Affordable Housing for Middle Income? It's a Myth!

May I ask you a personal question? Can you afford to live where you live? I mean, I know it’s none of my business what you pay in rent (or a mortgage) but … Oh. Wait. I IS my business to know such things. And the truth of the matter is, it IS getting harder to afford the rent in many places. Take the city where my student housing properties are: South Bend, Indiana, the home of the Fighting Irish - #GoIrish!

Recently the Edward Rose Company increased the rents on all units in their communities upwards of $45 or more on their 2 bedroom 2 bath floor plans. This should be a more or less expected increase, since it is my understanding they have not increased rents at all for years. Their pricing remained stagnant because the market here has been stagnant. No job growth. No industry growth, other than the GM plant and the nearby recreational vehicle industry in Elkhart, Indiana.

Many of you may remember the entire industry there collapsed a few years back when the Great Recession hit this area like a ton of bricks falling on a person’s head. It just died. Within the last 24 months, there have been significant signs of new life, but I wouldn’t call it a growth pattern. You cannot really have a sustainable growth pattern when no one is getting raises. There is absolutely zero salary growth in this area. It makes it depressing for the apartment industry, and no doubt for the many people who work here … at the same exact pay they were making 3-5 years ago. 

So, can you afford where you live? If the apartment rent goes up from your current rate, are you able to renew your lease? Or, will you start looking to enter into home ownership? Or, even home renter(ship) instead of renewing your lease? 

Too many people are making between $22-30K per year. How is it justified that many of the local apartment complexes have 2 bedroom 1 bath apartments that went from rents lower than $600 only 2 years ago to now $795-850? There are brand new complexes in the area but they are marketed directly to affiliates of the University of Notre Dame (especially students and their parents), AM General, Bayer and city employees at rents starting at $2400 per month. Where does place the local workforce who cannot afford the new places and now are being priced out of their current rentals?

What this are desperately needs is an in-between community and investors who believe in this market. What this market needs is a community that puts rents in $700-850 price range that are energy efficient, offer larger kitchen areas with an open concept living plan and in-unit laundry facilities. Nobody really cares about the pool or a billiards room in the Clubhouse. What they would use are outdoor kitchens with nice furniture, walking trails, being pet welcoming with real green space. Let the resident the choice to pick his own cable/internet source and pay for it, or include it in the rent. I’d pay for that. I’d pay for this kind of place.

What I won’t pay for is a building built in the 60s or 70s that has installed granite countertops, wood-look flooring and a price that is not worth it. Old buildings are still old construction. Pipes are still gunked up with past grossness with flows very restricted. Yes, some of these management companies include the gas heat; however, the windows and patio doors actually allow frigid wind to blow through … so the resident is still uncomfortable and the management companies are still paying for the heat to warm the great outdoors.   

I love it when an older community makes the cosmetic updates to compete but keeps their pricing affordable for the current residents. Am I just dreaming?

What Time Is Your Office Open???

Apples and Oranges.

Apples TO Oranges.

Two completely different “same” things erroneously compared to one another. For once, I understand this concept. Recently on a Discussion thread posted on the Multifamily Insiders website (www.multifamilyinsiders.com) someone wrote that he is better off keeping current RESIDENTS happy than taking care of the MAYBE ones. It really struck a nerve with me.

Obviously, to me, Residents are different from Prospective Residents and each has different needs and reasons for coming to the Leasing Office. I think it is important to take care of both. One is not more important than the other; however, those who are already living in my community already understand what we are about and how we can help them. For example, they may place work orders on line; they may pay rent on line; they may call and leave a message or send an email for all their questions and they can reasonably expect a response within fifteen minutes. Prospects visiting the property for the first time are our guests and deserve our time and attention when they arrive.

At issue was handling those Residents who arrive at your Office as the Office is being closed. Do you stop everything and take care of their needs? The discussion evolved into closing the Office at the end of the day so you can handle Resident issues, return phone calls, and “catch-up.” This is simply the worst way of providing customer care that I can think of in our industry.

Quite frankly, every apartment community caters to a certain demographic. There are properties whose residents are on limited incomes so this Office may deal with Project Based Section 8 renters, or the income restrictions of Section 42, or they may accept vouchers issued by the Housing Choice Voucher Program. There are properties with age designations where residents must be aged 55+ or disabled. One property may be oriented to those who are students attending a nearby university or college. There are others whose residents are made up of all people who happen to meet all the selection criteria and are qualified to live there (which could be anyone!)

My point is, people are different, with varying needs and schedules, and they deserve to have business hours that meet those needs. For properties who have vacant units to rent, does it make any sense at all to turn someone away who happens to arrive at 5:45 PM on a sunny June evening just because you want to close at 6:00 PM? For properties who handle several Recerts each month and an Open Waiting List to keep filled, does it make any sense to close your office during the hours that the bus system runs? People who have transportation limitations should not be told that you cannot extend your hours because your office is always closed on Saturdays or Wednesday or every day from 8:00AM - 11:00 AM to new Applicants.

I don’t feel taking care of my Current Residents is more important that helping new Prospective Residents. Companies should staff their properties according to the needs of the community they are serving. It is not an either or proposition.

Resident or Prospect? I just can’t imagine closing the door in someone’s face because your “time is done for the day.” I also cannot understand someone who has a conventional 200-unit property with eleven vacant units to fill, closing the Office between 4-6 PM to “catch up on paperwork.” Too many times, this is when people get off work to come and look for a new home. If you close every day at 4:00 PM, how mnay leases are you missing? Whose needs are you serving? Yours or thos of your Residents and Propsects?