3 Changing Trends in Multifamily: What You Need to Know

We kicked off our 2019 conference tour in Houston for the Texas Apartment Association Education Conference & Expo. If you weren’t able to attend, we put together this recap of the show’s biggest takeaways, trends, keynote speaker, and changes in 2019. We’ll focus on three of the most popular tracks: Maintenance, Affordable/ Fair Housing, and Technology.   

Major Changes in Affordable Housing

One burning topic of the conference was changes in affordable housing. Many of the repercussions are unknown, and others are too granular to tackle here. A few things are certain, however. HUD, or Housing and Urban Development, recently announced a reduction in the number of notice days property managers have to prepare for REAC inspections from a maximum of four months down to just two weeks. The number of random units that will be checked will also be likely to increase, which creates the opportunity to find more issues.

So what’s the solution? Stephanie Naquin of Novogradac & Company gave some great tips for maintaining good standing and staying compliant. Overall, the key is being proactive instead of reactive to current issues and ones that arise.

  • Make sure someone on your team reviews the IRS Form 8609, or the Low-Income Housing Credit Allocation and Certification form. It outlines any buildings allowed low-income housing credits per ten year period. Understanding this ensures credits are allocated and inspected correctly.
  • Review the IRS’ guide to completing the 8823 form, which focuses on noncompliance. The document contains examples and descriptions of how to correct common issues found during inspections. Use this as a way to reverse engineer how inspections are completed.
  • Allocate dollars to have a third-party team inspect units 3-6 months out from the inspection. They’ll catch items that will need attention before the inspection.

Evolving Technology and Security Concerns

Smart home technology and fraud prevention were major topics this year. 

Renters Embracing Smart Home Tech

Let’s start with the rise of the smart home. According to Statista, consumers from North America “were forecast[ed] to spend the most on smart home systems and services in 2022, with the expenditure amounting to 63 billion U.S. dollars.” According to Connected Intelligence, who conducts qualitative and quantitative analysis, renters are as likely as homeowners to have smart home products installed, and are 3 times more likely to be millennials. As supply begins to eclipse demand in many multifamily markets, making the right amenity enhancements decisions is more important than ever. They add value to your property that residents appreciate and are willing to pay for -- which means higher rent and a boost in NOI.

Growing Fraud Rental Concerns

Fraud is becoming a major concern for consumers anytime sharing personal information is required, which includes renting a home. Maitri Johnson from TransUnion discussed how fraud is impacting business. Most renters are required to prove their identity through either social security number or state issued I.D. Any risk of a data leak could result in exposing residents to identity theft, negative financial implications, and a host of other problems.

Fraud works both ways though. According to  research from Transunion and Forrester, “In the last two years alone, 97% [of property management companies] have experienced fraud in the properties they manage. And more surprisingly, over 80% have experienced it up to 20 times.” Again, the best way to protect your residents and your organization is to be proactive. A few tips:

  • Understand the difference between applicant screening and fraud mitigation, which are not the same. More applicants apply for housing online which opens the door for more fraud. The goal is to screen it as fraudulent before information is processed.
  • Begin searching for a fraud management solution. The same study noted that 63% of respondents said they’ve adopted a solution, and a quarter are planning on doing so within the next 24 months. If you’re not among this group it’s time to start your search.
  • Build a strategy for mitigating fraud. This could involve training staff to spot signs of fraud in applications and training so the technology is more easily adopted.

Maintenance that Makes a Difference

Maintenance can make or break your reputation with residents. In a Rentlogic Radius survey 82% of respondents said they find it frustrating how unresponsive their landlord is to fixing issues. Paul Rhodes and Mark Vanderhoof, of Grace Hill, talked about the importance of training in their session titled - Let’s Talk Maintenance Training: What Works.

Many property management groups know how important training is but fail to offer it because they’re afraid of getting behind on requests at their properties. Here’s the thing: Units will always need repair. Faucets leak, appliances break down; it’s just part of the costs of operating. Paul spoke about how a lack of training ends up costing management more in the long run, because of the added time it takes to make repairs when your team lacks knowledge. Investing in people is the best way to retain residents and build loyalty. (For what it’s worth, In the same survey, 90% of respondents said would sign a longer lease with a responsive landlord.)

Training to Keep Up with the Evolving Landscape 

The presenters couldn’t talk about maintenance without speaking on the changes in technology. With basic appliances becoming computers and smart home elements increasing in popularity. Your maintenance staff needs to be up to date on how to repair and maintain these items. In closing, Mark recalled speaking with his very first manager about how proud he was of tackling property issues and putting out fires that occurred at the property he managed. His old manager told him he was disappointed. Why? He said, because great maintenance men don’t put out fires -- they prevent them.

Bonus: Speaker Spotlight

Keynote Queen Latifah and Tim KennedyThe most anticipated speaker for the event was keynote, Queen Latifah (photo cred. Texas Apartment Association). In her interview with Tim Kennedy, she talked about how she’s carved a successful career for herself, goals she’s checking off her list and new ones she’s creating, and projects she’s working on -- including funding for affordable housing in her home state of New Jersey.

The company she is the co-president of, BlueSugar Corporation, partnered with GonSosa Development. They're a community oriented multi-million dollar development and construction firm. Many in the multifamily industry continually give back to the communities they serve and it was refreshing to see a celebrity support her communities' affordable housing concerns.

Where to Catch us Next

We’ll be exhibiting at Apartmentalize, one of the largest multifamily conferences of the year, June 26 - 28 in Denver, Colorado. Stop by booth #620 to say hello or schedule a demo before the conference.

 

Tags: multifamily, multifamily conference, Texas Apartment Association

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