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Super-Commuting Grows As Bosses Pull Back On Remote Work

A growing number of Americans are spending at least 90 minutes each way traveling to and from work, a practice known as “super-commuting

New data from the U.S. Census Bureau shows a growing number of Americans are spending at least 90 minutes each way traveling to and from work, a practice known as “super-commuting,” Apartment List says in a new report.

While the super-commuting trend is not new, the pandemic provided a “brief respite, eliminating commutes for many and reducing commute times for the rest as traffic abated. As the economy went remote, the number of super-commuters fell by over 1.5 million even as demand for suburban and exurban living remained strong,” the report’s economists say in the report.

A growing number of Americans are spending at least 90 minutes each way traveling to and from work, a practice known as “super-commuting"

The report says the city-to-suburb migration is more recently focused on homeownership and affordable cost-of-living options. That has encouraged families to head to the lower-density suburbs while keeping jobs in the central city.

The latest population estimates from the U.S. Census Bureau show suburbanization vividly, with high-growth counties forming visible rings around urban cores.

Wages Are Higher for Those Willing to Commute Long Distances

“The latest census data clearly show that workers are willing to trade lengthy commutes for higher incomes. In 2022, the median wage eclipses $50,000 for workers who spend at least one hour commuting, and is actually lowest for those who live within a quick 15-minute trip to work,” the Census Bureau report shows.

A growing number of Americans are spending at least 90 minutes each way traveling to and from work, a practice known as “super-commuting"

The nationwide super-commuting rate is 2.7 percent, but double-digit rates can be found along the peripheries of several large metros in California and Texas, as well as Seattle, New York, and Washington, D.C.

The Los Angeles region has more super-commuters than anywhere else. The nation’s highest super-commuter rate can be found in Palmdale, a 60-mile drive from Los Angeles, where 16.9 percent of all workers commute at least 90 minutes for work.

A growing number of Americans are spending at least 90 minutes each way traveling to and from work, a practice known as “super-commuting"

Super-Commuting and its Implications

Apartment List senior research associate Rob Warnock writes, “The relationship between where people live and where they work continues to evolve. A record number continue working from home; however, many employers appear to be shifting back to in-person or hybrid arrangements.

“This is putting more commuters on roadways and transitways daily – including more super-commuters – and resuming the pre-pandemic trend. Worsening commutes for drivers increase car-related expenses, impact physical health, and amplify the environmental consequences of suburban sprawl. Meanwhile, worsening commutes for transit riders harm quality-of-life in urban cities and disproportionately affect the car-free households that tend to be lower-income. Altogether, this trend may increase tension between workers and employers, as they negotiate working arrangements that affect their commutes.

“Housing is, of course, central to any attempts at cutting back on super-commuting. In cities and suburbs alike, dense construction and infill development (built at a rate that scales appropriately with job growth) can improve housing opportunities so that those who wish to live closer to work can afford to do so,” Warnock says.

 

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NAA Announces 2024 Excellence Awards Winners

NAA announced the winners of the 2024 NAA Excellence Awards, a program that recognizes excellence and leadership in rental housing industry

The National Apartment Association (NAA) has announced the winners of the 2024 NAA Excellence Awards, an annual program that recognizes excellence and leadership across the rental housing industry. This year’s award recipients were formally recognized at a ceremony during Apartmentalize, NAA’s annual conference and exposition, held June 19 – 21 in Philadelphia.

“Congratulations to this year’s NAA Excellence Awards winners who have gone above and beyond to make tangible and lasting impacts to the rental housing industry,” said NAA President and CEO Bob Pinnegar. “Across our country, these individuals and organizations are leading the way and we are proud to highlight their accomplishments and commitment to excellence.”

NAA’s Excellence Awards celebrate apartment communities, industry professionals and affiliated apartment associations that make unique and lasting contributions to the industry each year. You can learn more about the awards program here.

A full list of the 2024 NAA Excellence Awards winners is included below.

Upper State Apartment Association
Affiliate of the Year (Mid-Size)
Pennsylvania Apartment Association
Affiliate of the Year (State/Metro)
The Cadence
Wesley Property Management
Affordable Community of the Year
Fern Crossing at Bayou Pierre
U.L. Coleman Properties
Major Rehab Community of the Year
Jasper
Westhome
New Construction Community of the Year
201 Canal
WinnResidential
Small Community of the Year
Keva Flats
Hankin Apartments
Large Community of the Year
American Landmark Apartments
Leading Organization in Diversity, Equity & Inclusion
Bozzuto
#NAAGives
Grace Hill
Supplier Company of the Year
Thompson Thrift
NAAEI Dedication to Education
Carol Christner
Pennsylvania Apartment Association
Chris Christenson Association Executive of the Year
Maryland Multi-Housing Association
Anthony V. Pusateri Apartment Career Promotion Award Comprehensive Program
Crystal Dukes
RealSource Management
DEI Champion
Kristine Levinskas
Trilogy Residential Management
Apartment Career & Education (ACE) Industry Educator of the Year
Tina M. White
McMahan’s Flooring
Supplier Sales Professional of the Year
Harmony Tripp
CMG Leasing
Emerging Leader of the Year
Kara Bonzheim
FSI Construction
National Supplier Council Achievement Award
John Whitaker
Elevated Asset Management
Independent Rental Owner of the Year

 

About NAA
The National Apartment Association (NAA) serves as the leading voice and preeminent resource through advocacy, education, and collaboration on behalf of the rental housing industry. As a federation of 141 state, local and global affiliates, NAA encompasses nearly 97,000 members representing more than 12 million apartment homes globally. NAA believes that rental housing is a valuable partner in every community that emphasizes integrity, accountability, collaboration, community responsibility, inclusivity, and innovation. To learn more, visit www.naahq.org. NAA thanks its Strategic Partners AppFolio, The Home Depot Pro, Lowe’s Pro Supply and Yardi.

 

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Entrata Acquires Colleen AI to Usher in New Era of Autonomous Property Management

Entrata's acquisition of Colleen AI enables operators to automate workflows end-to-end through a new AI product suite for property management

Entrata’s acquisition of Colleen AI enables operators to automate workflows end-to-end through a new AI product suite, ELI+

Entrata®, a leading AI-enabled multifamily Operating System (OS), has announced its acquisition of Colleen AI, immediately furthering its ability to automate property operations. By incorporating Colleen AI into the Entrata OS, operators can take the next step towards autonomous property management, introducing a new era for the industry.

Entrata’s vision of the future has Autonomous Property Management™ at its core, making workflows increasingly automated and portfolios more efficient while simultaneously delivering an elevated resident experience. With the unprecedented adoption of Entrata Layered Intelligence™ (ELI™), the acquisition of Colleen AI further bolsters AI capabilities across the Entrata OS.

Entrata is debuting ELI+, a new comprehensive suite of AI products designed to pave the way for transformational change in the next generation of multifamily.

Why it matters

By utilizing an improved AI platform designed to significantly improve workflows, property managers can focus efforts on filling vacancies, providing better customer service and building community engagement instead of chasing payments and drowning in project deadlines. It’s a grand new vision for where AI can take the experience of renters and property managers.

Entrata will now offer the following four core suites of products, which make up the Entrata OS:

  • ELI+ – a suite of AI products that provides comprehensive AI capabilities, market-ready functionality, and a team of multifamily AI experts. (formerly Colleen AI)
  • PMS – a suite of property management products designed to help automate workflows, improving efficiency while delivering an elevated resident experience.
  • Homebody – a fully integrated resident financial services offering that consists of three core products including rent reporting, deposit alternatives and renters insurance.
  • Utilities – an easy-to-use operating system that helps simplify billing, increase NOI and cut expenses.

Transformative efficiency through end-to-end AI workflow automation

Through the acquisition of Colleen AI, Entrata is introducing ELI+™, an elevated suite of AI products to power end-to-end workflows. ELI+ is for operators looking to harness the power of AI to transform their business through automation for even more efficiency.

It’s designed to be modular and allows for swift enhancement utilizing modern AI and machine learning technology, giving operators the most up to date functionality. Operators will have immediate access to AI-powered collections and renewal modules, with additional modules, including leasing, in the coming months.

“The acquisition of Colleen AI significantly accelerates our vision of Autonomous Property Management while immediately providing our customers with comprehensive AI capabilities, market-ready functionality, and a team of multifamily AI experts,” said Adam Edmunds, CEO of Entrata. “Through this combination, operators can power end-to-end automated workflows and interactions. This, in turn, will allow teams to concentrate on meaningful resident connection and high impact tasks to positively impact the resident experience and, ultimately, NOI.”

Increased data quality for more contextual AI 

Entrata’s new AI products sit across the OS to provide the ultimate automation, workflow management, and orchestration. There are thousands of data variables within the Entrata OS, and ELI+ leverages all of them to automate and contextualize every interaction — a clear advantage over other, non-native AI solutions. These data sources in Entrata are comprehensive and native to the OS to allow for high quality inputs.

This technology consolidation enables Conversational Context Switching™, which contextualizes each interaction through data and workflows for each resident, made possible by the single data source. For example, if a conversation begins for an amenity reservation, AI can easily satisfy the original request and then seamlessly shift the conversation to other priority tasks, such as beginning an early renewal process.

In addition, by embracing an OS with a native AI layer, like ELI+, site teams don’t need to switch or become bogged down by disparate tech. Operating in one system that teams are familiar with allows for rapid re-prioritization of activities through workforce redeployment.

“One of the key challenges to effective AI is high-quality and current data,” said Itamar Roth, CEO and co-founder of Colleen AI. “By introducing Colleen AI as native technology to the Entrata OS, the efficacy will be unmatched in the multifamily industry, dramatically accelerating the possibilities for autonomy in many areas that don’t exist today. We are thrilled about the innovation potential this combination brings.”

As part of the transaction, shareholders of Colleen AI, including Wilshire Lane Capital, will become shareholders of Entrata, Inc.

More information on ELI+ can be found here.

Advisors 

Wilson Sonsini Goodrich & Rosati served as legal counsel to Entrata. J.P. Morgan Securities LLC served as financial advisor to Entrata. Goldfarb Gross Seligman served as legal counsel for Colleen AI.

About Entrata

Entrata is a leading operating system for multifamily communities worldwide. Setting the bar for innovation in property management software since 2003, Entrata offers solutions for every step of the leasing lifecycle and empowers owners, property managers, and renters to create stronger communities. Entrata currently serves over three million residents across more than 20,000 multifamily communities around the globe. Learn more at www.entrata.com.

 

Where Are the Most Competitive Rental Markets?

As the summer moving and leasing season heats up, RentCafe took a look to find out where the most competitive rental markets are located

As the summer moving and leasing season heats up, RentCafe took a look to find out where the most competitive rental markets in the United States are located.

“Overall, the U.S. rental market is experiencing slightly less strain at the start of this moving season compared to one year prior, as it’s still feeling the effects of the influx of new apartments that have been introduced in recent years.

“Notably, the supply of apartments increased by 0.61% since January, which is in line with one year prior. Also, it’s worth noting that around 29% of the 137 markets analyzed are showing signs of softening, often with longer vacancy periods and more lease renewals,” the report says.

Taking a closer look at the 127 rental markets RentCafe analyzed, here are the most competitive, plus a few interesting newcomers:

  • Miami remains the most competitive rental market, with its RCI score of 94 driven by limited new apartments and a low vacancy rate of 3.5%. On average, each vacant apartment there attracts 19 eager renters.
  • Suburban Chicago is now the second-most competitive market, jumping from 10th place last year. With an RCI score of 83.6, 13 renters compete for each unit amid a 95.2% occupancy rate and no recent new builds.
  • North Jersey: Now the third-most competitive market with an RCI score of 82.3, a 96% occupancy rate, and a 71.7% lease renewal rate. Apartments are filled within 43 days, with 13 renters competing for each vacant unit.
  • Silicon Valley surged to sixth place, fueled by a resurgent tech sector. With a 95.1% occupancy rate and no new units, vacant apartments attract 12 renters each.
  • Manhattan is one of the markets where competition has intensified the most in the last year: Its RCI score has risen by 5.2 points to 73.3, driven by higher lease-renewal rates (65.7%) and virtually zero new apartments brought to the market.

As the summer moving and leasing season heats up, RentCafe took a look to find out where the most competitive rental markets are located

See the full report here.

Multifamily Challenges For Rest of 2024

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Multifamily Challenges For Rest of 2024

Multifamily challenges and the direction of inflation and interest rates will be closely watched by the industry in the second half of 2024

The direction of inflation and interest rates will be closely watched by the multifamily industry along with other multifamily challenges in the second half of 2024, Yardi Matrix says in their summer report.

“Performance continues to benefit from the strong economy and robust demand, while facing headwinds that include a large number of deliveries in some markets and higher-for-longer interest rates,” the report says.

Yardi Matrix’s mid-year 2024 outlook looks at how these issues will affect the market.

Some highlights:

  • Multifamily performance continues to be strong, but it is not without challenges. Demand remains steady from consistent job growth and immigration, but some fundamental metrics including rent growth and occupancy have deteriorated since the market peak in 2022.
  • Plus, the capital markets will remain a headwind until rates recede.
  • “We expect growth to slow in the second half of the year. Employment and consumer activity are positive, but there are some worrying signs and there is stress on lower income households.”
  • Inflation is likely to decelerate, but not fast enough to entice the Federal Reserve to cut interest rates meaningfully.
  • Higher-for-longer rates are a mixed blessing. Demand is boosted by weaker home sales, as would-be homebuyers can’t afford to buy and homeowners with low mortgage rates stay in place. But high mortgage rates put stress on sales and refinancings.
  • Rent growth is weak, and likely will remain so. Absorption so far this year continues to be healthy, at a pace of nearly 300,000 units nationally, but supply growth is putting pressure on rents in the Sun Belt.
  • Supply growth will be high in 2024 and 2025, but will wane after that.
  • Transaction activity remains weak, as rates are still high.
  • Debt continues to be a sticking point.

“We expect inflation to recede in the second half, in large part due to decelerating rents. Housing is a big contributor to the inflation numbers, and the methodology used to calculate the CPI means it lags rental-market changes,” the report says.

multifamily challenges for the rest of 2024 and how the direction of inflation and interest rates will be closely watched by the multifamily industry in the second half of 2024

“Our expectation is that economic growth will slow but remain positive in the second half of the year, while there is a deceleration in some of the factors such as job and income growth that created robust demand for multifamily,” the report says.

Read the full Yardi-Matrix Mid-Year report here.

About Yardi Matrix

Yardi Matrix researches and reports on multifamily, office and self-storage properties across the United States, serving the needs of a variety of industry professionals. Yardi Matrix Multifamily provides accurate data on 18+ million units, covering more than 90 percent of the U.S. population. Contact the company at (480) 663-1149.

May Multifamily Performance is Modest

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5 Tips to Help Multifamily Property Owners Improve Fire Safety

Fire safety is important for property owners so here are tips to avoid the most common cause of multifamily property damage, fire damage.

As a multifamily property owner, nothing is more important than keeping your residents and property safe. This means fire safety and protecting your property from one of the most common causes of multifamily property damage, fire damage.

By Steve Lockwood

According to the National Fire Sprinkler Association, there are an average of 88,600 apartment fires in the United States per year and it is the third leading cause for insurance claims according to the National Multifamily Housing Council.

The threat of fire damage is real which means multifamily property owners need to take fire safety seriously. As an expert in multifamily fire safety maintenance and testing, I know that many multifamily property owners can limit their liability with very minor fixes to their fire safety plan. Here are a few tips to help improve fire safety at your apartment complex.

No. 1 – Conduct annual inspections

The biggest mistake multifamily property owners make is also the simplest to fix.

All multifamily property owners must do an annual fire safety inspection. Too many apartment owners take too long to do fire safety inspections. I see property owners six to seven months past due for inspections because they have not fixed the deficiencies they were noted for the year prior. An annual inspection is the simplest way to learn about lapses in your fire safety plan. Do these yearly or you will run the risk of insurance not covering you when a fire occurs.

No. 2 – Don’t paint your sprinkler heads

Apartment complex owners are going to paint the interior and exterior of their property at some point.

A paint job is how one of the most common fire safety mistakes occurs. Accidentally painting sprinkler heads is an incredibly common but dangerous mistake multifamily property owners make. Painting a sprinkler head inhibits the spray pattern of the head which hurts its ability to put out fires. A sprinkler head that is painted shut can not discharge. If you paint over one you have to replace the whole head. You can’t just clean it. Hire a painter who understands this part of the fire code and properly covers up sprinkler heads before doing a paint job.

No. 3 – Replace bad pipes and valves

 Sprinkler systems will wear over time. Bacteria from the water in your system will build over time and rust your system from the inside out.

The piping in your fire system is bad on the inside, but it looks perfectly fine on the outside, so you don’t even know there is an issue. Not addressing internally corroded pipes will increase the chances of having a pipe burst. A pipe bursting during a fire emergency will make your sprinkler system unusable. The best way to fix this issue is to hire someone to do an internal pipe and valve inspection once every five years or do one on any multifamily property you are looking to purchase.  This inspection will let you know the condition of your pipes and valves and replace any faulty pipes before they fail you in an emergency.

No. 4 – Inspect fire extinguishers

 Fire extinguishers are the first line of defense against any fire.

If the fire extinguisher does its job in time your more extensive fire system won’t need to activate. Unfortunately, fire extinguishers are also always the last thing to be replaced due to compliance issues. Inspect your fire extinguishers annually; they need a full tear-down inspection every six years. This is when a fire safety expert will break down your fire extinguisher, empty it of powder, clean all the parts, and replace any defective ones. You should get a hydrostatic test every 12 years. This is when your fire extinguisher is filled with water or oil and then pressurized to test the integrity of its shell. Extinguishers get sun damaged, rusted, or dented all the time and are never inspected. Inspecting your fire extinguishers ensures you can stop fires before they become a bigger deal.

No. 5 – Getting a fire safety inspection

 You are going to need to get a fire safety inspection at least once per year.

Every piece of fire safety equipment will be marked with the date it was last inspected. Look at that date and one year from that date is when you need to get another inspection. The best way to get a fire inspection is to Google for a fire safety inspector and pick one that has a lot of good reviews. You can also ask any friends or property owners you trust who does their inspections. The fire department does not give recommendations for fire inspection companies in order to avoid the appearance of favoritism.

It is important to note that multifamily property owners are not required to have a specific fire evacuation or communication plan to operate but it is recommend that create one with the help of an expert. Creating a plan does not need to be complicated. A easily available property map with labeled fire escape routes will go a long way in helping people remove themselves from danger. An Annual email to tenants to remind them of your fire safety plan would also be a helpful but not required step to keep people safe during a fire.

About the author:

Steve Lockwood is the Owner of Mountain State Fire Protection LLC in Mesa, Arizona.

3 Critical Electrical, Fire Safety, & HVAC Maintenance Checks

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Rental Property Maintenance Checklist, Part One: Plumbing

rental property maintenance plumbing and water heater secured with straps in earthquake prone areas of the country

3 Common Plumbing Emergencies In Rental Properties And What To Do

Rental Property Maintenance: 6 Items to Troubleshoot in Your Crawl Spaces

How to Waterproof Your Basement</

Part 2 – Rental Property Maintenance: Security, Pest Control, & Exteriors

Photo credit Liudmila Chernetska via istockphoto.com

Mastering HUD Complaint Notices

Mastering HUD complaint notices and avoiding 3 critical mistakes for property management professionals and common pitfalls

Avoiding 3 Critical Mistakes for Property Management Professionals

By The Fair Housing Institute

In the fast-paced world of property management, HUD complaint notices are not just another administrative task. They are a ticking time bomb that can detonate your operations if mishandled. This article exposes three common pitfalls property management professionals encounter when dealing with HUD complaint notices and offers a strategic roadmap to navigate these challenges effectively.

1. Misjudging Your Case’s Severity

One of the most common errors in handling a HUD complaint notice is underestimating its seriousness. It’s easy to dismiss the urgency of these notices with thoughts like, “It will take ages for an investigator to look into this, so it can wait.” This type of thinking can be dangerously misleading. Every HUD complaint should be treated with immediate attention and gravity, as neglecting the early stages of the investigation can spiral into more significant issues later.

Immediate action is crucial: The initial response to a HUD complaint should involve a thorough review of the allegations, alerting your insurance carrier, and considering a consultation with legal counsel, especially if the potential for liability is high. Legal experts can offer a preliminary assessment of the risks involved and guide the following steps, including collecting specific documentation and preparing for interviews with all parties involved. In less complex cases, while upper management might handle the situation, the nuances of HUD regulations may require legal expertise.

2. Lack of Evidence: Before and After the Complaint

Before the complaint: Proper documentation is the backbone of effective property management. A robust documentation strategy supports operational efficiency and serves as critical evidence in disputes. Unfortunately, many property managers maintain inadequate records, which can severely weaken their position when a complaint arises. Essential documents include lease agreements, resident communications, maintenance logs, and formal complaints and resolutions. These documents are necessary to avoid unfavorable judgments and costly settlements.

After the complaint: The initial complacency often extends to the post-complaint phase. Some managers delay vital investigations, such as in-depth interviews with staff and residents, and hesitate to collect necessary evidence promptly. This procrastination can lead to a scramble when deadlines approach, resulting in poorly gathered and presented evidence. To counter this, starting a structured evidence-collection process is crucial immediately after receiving a complaint. This includes securing all relevant documents and digital communications, as well as preparing a list of potential witnesses and interviewing them. Also, a thorough review of your company’s policies and procedures is warranted. This way, you can see if there are any gaps and determine if they were properly executed by staff. These steps ensure you are better prepared to respond to the inquiry and defend your practices or provide relevant material to your legal team.

3. No Post-Mortem Analysis of the Complaint

Whether a complaint is resolved in your favor or not, each case presents a unique learning opportunity that should be noticed. The absence of a structured post-mortem analysis is a critical oversight many property managers make. Reflecting on handling each complaint can reveal significant insights into operational weaknesses and areas for improvement.

Learning from every outcome: Successful complaint resolution doesn’t necessarily mean the approach was flawless. Similarly, an unfavorable outcome isn’t just a sign of failure but an opportunity for critical adjustments. Conducting a detailed review of the process, decisions made, and the effectiveness of the evidence presented can help refine complaint-handling procedures. This review should involve all stakeholders, including legal advisors, and result in actionable policy and practice changes where necessary.

Key Takeaways: Lessons Learned from Handling HUD Complaints

Proactive management: The ultimate goal is not just to manage and resolve complaints but to prevent their recurrence through proactive management and continuous improvement of practices. Property managers can significantly mitigate risks and enhance service quality by understanding the gravity of HUD complaint notices, ensuring comprehensive documentation before and after complaints, initiating swift and thorough investigations upon receiving complaints and engaging in continuous learning from each case.

About the author:
In 2005, The Fair Housing Institute was founded as a company with one goal: to provide educational and entertaining fair-housing compliance training at an affordable price at the click of a button

Does Adding A New Person To Lease Reset Lease Expiration?

Does Adding A New Person To Lease Reset Lease Expiration? Ask Landlord Hank

The question this week for Landlord Hank is about adding a new person to a lease and whether it changes the lease expiration date.  On his page,  Ask Landlord Hank answers questions from other landlords and property managers around the country about their rentals so fill out the form below if you have a question for him. Remember Hank is not an attorney and is not offering legal advice.

Ask Landlord Hank:

When a new person is added to a lease, does this reset the one-year clock on lease expiration? Also, if rent is late, how long do you have to collect late fees?

I have a tenant who have been late almost every month by several days. I have not filed formal late-payment paperwork.

–Jennifer

Hello Landlady Jennifer,

When you add a tenant to the lease they are signing the original lease and are only there for that original time frame.

Make sure you check credit/ background/ rental history/employment history and so on, just as you would with any other tenant.

As far as someone paying the rent on time, that depends upon your lease.

It’s customary to have rental payments due on the first of the month and to have a grace period of up to four days before the late fee applies.

In that scenario, if a tenant hasn’t paid by the 4th of the month, the tenant is late on the 5th and that is when the late fee must be paid.

If you have a tenant that has been paying rent late every month, then have a talk with them that going forward, if they pay after the grace period ends, they must pay the late fee that day as well or you won’t accept the rent, because they aren’t paying all that is due.

If they don’t pay rent when due, then you either post or hand a three-day notice (legal notice) saying that the tenant has three days to “cure” the problem or you will start eviction proceedings.

Often when a tenant knows they face serious consequences by not paying as they agreed to in the lease, they become model tenants.

Best of luck!

Sincerely,

Hank Rossi

Does Adding A New Person To Lease Reset Lease Expiration ask landlord hank
On lease expiration issues Landlord Hank says, “When you add a tenant to the lease they are signing the original lease and are only there for that original time frame.”

Ask Landlord Hank Your Question

Ask veteran landlord and property manager Hank Rossi your questions from tenant screening to leases to pets and more! He provides answers each week to landlords.

  • This field is for validation purposes and should be left unchanged.

About the author Landlord Hank:

“I started in real estate as a child watching my father take care of our family rentals- maintenance, tenant relations, etc , in small town Ohio. As I grew, I was occasionally Dad’s assistant. In the mid-90s I decided to get into the rental business on my own, as a sideline. In 2001, I retired from my profession and only managed my own investments, for the next 10 years. Six years ago, my sister, working as a rental agent/property manager in Sarasota, Florida convinced me to try the Florida lifestyle. I gave it a try and never looked back. A few years ago we started our own real estate brokerage. We focus on property management and leasing. I continue to manage my real estate portfolio here in Florida and Atlanta. “ Visit Hank’s website here.

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What Does ‘Sharp Pullback’ in Multifamily Construction Permits Mean?

The recent sharp pullback in multifamily construction permits means fewer multifamily projects getting underway Apartment List says.

The recent sharp pullback in multifamily construction permits means fewer multifamily projects getting underway, Apartment List says in a new report.

While the number of multifamily units under construction peaked in late 2023 at a record level, and with nearly a million units still in the pipeline, this year is still on track to bring even more new inventory than last.

However, “the end of the current supply boom is already in sight. There has been a sharp pullback in the number of new multifamily projects getting underway, and that will translate to a slowdown in apartments hitting the market next year and beyond,” writes Chris Salviati, senior housing economist at Apartment List.

Developers have begun to pull back from investing in new projects as they look at both the continuing high interest rates and the steady decline in year-over-year rents since last summer.

Despite the pullback in permits, completions are still on the rise

While there has been a decline in new permits, it’s important to remember that obtaining a building permit is just the first step in new construction.

“It takes a long time for multifamily developments to get completed, and construction times have been getting even lengthier. In 2022, it took an average of 17 months for multifamily projects to go from construction start to construction completion (with an additional three-month lag between permits being issued and construction getting underway),” the report says.

New supply colliding with softening demand

The slowdown in rent growth and softening demand should continue in the near term., “Unless demand rebounds to levels solidly above the long-term average, it’s likely that rent growth will remain soft and that vacancy rates could continue to inch higher. These trends will be especially pronounced in the southern markets that are seeing the fastest housing stock expansion,” Salviati says.

“These conditions will not be indefinite, however. The pullback in new projects getting underway will eventually translate to a slowdown in new completions,” he says.

Read the full report here

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Report Cites Profits of Big Landlords Using RealPage

A report by a progressive watchdog group called cites six big corporate landlords using RealPage rent-setting software and profits

A report by a progressive watchdog group called accountable.us cites six big corporate landlords using RealPage rent-setting software and how much those companies have raised rents.

Three of the companies mentioned in the report are headquartered in Atlanta, according to a report in the Atlanta Journal-Constitution.

National Multifamily Housing Council, a public policy group representing the multifamily housing industry, disputed the group’s conclusions. Its president, Sharon Wilson Géno, noted that the multifamily rental industry was grappling with rising insurance rates, construction costs, and local and state taxes, in addition to other inflationary pressures.

“What’s really driving rental prices is the shortage of housing in the United States,” Géno told the newspaper. “Anytime you have a shortage, pricing is going to go up.”

Also, the newspaper reported accountable.us looked at the profits of Germantown, Tennessee-based Mid-America Apartments; AvalonBay Communities of Arlington County, Va.; Chicago-based Equity Residential; Essex Property Trust, which has headquarters in San Mateo, Calif.; UDR of Highlands Ranch, Colo.; and Camden Property Trust, based in Houston.

The report on the six multifamily apartment companies found they had $300 million in combined profits during the first financial quarter of 2024. The watchdog group attributes the rising profits, at least in part, to rent increases.

Highlights of the watchdog company’s findings on the six companies:

  • Mid-America Apartments saw its net income jump 6% to $147.6 million, allowing the company to spend $176.2 million on shareholder dividends and distributions.
  • AvalonBay Communities saw its net income increase 18% to $173.6 million as its “rental and other income” revenue increased 5.6% to $711.1 million. At the same time, the company’s “management, development and other fees” jumped 68.4% to nearly $1.8 million.
  • Equity Residential’s net income climbed 39% to $305 million with its “same-store average rental rates” increasing 3.4% to $3,077. Equity Residential spent $38.5 million on stock buybacks as its CEO said housing costs were rising due to a national shortage and that rent controls and other measures wouldn’t solve housing affordability.
  • Essex Property Trust’s net income increased 76% YoY to over $285.1 million, based on its “average monthly rental rate” increasing 2.1%.
  • UDR saw its net income increase 41% YoY to over $46.3 million, up from $32.9 million in Q1 2023.
  • In Q1 2024, Camden Property Trust saw its net income increase 97% to $85.8 million as it spent $50 million on stock buybacks, partly thanks to its “weighted average monthly rental rate” jumping 1.8% YoY. The company was also sued in February 2024 by the Arizona attorney general as one of several large landlords that allegedly “conspired to illegally raise rents for hundreds of thousands of Arizona renters” through RealPage, including Phoenix and Tucson residents who have seen prices rise 30% over the previous two years.

Liz Zelnick, an executive at the group, told allsides.com that the nonprofit analyzed the six largest publicly traded apartment companies’ financial reports and listened in on earnings calls. She said between them, the companies own close to 350,000 units. “There are so many people who are struggling to pay their rent right now. We’re seeing that corporate landlords are buying up more and more properties across the country and they’re maximizing profits, they’re raising rents, and now they’re utilizing RealPage, which is essentially price-fixing,” she said.

The FBI searched property-management company Cortland Management’s headquarters in Atlanta in an unannounced search in May, according to several reports, as part of a multifamily rent price-fixing investigation.

National apartment developer Cortland Management’s Atlanta office was searched by the FBI under a limited search warrant, a representative for Cortland confirmed. The warrant was connected to an investigation by the Department of Justice (DOJ) into potential antitrust violations in the multifamily housing industry, according to a statement from Cortland.

The FBI property management search is part of a criminal antitrust investigation by the DOJ into allegations that Cortland and other property management companies have been involved in a conspiracy to artificially inflate apartment rents.

“We are cooperating fully with that investigation, and we understand that neither Cortland nor any of our employees are ‘targets’ of that investigation,” Cortland said in a statement. “Due to the ongoing litigation, we cannot comment further at this time.”

Multiple tenants across the country have sued RealPage, claiming the tech company’s apartment software helped landlords collude to inflate rents. The lawsuits from around the country were consolidated in federal court in Nashville.