management plan, and eventually a great set of features in the ResMan Platform to help you develop and manage your plan.   A good lease expiration plan goes beyond tracking and reporting on lease expirations, it is proactive and positions the property, the specific unit types and the team for success.  

Every time our team met about what we were doing, it wasn’t only about that day, it was about how what we do will affect things 30-60-90 days from now. And when they achieve their leasing goals through this hard work, you’ve got to reward them for it. 

Having that kind of mindset put us at ease and helped us avoid lease expiration pile-up and instead drive ahead in an efficient and on a more predictable and profitable road ahead.  Controlling how and when units are available in the market, provides you the opportunity to maximize the rent potential and creates organic sense of urgency for the leasing staff and prosects to lease the units. The last thing you want is to be forced into displaying an unusually high number of a particular unit type (such as one-bedroom apartments) on your community website and ILS listings. If you do, that’s a red flag for prospects about whether they want to lease with you. 

Does revenue management help with this? Yes. But you can handle it without revenue management – it just takes more time and more work and the desire to learn. 

This is the time to teach your staff about pricing. They shouldn’t just be blindly offering whatever the revenue management software says you should that day. 

Meet Our May ResMan Rockstars

Tina — Assistant Customer Support Manager

Where did you grow up? Japan, Hong Kong and Maryland

When did you join ResMan? This game changing event happened in March 2019 right after relocating to Texas from Philadelphia.

What has been your proudest moment at ResMan? I have several moments and opportunities with ResMan that are rewarding and fulfilling, but the ultimate was earning the opportunity to lead the Support Team.  This group of people are always eager to learn, motivated to guide and help our customers.

What is your favorite ResMan value statement and why?  ResMan is a powerhouse filled with strategic and creative thinkers.  With everyone coming to the table with the Win Together mindset then nothing is impossible. 

Have you ever lived in an apartment? What did you enjoy about apartment life?  I have never lived in an apartment but close, a brownstone in South Philly.  I enjoyed seeing kids playing together all times of the year, but the last few years has reminded me that my “happy place” is with soil surrounding me where I can plant and grow things.

If Hollywood made a movie about your life, who would you like to see cast as you?  If she was still alive Gilda Radner.  She was a quick witted, incredibly strong woman with equal passion for life and laughter.  Of course, her motto of “I base most of my fashion taste on what doesn’t itch” is true to me.  

Lauren — Lead Trainer

Where did you grow up? Fort Worth, TX

When did you join ResMan? July 2017

What has been your proudest moment at ResMan? Every time I am able to see the lightbulb go off for someone, that is my proudest moment. Knowing that they are understanding what I have taught them is such a wonderful feeling.

What is your favorite ResMan value statement and why?  This is a hard one because I love all three! But if I have to choose, I think Win Together might be slightly ahead of the other two. Having a team work together and knowing everything is not on your own shoulders makes working more enjoyable.

If Hollywood made a movie about your life, who would you like to see cast as you?  Betty White

Ben — Product Manager

Where did you grow up? I was born in Dallas, Texas until 10 then grew up in San Antonio.

When did you join ResMan? I joined ResMan on March 3, 2021.

What has been your proudest moment at ResMan? Being able to learn ResMans software and contribute to the company goal has so far been my proud moment.

What is your favorite ResMan value statement and why?  Win together is probably my favorite Resman value. Just like many things in life having a strong team together helps us win together. So far at ResMan I feel that and I hope our team grows.

Have you ever lived in an apartment? What did you enjoy about apartment life?  I live in one currently! I most enjoy not having to worry about maintenance, if something is broken send in a request!

If Hollywood made a movie about your life, who would you like to see cast as you?  Chris Pratt – He would do the best to show my personality.

Chris — Senior Sales Engineer

Where did you grow up? Richardson TX through grade school, then Houston after that.

When did you join ResMan? March 2018

What has been your proudest moment at ResMan? Winning ResMate of the year in 2019.

What is your favorite ResMan value statement and why?  “Win Together” One of my favorite things about playing sports, was the camaraderie that came along with being on a team. ResMan definitely has a team feeling.

Have you ever lived in an apartment? What did you enjoy about apartment life?  Yes—being able to call the maintenance staff when my wife told me something needed to be fixed. 

If Hollywood made a movie about your life, who would you like to see cast as you?  Jason Bateman. The Arrested Development and It’s Your Move version, less so the Ozark version, although I love that show.

Melissa — Collections & Billing

Where did you grow up? Davis, Oklahoma

When did you join ResMan? I joined ResMan February 1 2021.

What has been your proudest moment at ResMan? Proudest moment at ResMan is helping customers fix their billing issues.

What is your favorite ResMan value statement and why?  “We’re all on the same team!” I love being part of a group where everyone works together.

Have you ever lived in an apartment? What did you enjoy about apartment life?  We lived in apartments when my kids were younger, and I loved having a pool.

If Hollywood made a movie about your life, who would you like to see cast as you?  If Hollywood made a movie about my life I would want Reese Witherspoon to be cast as me, she seems to be a caring person in the movies I have seen her in.

Shiela — Affordable Quality Analyst

Where did you grow up? Bicol (a province in the Philippines)

When did you join ResMan? January 25, 2021.

What has been your proudest moment at ResMan? Being mentioned as a Rockstar. lol

What is your favorite ResMan value statement and why?  Win together because it’s great to work with others towards a shared goal. Teamwork wins!

Have you ever lived in an apartment? What did you enjoy about apartment life?  Nope. I lived with my parents (and now with in-laws). It’s a Filipino culture that everyone’s sticking together under one roof. And parents really have hard times being separated from their children, I’d say. #Asian LOL

If Hollywood made a movie about your life, who would you like to see cast as you?  I’d pick Jennifer Lawrence lol.

Wes — Software Developer II

Where did you grow up? East Texas

When did you join ResMan? March 2019

What has been your proudest moment at ResMan? ResMan has consistently recognized and appreciated each Developer’s contributions, strengths and autonomy and does not try to fit us into a box and I am proud that the quality of my contributions has not undermined the trust required to do that.

What is your favorite ResMan value statement and why?  With respect to Own What You Do and Believe In The Impossible which I think are both worthy and necessary ideals, one can imagine slipping into a sort of dark side of either one if taken to excess. I would choose Win Together because I can’t imagine a way it could go wrong and because the alternative is a perennial temptation.

Have you ever lived in an apartment? What did you enjoy about apartment life?  Location, location, location.

If Hollywood made a movie about your life, who would you like to see cast as you?  Betty White

How to Stay on Top of Evolving Affordable Housing Regulations and Legislation

Due to the complexity of affordable housing compliance and ever-changing regulations, keeping on-site teams engaged is essential. During the peak of COVID, it became even harder, as the number of updates increased. Industry professionals also couldn’t easily connect at events. In-person conferences and events allowed affordable housing professionals a chance to network and learn from their peers. For newcomers, properties could offer in-person training for their software and other systems.   

Because so many conferences and training sessions have moved online, it’s been hard for on-site staff to stay engaged and connected with the affordable housing community. Not only is this isolating for all of us who miss in-person events, but it can also be difficult to keep up with changing affordable housing compliance regulations. 

Affordable Housing Compliance Tips and Resources 

–  Sign up for as many news email push-alerts as you can. The U.S. Department of Housing and Urban Development (HUD), the National Council for State Housing Agencies (NCSHA), the National Affordable Housing Management Association (NAHMA), the Council for Affordable and Rural Housing (CARH) and others offer this information. You might be hit with the same news more than once, but it’s a sure thing you won’t miss it. 

–  Organizations that focus on affordable housing, such as NAHMA and CARH, updated resources on their websites, and many will deliver daily or weekly newsletters that cover evolving topics, legislation and regulations. These organizations also host timely webinars that feature leading experts in their niche housing markets. 

–  ResMan’s affordable housing team also tracks important news affecting affordable housing and provides timely updates in our Compliance Dashboard to help teams keep up with changing guidance. 

–  There are many qualified HUD trainers. Identify those who address your responsibilities and follow them on social media, such as LinkedIn and Facebook. For me, I find that Mary Ross has a lot of valuable information to share. She provides clients with high-level consultation and advice on how to succeed when managing properties set aside for low-income families. 

–  Join your local apartment association or chapter of a national associations to gain invaluable insights. 

resman-affordable

Affordable Housing Associations to Follow or Join

The National Affordable Housing Management Association (NAHMA) is one of the leading voices of affordable housing management and advocates for multifamily affordable housing professionals in the U.S. Joining NAHMA is one of the best ways for professionals in our industry to plug in, network with peers and get access to a variety of educational resources. 

The Council for Affordable and Rural Housing (CARH) is a national non-profit focused on supporting affordable rural housing professionals. They offer a variety of educational resources and industry insights. 

The National Council for State Housing Agencies (NCSHA) is a leading advocate for affordable housing and represents the housing finance agencies of every U.S. state and territory. They provide education and advocacy for housing finance agencies and offer a variety of resources on their website. 

As we all work our way through these evolving and sometime disrupted times, connecting and staying in touch with important resources will make your operations go more smoothly. 

Key Takeaways from Our Eviction Moratorium Webinar with NAA’s Greg Brown

The ongoing and somewhat unpredictable changes in the national eviction moratorium during the past year has created a confusing – if not economically painful – experience for apartment operators and their residents.

Greg Brown, Senior Vice President, Government Affairs, at the National Apartment Association, addressed the current situation, what might be coming soon, and also how we got here in the first place during the webinar “The Eviction Moratorium: Where Things Stand and How to Have an Impact,” presented by ResMan.

He helps us to understand some of the partisan, bi-partisan and legal implications, as well as the advocacy efforts that NAA has helped our industry take in response to a situation that, according to estimates by the Urban Institute, has 10.25 million renters falling behind on $57.3 billion in rent by January 2021. The average amount of past-due rent per person is $6,000.

CDC Evictions Order Invalidated

On Sept. 4, the Centers of Disease Control (CDC) issued a new order about five weeks after the CARES Act’s national eviction moratorium expired. The difference is that the CARES Act moratorium applied to federally backed properties only and the CDC order applies to all residents of rental properties who make less than $99,000 per year for individuals and $198,000 per couple.

On May 5, a federal judge invalidated that moratorium, ruling that the CDC exceeded its authority on Sept. 4 with its ban of resident evictions. The CDC argued that its rule was to safeguard the country against the pandemic.

Hours later, the same judge placed her decision on hold to allow time for the appeals process to take place, putting the industry, and the country, back where it was in March of 2020 when the temporary hold on evictions was included in the Coronavirus Aid, Relief and Economic Security (CARES) Act.

With each eviction moratorium decision, as many as five federal agencies have been involved in fine-tuning and clarifying of its positions. The current appeals could go as far as the U.S. Supreme Court, Brown says.

One important aspect is that every court ruling to this point only applied to their individual plaintiffs, and did not have nationwide implications, as some have inferred.

“As for the District court ruling from Alabama, that judge actually vacated the CDC order nationwide,” Brown says. “however, as it is stayed, we’re basically stuck right where it was when the CDC put it in.” Property management professionals are urged to speak to their legal counsel to get a greater understanding of the CDC eviction order and how they appropriately comply.

Mounting Counter-Opinion Could Have Clout

NAA was the first national association to file a lawsuit challenging the CDC’s order, others included National Association of Home Builders and National Association of Realtors. Once it was put into effect, NAA met with its contacts in the White House and they were receptive.

“Supportive rulings in the multifamily industry’s favor are building; however, a final resolution will take time,” Brown says.

To hear more about the possible outcomes and Brown’s thoughts on how long the moratorium will last, watch the on-demand webinar.

NAA Advocates, Educates about Eviction Costs

Brown says that since the CDC order is an Administrative action, Congress does not have direct impact on its extension. However, industry members can make a difference by speaking with their members of Congress and delivering real-life, on-the-ground stories about how these rulings have affected their businesses and their residents. The intent is for Congress to take those stories to the Administration and advocate for letting the CDC order expire on June 30.

NAA has an active grassroots campaign for industry professionals so that they can share their stories with Congress in a unified way.

“The templates include fill-in-the-blanks so that our members can provide details and other specifics about what’s happening to them, and those emails can be targeted directly to their members of Congress,” he says.

In addition to the grassroots campaigns to encourage member outreach, NAA has created a Key Contact Program, where it has reach out to ask members if they have any personal relationships with members of Congress, so they potentially could help to open doors to direct lines of communication to the Senate and House of Representatives.

Learn how you can join your local NAA affiliate to have the greatest impact.

ERAP Brings $50 Billion in Aid to Renters

The federal government also has created an Emergency Renter Assistance Program, which includes $50 billion in support funds that have been distributed to the states. ResMan wrote about this program in its blog, and this entry includes links to each state’s application.

Each state’s administration of the program differs, and states are having various degrees of success with this rollout. Brown says that Virginia and Colorado are states with strong rollouts so far. Texas has improved dramatically, and Pennsylvania has done reasonably well. The jury is out on other state programs.

Watch the on-demand Eviction Moratorium webinar to learn more.

Understanding Today’s Federal Rental Payment Assistance Programs

The federal government’s seemingly never-ending eviction moratorium made headline news twice this past week when a federal court ruled the national eviction moratorium was invalid, only to have another court issue reverse that decision for the time being. 

Apartment owners and operators continue to work to manage what’s coming next while many residents stay put in their apartments, owing millions of dollars in back rent.  

Debt is piling up all over the place for owners, too, and there is one solution that could make a difference – namely those needles in the recently allocated $50 billion-plus haystack from the Emergency Rental Assistance Program (ERAP) and The Consolidated Appropriations Act designed to support of eligible renters in need. 

I say needle because figuring out a way to get access to these funds is a 50-state journey, as each has its own criteria. Some operators have not even begun to look into the process which isn’t wise.  The allocated funding is first-come, first served.  

Solving this big problem is both good for apartment owners and their residents. And yes, you can “apply” on behalf of the delinquent renter and get those applications taken care of.  

Smaller owner-operators were impacted the most over the last 12 months; the smaller the portfolio the bigger the impact from uncollected rent.  For an owner with a smaller unit count, even a handful of residents who do not pay their rent for even one month put a strain on the owner. Several months of back owed debt starts to impact the owner’s ability to maintain the property, or worse, pay their mortgage.  But rent is rent, and income is income.  As of the end of 2020, the average delinquent renter owed approximately $5,000. So, even if you only have a handful of them, it pays to follow up and work out a payment plan for them. 

To Reach Residents, Try a New Approach 

I hear from operators that residents are ghosting them, even though they are trying to help them.  Sincere, direct and persistent resident communications is the key to building valuable and trusting relationships with those who are behind on rent.   

Those who have become chronically delinquent might not be responding – and in fact, avoiding you.  Consider referencing news updates about the eviction moratorium via text or email to create a new sense of urgency.  If standard outreach approaches, such as email or texting, aren’t effective, you need to consider new techniques to connect with them.   

Visiting them at their apartment home is a good first option. And for those who have regained employment – and keep 9-to-5 hours – it’s worth adjusting operating hours for some of your staff so that they can visit residents in the early evening, perhaps after 7 p.m. 

If this timing isn’t right, another option is contacting them by phone. Use the “emergency” contact number they gave you if you have to.  

Finally, during my more than 20 years in property management, including spanning three recessions, one successful approach was to leave residents notes that tell them they have a package to pick up at the leasing office. When they visit us, we give them a gift card (it’s the “package”), but more importantly, it creates an opportunity for the property manager to speak to the resident about qualifying for financial relief. 

It’s at this point when you can help them fill out the application. Many in the industry we speak to aren’t aware of how to apply for this aid. Each state has its own criteria and process. Here are a few resources to leverage: 

LeaseLock’s State-By-State Application List 
Emergency Rental Assistance FAQs 

Onsite staff are going to have a bigger “lift” on this – relying on the resident to know what to do is simply unrealistic.  If owners and operators are struggling to navigate the process to apply for funds, imagine how difficult it must be for the renters.  

Property management companies and their residents need to understand this and more importantly, how to access it. Companies’ corporate headquarters should appoint someone who is expert at navigating this renter support fund procedure.  

multifamily-cta

Don’t Let Your Residents ‘Shut Down’ on You 

It’s been my experience that when renters begin to fall behind on their rent, their tough times spiral downward, and they shut down. Don’t be surprised if they display helplessness to you, and then even give up. Unfortunately, they might decide it’s best to move out, but that’s not a good solution and will harm their overall economic viabilities.  

For another group of renters, they were receiving not one, but two stimulus checks. Some were getting significant bumps on top of their state unemployment benefits for a six-month period last year. And every day, they heard from the media that they didn’t have to pay rent because the moratorium protected them. 

Misinformed residents who “feel they are safe in place” because of the moratorium, based on what they see and hear in the news, are often the ones who are most in need of accessing federal support funds through their states. 

Unfortunately, some spent their stimulus dollars to pay down credit card bills or car payments. But really, their rent payment is the biggest check they have to write each month, and it should be a priority, or else their credit score and rental payment history will be hurt. 

Some residents simply take too much of a short-term outlook on their finances and not a long-term one. They might be thinking, “Oh, another stimulus is coming. I’m all right.” 

Owners: Don’t Have a False Sense of Security 

We see in the ResMan database that more residents engaged in rental payment option plans with their owners in the first quarter.  We saw 400 to 500 new repayment plans initiated. That’s a lot more than the .001 percent from a year ago. 

Owner/managers, too, shouldn’t feel they are above it all and don’t have to participate in (the name of the support plan). In recent months, their occupancy and collections might be increasing, but unpaid rent remains and it’s important to address it. 

“Oh, this wasn’t as painful as we thought it would be,” is not the right mentality in today’s market. Don’t let the same sense of urgency you had months ago, go away. You need to get engaged with your renters and be relentless. If they move out, it’s not good for you, either. 

One thing not to do is criticize your residents on social media. You should not be callous about their situations and not rush to judgment about their behaviors because you don’t know the whole story. Therefore, if you get a chance to do so, listen.