The 2022 Performance and 2023 Forecast for Multifamily

In February of 2022, InhabitIQ’s Elizabeth Francisco and ALN’s Jordan Brooks sat down to talk about the 2022 forecast for the economy, specifically within multifamily. Our forecast was officially “sunny with a chance of rain,” as we were cautiously optimistic. As it would happen, some of those rainclouds are beginning to loom a bit more as properties finalize their budgets for the 2023 fiscal year. It’s important to note, however, that this is not frightening or unmanageable, but we invited Jordan back to take a look at the data and give insight into what’s to come and how to prepare for 2023. 

2022 Multifamily Performance 

2022 started off strong, though a bit of a downtick from the peak occupancy rate in October and November of 2021. Last fall, we saw the unusual trend of strong occupancy growth alongside strong rent growth. As we normally see those numbers at odds, this was unusual though it could be attributed to several factors. In the end, we’ve seen occupancy decline since its peak with the seasonal bounce in demand and has only reaccelerated the decline with the slowdown of deliveries this summer. 

Rent and Occupancy for Oct. 2019 to Sept. 2022 

Lease concessions grew until the first quarter of 2021 and have only picked up more recently in the last month or two. You might be wondering if apartment demand has been down, why have we still seen 8.5-9% rent growth year to date? Some of that has to do with bringing high average occupancy into the new year and it’s taken some time to work through that. However, as we are moving into the winter, a lot of that excess occupancy has been used, as we still have 50-80% basis points excess compared to when we went into the pandemic.  

In 2022, we’ve seen monthly net absorption has trailed new supply all year, which is a vast difference from the middle of 2021 where occupancy was clearly outpacing the production of net new units. The decline of demand in 2022 has impacted all assets, however the Class C and D assets have the most pronounced shortfall. 

New Units vs Absorbed Units Oct. 2019 – Sept. 2022 

It’s important to note when we’re talking about how the cost of capital is going to affect development, the net new units that will be available in the next two years have already begun development and broken ground. So, the slowing in development that is currently taking place will affect units that are supposed to be ready in three to five years as those are the ones under planning and financing now. 

What Has Changed & What to Watch 

The multifamily industry had over 600,000 net absorbed units in 2021, leaving many wondering why there was so much demand and how so many new households came about. One reason could be attributed to the “failure-to-launch” age range of 25-34 making a change between 2020 and 2021 as there was a clear decline in this age cohort living at home between those years. This is the first decline since 2005. It’s possible this decline came after many of these individuals found a need for space after the first year of COVID-19. Stimulus payments might have also helped or encouraged individuals to find living quarters of their own. 

Young Adults Living at Home 1990-2021 

Jobs and Labor Market 

Moving to the employment side of the economy, the labor market remains tight although we’ve seen big corporations doing layoffs toward the back half of this year. The demand picture has changed for multifamily but the shoe that hasn’t dropped yet is the softening of the labor force. When that does occur or when unemployment starts to rise, this will affect multifamily and is important to keep an eye on in the future. It’s possible that the markets with a more diversified employment base might be in a better position to weather the storm. 

Sunbelt states saw a big wave of supply and new demand as people moved to these more affordable cities. Some might think that Sunbelt states have lost some of their luster since they’ve seen rent growth and affordability go up since these migrations. On the contrary, while Sunbelt states have seen some of the highest rates of rent growth, the difference is marginal and these cities started at a lower point than other cities. If you compare cities like Orlando and Tampa to Los Angeles and Chicago, the latter has declined since the pandemic whereas Florida cities have seen a robust and inclining labor force since COVID-19. 

Labor Force in Representative Cities Sept. 2019 – Jul. 2022 

US Disposable Personal Income 2000 – 2022 

Credit Card Debt Across the U.S. 

Over the last few months, many of us have heard that Americans had a record amount of money in their bank accounts- something we were not convinced was totally accurate today. Surprisingly enough though, disposable personal income reached an all-time high in 2021. However, it dropped as quickly as it spiked. Disposable income is still higher than it was in 2019. One must wonder how prolonged inflation will impact the health of consumers’ bank accounts. Access to cash and credit is important for our renters as they try to manage through a tightening economy and possible recession, which will certainly impact their housing decisions. 

Most of us have at least some of it, but collectively, we’ve reached a staggering high point when it comes to credit card debt. Americans have accumulated an absolute mountain of credit card debt in 2022 — $887 billion, to be exact. That’s a $46 billion jump from $841 billion in the first quarter of 2022. With the increase, Americans’ credit card debt stands $40 billion below the record set in the fourth quarter of 2019, when balances stood at $927 billion. Thanks to rising interest rates, stubborn inflation and myriad other economic factors, it’s likely a matter of time before credit card balances surpass the 2019 record.    

Average Credit Card Debt from Jan-Feb 2022 Credit Reports 

While credit card debt is growing again at a staggering rate, it is important to note that only 1.81 % of CC accounts are 30+ Delinquents, up from 1.66% in 2Q22.   

Annual Multifamily Absorptions and Renewal Rates 

Renewal rates hit a new record in the first quarter of 2022 at 58.4% before moderating to 56.9% in the second quarter. The higher renewal rates can easily be attributed to the net new lease rate. The rent on a unit vacated and then leased to a new tenant increased, on average, 8.5%. Earlier in the year some markets were as high 18%. Comparatively, a tenant renewing a lease in the same quarter saw an increase in rent of 10.8%. 

At the peak of renewals, the gap between effective and net new rents was around 11%, which equated to built-in rent growth for this current year and made for an attractive offering to investors. If we look at where we are today, the picture looks very different. With Net New lease rent growth slowing considerably, you need to think about your approach to renewal from this point forward, weighing out the turn cost/renewal rent and net new rent.   

Transaction Volume 

The Fed’s use of interest rates to battle inflation is a double-edged sword for multifamily. First, inflation drives up each new unit’s cost, impacting existing and new development projects. New units initially forecasted to come online in 2022 have slowed as GMs have to deal with increased labor costs and materials. Slowing inflation would benefit new development costs.  

On the other hand, with each rate hike, the building & financing of apartments have become more expensive, making it harder for new deals to pencil out.  In addition, some properties have shared that the cost of long-term borrowing has increased significantly since 1Q22. 

U.S. Multifamily Sales Volume, Price per Unit 

CRBE, Freddie Mac, and others are all forecasting the same thing, a slowdown in transaction volume for the remainder of 2022. 2021 was a record year for transaction volume, and 1H22 started off very promisingly. However, the back half of the year could look different than initially forecasted.  

According to Yardi Matrix data, overall national multifamily sales volume surpassed $101 billion in the first six months of 2022, outperforming the $67 billion volume registered in 2021 during the same interval, while the average price per unit rose 28.4 percent year-over-year, to a new high of $218,377. The number of assets that traded also increased, from 2,362 properties during the first half of 2021 to 2,961 in 2022.  

Transaction activity will continue, but capital has become more selective and focused on lower-risk profiles; buyers should be prepared for increased pricing, lower proceeds, higher reserves, or personal guarantees. There doesn’t seem to be much of a path to multifamily having another record number of transactions by year-end.  

Looking Ahead – Q4 2022 & Early 2023 Indicators 

Many are wondering how likely a recession is and if it hits, when that could or will happen. Wall Street Journal predicts by Q4, there is a 63% chance we are heading into a recession in the next 12 months. It’s likely we will see significant signs of this come this time next year. 

Projected Fed Funds Rate 2022-2025 

A few short months ago, the Fed had projected rate increases under 4%. The Fed has raised its projections and now believes interest rates will need to increase to 4.4% by end of 2022, 4.6% by EOY 2023 and don’t expect to cut rates until 2024. Rising interest rates also impact the new development of much-needed units to meet the housing demand.   

Interest rates impact a lot: consumers’ mortgage rates, student loans, auto loans, and credit card rates.  Credit card debt, as mentioned, is already increasing for Americans and all of these things become a contributing factor as renters assess what they can pay for rent.   

Mortgage rates have already gone up from Jan 21 (2.65%) by nearly 300% (current rates sit at 6.9%). We have not seen mortgage rates jump this quickly since 1977 (8.65%)-1981(18.6%). 73% of mortgage borrowers are locked in at rates below 4%, creating an extremely powerful incentive to stay in their current homes long-term.  

You can say the same thing about long-term renters, the rising interest rates reduced purchasing power from 400K down to 274K, keeping the monthly mortgage under 2K at $1,784. What keeps homeowners in place is the same thing that will keep renters in the rental market. As interest rates continue to rise, the home buyers purchasing power will continue to compress, which I think incentivizes renters to also stay put in the rental market. 

Forecasted National Multifamily Trends 

Multifamily New Units, Absorption, Occupancy, and Rent Growth 2000 – 2028 

In the nearer term for 2023 and 2024, new supply will be more active than in previous years and will pressure occupancies downward. In general, a return to 3-5% rent growth is a reasonable expectation as well as completions on the higher end of the scale of what we’ve seen over the last decade. 

Housing Supply Likely to Remain Constrained 

According to the National Association of Homebuilders, the Housing Market Index (HMI) is currently at the lowest point since the early days of the pandemic. While high mortgage rates have helped offset recent multifamily rent growth in terms of comparative affordability, single-family permits, starts and sales are all down year over year. It’s likely we’ll see more buyers and sellers remain on the sidelines for the near term. The good news is the lack of good, substitute affordability should provide some level of support for multifamily demand. 

While there are fears around the looming recession, there are not a lot of new surprises for multifamily in the upcoming months. Ultimately, there’s a lot of data to focus on in the upcoming months as you’re finalizing your budgets for the year 2023. As multifamily saw the Great Recession had much more looming data for the rental housing industry a decade and a half ago, we are cautiously optimistic for the industry for the future. 

PropTalk: LIVE! From NAHMA – Cocktails & Compliance Episode 7

About the episode:

Rue Fox and Janel Ganim are coming to you LIVE from NAHMA to give updates on the Affordable Housing industry, as well as hearing from industry leaders themselves. Peter Lewis, Executive Vice President of Property Management, the Schochet Companies, Anthony Sandoval, President & CEO of WSH Management Inc., and Jennifer Wood, Vice President of the John Stewart Company all shared their insights into employee retention and recruiting, legislative changes, and more! Cocktail of the episode? Mimosas for our morning session!


About ResMan: ResMan delivers the property management industry’s most innovative technology platform, making property investments and operations more profitable and easier to manage. ResMan’s platform unlocks a new path to growth for property management companies that deliver consistent NOI improvement and brilliant resident experiences easier than ever before. To learn more about our platform, visit https://learn.myresman.com/proptalk/.

Watch it here:

The Impact of the Midterm Elections on Rental Housing Affordability 

Midterm elections have come and gone and while some measures and races have yet to be called, it seems like there is a good sense of the likely impact on rental housing in the coming years. Rent control was the main topic around rental housing in these elections and NMHC recently reported what 2023 and beyond could look like in some key states:  

Governor Races Will Have Some Impact on Multifamily 

Arizona, Maryland and Massachusetts’ gubernatorial races flipped from Republican to Democrat, though Arizona’s Republican candidate, Kari Lake, has not conceded due to how close the race was when Arizona called it. Maryland’s Democratic nominee Wes Moore will take over Republican Governor Larry Hogan’s position. According to NMHC, Maryland does not prevent local regions from implementing rent control. Some Maryland counties are considering rent control measures at present. 

Massachusetts saw an easy victory with their current Attorney General, Maura Healey (D), who will replace Republican Governor Charlie Baker after he chose to not seek re-election. Healey supports incentivizing communities to fulfill housing supply by building new developments around public transit. She does, however, still support regions adopting rent control policies.  

Nevada finally called their gubernatorial race on Friday and Sherriff Joe Lombardo won by a slim margin for the Republican party. His opponent, Democratic incumbent Steve Sisolak was supportive of rent control efforts and had mentioned statewide rent control in 2023 legislation. According to the Las Vegas Review-Journal, Lombardo will “implement a long-term plan to build affordable housing infrastructure.” He wants to “streamline permitting and licensing for housing projects and will direct the Governor’s Office of Economic Development and the Nevada Housing Division to provide incentives and defer payments on land that would be paid after development.” 

Michigan and Minnesota’s Potential Impact on Rental Housing at the State Level 

Nearly all states held elections for open seats in their state Legislatures. Most seats continued to be controlled by the same party, however, Michigan and Minnesota seemed to have the biggest changes.  

For the first time in four decades, Democrats will control the governor’s office and the state seats in Michigan. Michigan currently prevents local legislation from implementing rent control. Detroit and other cities’ housing affordability crisis, however, might mean changes to that in the future. 

Minnesota also has rent control preemption in place and Democrats are now in control of the State House, Senate and governor’s office. In 2020, St. Paul and Minneapolis voters notably leveraged exemptions to implement rent control. With Democrats controlling the full legislature, changes to rent control may happen. 

Local Ballots and Measures 

Many localities had rent control on the ballot this election and areas like South Las Vegas, St. Petersburg, and Tampa all voted against it. However, states like Maine, California and Florida had a different outcome. 

Approved Local Ballots affecting rent control were as follows: 

Portland, ME – a “tenants’ rights” measure was approved, and the referendum further limits annual rent increases to 70 percent of the increase in the Consumer Price Index. The ballot also includes a 90-day notice for any lease termination, a restriction of security deposits to amounts equal to one month’s rent and a prohibition on fees for applications, credit reports and background checks. 

Pasadena, CA – According to NMHC, the measure would limit rent increases to 75 percent of the annual increase in the Consumer Price Index, establish a Pasadena Rental Housing Board and would provide guidelines around “just cause” evictions. The votes were close with “Yes” only leading by 149 votes and is still too close to call as of now. 

Santa Monica, CA – In Santa Monica, a measure was approved to lower annual rent increase limits from 6 percent to 3 percent. A second measure prevents rent increases during a state of emergency declared at the federal, state, or local level.  

Richmond, CA – In Richmond, voters approved the further limiting of rent increases to 3 percent. The full measure can be found here. 

Orange County, FL – Voters approved a measure that would limit rent increases to 9.8 percent over the next year. However, a State Circuit Judge previously ordered election officials not to certify the results of the vote, declaring the ballot summary to be misleading. NMHC predicts Florida, despite their current prohibition of rent control, may revisit the issue in 2023. 

Regardless of the outcomes, rental housing and affordability is a hot conversation across the country. While many legislatives see rent control as an easy response, it is putting a band-aid on a gaping wound. The flawed policies, though they may have good intentions, will only create further housing shortages. Multifamily should be prepared to fight back on rent control measures when they come up.  

ResMan Expands Marketing Capabilities with New CRM, Chatbot, and Contact Center Solutions  

ResMan Expands Marketing Capabilities with New CRM, Chatbot, and Contact Center Solutions  

Plano, TX, October 31, 2022 – ResMan®, a leading property management SaaS platform provider, today announced the extension of the ResMan platform to include CRM, Chatbot, and Contact Center. These new capabilities complement the platform’s modern, high conversion website solution, allowing property management companies that use the ResMan platform to increase lead-to-lease conversion and reduce marketing spend while offering renters the most seamless and engaging rental experience. 

“Our focus continues to be on enabling our customers to succeed. With our new CRM, Chatbot, and Contact Center capabilities, we are making it easier for customers to fill vacant units and maximize effective rent while reducing marketing spend, so they not only run better, but also operate more profitably,” said Michael Dunn, CEO, ResMan. 

Beyond these new Marketing capabilities, ResMan has also recently introduced ResMan Utilities, which includes utility billing, invoice processing and vacant unit cost recovery (VRCU) capabilities, as well as advanced budgeting and reporting modules and a new applicant screening solution. The expansion of the platform, as well as enhancements that the team continues to make to the platform’s core accounting and operations capabilities, are allowing more and more mid-sized property management companies that have been trapped using dated, piecemeal technology solutions from providers that focus their attention on serving the top end of the market to make the switch to ResMan’s modern, easier to use and more fully integrated platform.  

“2022 has been an incredible year of growth for the ResMan platform,” Dunn continued, “both in terms of the breadth of capabilities that we now offer and also the number of new customers that have made the switch to ResMan. We’re hearing over and over again from organizations that last saw ResMan in 2019 how amazed they are at the breadth and depth of the solution, as well as the passion with which our customers talk about ResMan and the impact our technology and customer support have for their business.”    

The full ResMan platform, including the new CRM, Chatbot, and Contact Center capabilities, will be featured in ResMan’s booth #429 at NMHC’s OPTECH 2022 Conference & Exhibition which takes place November 1-3 at the Wynn Resort in Las Vegas.  

For those that are unable to make it to Vegas, ResMan will also be featuring CRM, Chatbot and Contact Center, along with our websites solution in a webinar on December 8th at 1pm CT. 

ABOUT RESMAN 

ResMan is the preferred growth partner that drives profitability and efficiency for nearly a thousand property management companies across the U.S. ResMan delivers the property management industry’s most innovative technology platform, making property investments and operations more profitable and easier to manage. ResMan’s platform unlocks a new path to growth for property management companies that deliver consistent NOI improvement and brilliant resident experiences easier than ever before. For more information, visit us at myresman.com or engage with us on Twitter, LinkedIn, or Facebook.  

10 Fall Activities To Create More Community and Referrals at Your Properties

Fall is officially here and while it’s a slower time of year for leasing, it could not be a more important time for establishing community and connection with your residents ahead of the spring rush. Referrals and renewals are a huge win for properties and laying the foundation for peak season most certainly starts now.  

Fortunately, with holidays, it can be very easy to come up with inexpensive yet engaging events and activities to get your residents together during the slower part of leasing season. You can even open the events and activities to those living outside of the property, bringing in prospects to witness up-close what living in your community looks like. We came up with ten fall activities to get you started: 

Trunk or Treat and Costume Contests 

Halloween is only a few weeks away and many residents need a place to take their kids trick or treating. Instead, you can host a “Trunk or Treat” in a specific parking lot, where tenants can decorate their trunks and provide candy as a unique and different approach to door-to-door trick or treating. Get creative! Let people bring their pets (if you’re a pet-friendly property) and encourage residents to have candy and puppy treats available. You can also hold prizes for trunk decorations, like Spookiest Trunk and Most Artistic Decorations, or costume contests for kids and pets, too! 

Pet Parade 

For pet-friendly properties, anything involving pets is a fan favorite for residents. Let residents show off their furry family members in a pet parade at your property. You can theme your pet parade like the Met Gala, giving residents a chance to get creative in dressing up their bpets or decking out their “rides.” Offer various prizes for Cutest Pet, Most Creative Costume and Best Matching Costumes for those who dress up with their pets. 

Outdoor Movie Night 

Everyone loves a good movie night, but especially an outdoor one! Put on a classic favorite or family-friendly movie on a projector at your property. Bring a popcorn machine and sodas and invite residents to bring their own chairs or blankets to enjoy a film outside.  

Football Watch Party 

Most people love to watch football on the weekends. Similar to the outdoor movie party, pick your local college or NFL team and put it on for residents to cheer on the team together. You can easily offer popcorn and drinks for those to indulge in or celebrate potluck-style, letting people bring their own football-favorite treats and meals to enjoy while they watch.  

Ornament or Cookie Decorating Competition 

Whether you host it at your property or let participants get creative on their own, an ornament decorating contest will give families and residents the chance to DIY together. Let them submit pictures or bring the ornaments into the office to decorate a tree for the front office to add some flair to those coming in to check out your property. If ornaments aren’t a great option, decorating cookies can be a great alternative! 

Photos with Santa 

If Christmas is a widely celebrated holiday for your residents, this one will be a favorite. Have a time after school or on the weekend when kids or pets can come get a photo with Santa. Set an easy backdrop in the leasing office for those to come and go to ask Santa what they want for Christmas and snap a photo with a high-quality phone or DSLR camera on hand. Make the photos available in a Dropbox via email or post the photos on your Facebook for residents to snag for themselves. 

Patio Decorating Contest 

A classic and easy event to host, a front door, window or patio-decorating contest is sure to bring out creativity and excitement for residents as they decorate for Halloween or the December holidays. You can also offer small or more incentivizing prizes for Most Creative, Spookiest Décor, and more. 

Gift Wrapping at the Office 

Many know the struggle of wrapping a multitude of gifts – and doing it well. Offer a handful of days for residents to come by with their gifts to wrap. You can provide wrapping paper, nametags, bows, ribbons, and other supplies needed to wrap gifts for the holidays. Have employees in the front office help those who struggle with the gift wrapping. This is a creative and useful way to enhance relationships between the property managers and their residents.  

Holiday Clean Out & Give Back 

Nothing says holiday season like sharing kindness with others. Encourage residents to clean out their closets and pantries filled with dry goods to create a clothing or food drive for a local charity to donate to instead of holding onto unneeded items. This not only promotes giving back but also checks off a common New Year’s Resolution: decluttering their space.  

(Legal and Safe) Fireworks for NYE 

If it’s legal in your municipality and there is a safe area to do so, fireworks are a great way to get people together to ring in the New Year. Provide sparklers for kids and a water bucket to put them out in. Set up a campfire pit and let kids make s’mores. Offer hot cocoa to stay warm, too. And don’t worry, this can be family friendly. No one will notice if you set the fireworks a bit early for the young ones. 

It’s a great misconception to think the fall and winter months aren’t a perfectly opportune time to connect with residents and prospective tenants. Encouraging residents to invite their friends will also create an inviting living experience for those looking for a place in the near future, proving to those interested that there is more than just housing that you are providing, but also a community.

NMHC 2022 Fall Meeting Recap

This year’s NMHC Fall meeting drew over 700 attendees, reflecting general concerns in the industry around the economy, the midterm elections, rent control, and how the housing industry could be impacted going into 2023. Over the course of three days, we heard from economists, election analysts, and legislators who weighed in on the topics that are top of mind for multifamily owners, operators, and developers.  

Recession: to be or not to be? 

The conference kicked off with remarks from Mark Zandi, Chief Economist with Moody Analytics to address the most pressing concerns of the attendees. Are we in a recession? If we are not in one, will we be in one soon? If we are in or enter a recession, how bad will it be? 

Mr. Zandi pointed out that the debate as to whether we ended the second quarter going into a recession stems from the reality that the US economy had two consecutive quarters of negative gross domestic product (GDP). This would usually meet the definition of a recession. However, other economic factors, such as a strong labor market and corporate earnings growth, do not align with what you would expect to see if we were in a recession as of the end of Q2. There are still many unfilled positions open across the country and layoffs remain relatively low. In Mr. Zandi’s opinion, we were not in a recession at the end of H1; however, he pointed out that a recession is likely in the next six to eighteen months. 

If and when we enter a recession, it’s important to note consumers are in better shape than in prior recessions. Mr. Zandi shared that he viewed consumers as a firewall, being that we are between an economy that continues to grow versus one that declines. Government stimulus, low unemployment, and low-interest rates have contributed to the American consumer building up their savings. He shared that the average homeowner today has $185K in equity which is up from $150K in prior years.  

While inflation showed small signs of slowing over the summer months, specifically in gas prices, inflation is still high. This led to another interest rate increase of 0.75% by the Federal Reserve – a smaller increase than some had expected. The rate at which consumers continue to spend or to the degree they pull back from spending will play a key role in whether we enter into a recession or not. 

As to how bad a recession could get for the American economy, Zandi was still cautiously optimistic. He pointed out the current health of the financial system. “American businesses are in great shape,” Zandi stated. “Leverage is low, interest coverage ratios are good, banks are well capitalized, and liquidity is strong which is very different from the way the US has entered previous recessions. 

Mr. Zandi pointed out that if we start to see job loss, things can take on a life of their own as consumers start to lose confidence. A result of rising interest rates means that companies will see their earnings decline. Historically, rate hikes have led to a recession. 

While Mr. Zandi was cautious not to state whether we will or will not enter a recession, the attendees at my table seemed more inclined to believe that one has already begun, referencing the slowdown in housing due to rising interest rates, recent articles indicating that the consumer sentiment index has dropped, and the volatility of the stock market that would usually be indicative of an impending recession. If we continue to maintain strong employment and resilient corporate and personal spending, a recession may be more short term than long term. Most agreed that the apartment rental industry remains better suited to weather the storm. 

Solutions for the Apartment Supply and Demand Imbalance 

Moderated by Caitlin Walter, Ph. D. the Vice President of Research for NMHC, panelists Ethan Handelman the Deputy Assistant Secretary for Multifamily, HUD and Daniel Hornung, Special Assistant to the President for Economic Policy at the National Economic Council under President Biden. 

The relevance of the housing supply and demand imbalance was front and center as rent control activists interrupted the sessions earlier in the day. Mr. Handelman shared that the Housing Supply Action plan is a top priority to the administration, as they understand it is a central issue for the economy. Housing affordability challenges not only hold back families’ economic mobility, but they also hold back the economic progression of our country and our economy overall. He went on to acknowledge that if we are going to address the housing affordability challenge, we need to address the root cause of it which is a lack of supply in this country, particularly that which is affordable. “We need to use all of the tools that we can” at the federal, state, and local level as well as the private sector with nonprofit partners,” Handelman said. 

Handelman also touched on some of the aspects of the Housing Supply Action Plan, specifically with zoning and land use.  

“Through the bipartisan infrastructure law, we have identified around $7 billion in competitive grant programs where we now have integrated a [zoning and land use] criteria for state and local governments that are applying,” Handelman said. “If you have taken action to improve your zoning and land use policies at the state and local level, it’ll be more likely that you get this funding.” 

The second area Handelman brought up is looking at what they can do administratively and legislatively to improve existing sources of federal financing for affordable housing development. In terms of their administrative actions, the focus is really on what the administration can do to make LIHTC more available and easier to use. Handelman shared that, in the coming weeks, the Treasury Department will put out a regulation on income averaging, which will make it easier for developers to use LIHTC to build housing that can be used by mixed income households as well as rural areas. 

Lastly, Handelman pointed out there’s additional work that could be done in partnering with multifamily leadership as well as state and local governments. “We wanted this to really be an acknowledgement that we need effort from the government and the private sector to address housing affordability challenges, increase supply and increase available units.” 

Caitlyn shared that a recent survey reflected that an average of 40.6% of multifamily development costs can be attributed to regulations. While regulations are necessary to protect health and safety of renters, the survey revealed that there are a lot of duplicate regulations. 

Mr. Hornung echoed the vitality of regulations but also added there is a desperate need to avoid duplicate regulations resulting in needless transaction costs.  

Mr. Handelman pointed out that some of the regulations we face as an industry date back to periods of segregation. NIMBY’s origin stems from more than just not wanting a certain type of housing, it was about not wanting certain types of people in their backyard. 

Supply Chain Restrictions 

Another factor contributing to the slowing of development of new units is the cost of materials, particularly lumber. Q2 and Q3 have shown signs of a turnaround compared to Q1, following a significant run-up in costs over the last 2 years. The Commerce Department reduced lumber duties by about 50% in August, resulting in lumber prices dropping from about $1,500 per thousand board feet to $500. The administration stated they are continuing to look for ways to work with the industry and their desire for a continued conversation with state and local governments. 

Cost Burdened Renters 

Chris Herbert with the Harvard Joint Center of Housing Studies defines cost burdened renters as ones whose income is restricted and therefore, cannot afford rent on their own. The lines between cost burdened renters and renters who can afford an available unit on their own are becoming blurred as rental costs and household costs have climbed. Ethan Handelman shared that for families truly in need, the most powerful contribution is rental assistance. Rental assistance would allow families to shift spending to other necessities like food, medical care, and education. 

“There is a noticeable gap between where rental prices would need to be in order to align with median area income in conjunction with the costs to build and maintain quality housing. HUD needs to pay attention to both renter needs and the cost associated with building quality housing. Increasing the number of vouchers by 25K is an important step in the right direction.” 

The Emergency Rental Assistance Program (ERAP) proved effective in keeping renters in their homes along with the flexibility of multifamily housing providers. Caitlin Walker did a great job pointing out the actions taken by NMHC members across the country to provide options for renters in need. 

Rent Control 

Rent control continues to be a hot topic. Concerns were raised about the increase in market rents over the last 12 months, with the panel pointing out that 15-20% year-over-year rental increases are not sustainable. Both panelists agreed the government is pro-housing which means they are pro-landlord, pro-renter, as well as supporting those who might want to be renters in the future. It was suggested that the political energy around this topic would be better spent on increasing demand, improving housing quality, and keeping rents at a reasonable level, rather than fighting about rent control month over month, quarter over quarter, or year over year. 

The challenges renters and property management companies face are not going to go away on their own. It falls to all of us to get involved in local, state, and national associations that advocate on behalf of the multifamily industry. To learn more, be sure to also check out your state and local apartment associations or visit nmhc.org or naahq.com to get involved. 

7 Ways to Reduce Application Fraud and Delinquent Payments at your Properties

As rental housing costs are soaring across the country, it is no secret that delinquent payments are affecting profitability for properties. Since 2021, rental rates have increased 13.4%, making the average rental cost $2495 a month, according to national real estate brokerage HouseCanary. Many renters are living paycheck to paycheck, even some of those who are making six-figures.  

Alongside the increase in delinquent payments, there is also an increase in application fraud, specifically since COVID-19. A recent survey from Snappt reveals an estimated 11 million applications were falsified or altered in the last year alone. This could also be a contributing factor to the rise in late payments. 

“We know people did not receive 15% to 30% increases in pay [to match rises in rental costs],” one regional manager stated. “So, to be able to still afford three times the monthly rent to qualify for an apartment is challenging.” 

Evictions are one of the biggest hits for properties, pinning costs at an average of $7,500 per eviction with nearly 4 million evictions filed every year. Knowing application fraud is potentially contributing to delinquent payments and therefore, evictions, here are some solutions we have for mitigating both application fraud and delinquent payments: 

Reducing Application Fraud 

  1. Passive authentication – Should a resident be filling out their application online, passive authentication technology can help confirm an identity of a user without demanding any additional authentication. Observable data can help give evidence of an online identity preventing fraudulent applicationsfrom moving forward. 
  1. Automated Verification of Income – Setting up an automated verification for income relieves both property managers and the prospective resident from issues or errors. It will also reduce the temptation or possibility for a prospective tenant to modify or create their own versions of the documents. Additionally, using software like Snappt can help detect if any documentation has been modified or altered. 

Reducing Delinquent Payments 

  1. Background checks – Rental history and credit checks can help properties better understand the qualifications of a prospective resident. Should they have no credit or rental history, properties can also ask for things like three months’ rent in advance or extra deposits to reduce risk in the event the resident doesn’t pay their rent. 
  1. Rent Payment via Flex – Offer your residents a flexible way to pay their rent through Flex. Flex will pay the full rent on the day its due while the tenant can split the payments in two according to their own paydays.  
  1. AutoPay options – Many residents simply forget to pay their rent. Give your residents the opportunity to set up auto-pay. Auto-pay is known for providing convenience, peace of mind, and significantly decreasing late payments. 
  1. Automated Reminders – You can leverage software that enables text message or email notification to remind tenants to pay their rent. While email can be useful, text messages are more likely to be seen and read.  
  1. Reasonable Penalties – While there is no set limit to penalty fees, most properties don’t charge more than 5% of the rental rate as a late fee and give a grace period of three to five days to pay rent. Reiterating your policies about late payments and fees are important as residents are not consistently reading or referring to their leasing agreement. It can be useful to share this message on a regular basis with residents as they may be more likely to pay on time because of it. 

Properties that use these practices can help mitigate risk and reduce loss of revenue to the best of their ability. ResMan also offers a robust, statistically-backed, score-based screening solution that includes identity verification to help reduce your application fraud, helping you make better leasing decisions on the available applicant pool without adding risk. Learn more here.  

PropTalk: Unconventional Times Call for Unconventional Thinking ft. Jaime Conde

About the episode:

Elizabeth Francisco sits down with Jaime Conde, Vice President of Sales at Anyone Home, to discuss the new ways of engagement for centralized leasing. Jaime Conde began his multi-family life building software tools for operators as a product and development manager at both Entrata and Anyone Home. His technical product management background, combined with a mastery-level problem-solving aptitude, makes him an expert in engineering solutions for customers and the market.


Conde holds a degree in Economics from Brigham Young University. A self-proclaimed “foodie,” he loves cooking with his wife, spending time with his 5 children, and surfing.


For more information on Anyone Home: https://anyonehome.com/


About ResMan: ResMan delivers the property management industry’s most innovative technology platform, making property investments and operations more profitable and easier to manage. ResMan’s platform unlocks a new path to growth for property management companies that deliver consistent NOI improvement and brilliant resident experiences easier than ever before. To learn more about our platform, visit https://learn.myresman.com/proptalk/.

Watch it here:

PropTalk: Nothing is the Same Post-Pandemic ft. Michael Brown

About the episode:

Elizabeth Francisco joins Michael Brown, Executive Vice President of InhabitIQ to discuss the changes seen in the rental housing industry since COVID-19. From staffing to application and renter fraud and more, hear from Michael Brown as he shares what onsite staff and properties are dealing with going into 2023. 

Michael Brown is currently responsible for the oversight and performance of the Screening Division at InhabitIQ, which currently includes five brands located throughout the United States and Canada. He is passionate about supporting the development of products that enable scale, efficiency and differentiation. One example of such innovation is ResidentIQ, IIQ’s advanced leased solution launched in early 2021. Michael is a veteran sales leader and brought to Inhabit IQ over 20 years of multifamily experience in online leasing and background screening. His management efforts have helped apartment owners and managers effectively increase efficiencies, drive revenue and reduce operating costs while meeting or exceeding KPI’s within the organizations. He holds a BS in Business Administration from Western Kentucky University. Outside of work, Michael maintains an active lifestyle with his wife in Southern California and welcomed their first child in September of 2021. 

About ResMan: About ResMan: ResMan delivers the property management industry’s most innovative technology platform, making property investments and operations more profitable and easier to manage. ResMan’s platform unlocks a new path to growth for property management companies that deliver consistent NOI improvement and brilliant resident experiences easier than ever before. To learn more about our platform, visit https://learn.myresman.com/proptalk/.

Watch it here:

PropTalk: Cocktails & Compliance Episode 6

About the episode:

ResMan’s Affordable Compliance experts, Rue Fox and Janel Ganim, are back with a delicious cocktail along with PropTalk’s latest episode of Cocktails and Compliance! Cocktail of the Episode? Ciroc Vodka Spritz – YUM! Sit down and hear all the Affordable updates from TRACS 203-A, staffing and supply chain issues, inflation’s impact on Affordable, new HUD PBCA procurements, and more! Plenty to hear about on this episode and you don’t want to miss it!

About ResMan: About ResMan: ResMan delivers the property management industry’s most innovative technology platform, making property investments and operations more profitable and easier to manage. ResMan’s platform unlocks a new path to growth for property management companies that deliver consistent NOI improvement and brilliant resident experiences easier than ever before. To learn more about our platform, visit https://learn.myresman.com/proptalk/.

Watch it here: