It feels like the multifamily industry has been fighting an uphill battle against the “big bad landlord” perception for a while. While this perception likely originated from a small group of renters who have outlier experiences with a small number of “bad egg” landlords, it has been picked up by advocacy groups, the media and politicians, and has unfortunately become the narrative that we all face today.
We in the multifamily industry know these experiences are NOT the norm. The vast majority of owners and property managers take pride in going above and beyond to provide safe, well-maintained homes at prices and on terms that are fair and in line with market conditions for both renters and owners.
But if we know most landlords are here for good and not for evil, why are renters still struggling to see this, too? We believe it comes back to one thing: transparency. So, we wanted to share some ways you can be more transparent with your renters in order to help them see through these misconceptions and recognize the positive impact that the vast majority of landlords have on residents and the communities in which they reside.
Now more than ever, the need for homes is vital as the demand for more apartments continues to outpace the overall supply. The YIMBY (“Yes, in my backyard”) Act, which would cut across some of the legislative red tape, is supported by majority of Americans (over 80%), as they see affordable housing as a right for all Americans. However, should rent control go into effect, which we’ve already seen happen in some states like Oregon, this would ultimately slow down the investment and development of properties immensely. Note: Oregon is now seeing a compromise in housing quality and new supply.
Rent control would also slow down and deter maintenance and renovation improvements. With already slim profit margins, if rent control policies are enacted, owners and operators will struggle even more than they already are to cover essential maintenance costs and will no longer be in a financial position to make investments in existing or new properties. Many will likely end up selling out of financial strain.
It is important for renters to understand that the solution to egregious rental rates is not controlling or capping rent because this will only create further supply issues. Rent control is merely a band-aid on a bullet hole. The real solution is working together with policymakers to provide more supply so that everyone can afford to rent. And if renters and landlords are working together and using their voices to advocate for programs that are proven effective for increasing supply, the affordability problem will also be solved as rents will at least stabilize and likely even decline.
The biggest monthly payment that most renters make is… rent! So, it’s not shocking that a resident might want to know where all of this money goes, especially if you are raising rental rates on them. The best way to explain where rent money goes is to break down a dollar of rent:
Being transparent about the breakdown of the dollar of rent affords residents a chance to where their rent dollars go and will likely put them at ease knowing their hard-earned dollars aren’t simply going into the pockets of owner operators.
There are obviously many reasons why properties screen potential residents, from ensuring renters have the means to make rent payments and overall mitigating risk of evictions for the property, as this is incredibly costly and a last resort. However, renters may not realize their application fees are covering this, and likely do not have a sense of what the cost of screening applicants actually looks like. This is another opportunity to provide transparency.
A typical screening provider charges anywhere from $25-$75 for a background screening report. And that’s not the only screening that occurs, as properties already know. Most properties also conduct residence and employment verifications, which means someone on the property has to make phone calls, send emails, and review the files manually to validate the information. That time equates to money in the form of salaries of property staff.
It’s also a good idea to share that other one-time or recurring fees are often invested in the quality of the housing, including pest control, ground maintenance, garbage pickup, paving and parking structures and more. Ultimately, it might seem frustrating for renters to give even more dollars, but it’s important to provide visibility around what they’re for and that their extra dollars are not pocket change for investors, owners or operators.
The multifamily industry, as a whole, is a frontline and essential industry for over 114 million Americans. Those within the industry know this to be true and take their role as housing providers seriously. They understand housing is the largest monthly expense for most people, and most support the point of view that having a place to live is a sacred and essential human right.
As many already know and despite what some may say, those in the multifamily industry really are housing advocates. They want to and actually do work hard to meet the housing needs of everyone in the communities where they operate. The key to success in meeting the housing challenges of today is to focus on reducing barriers to create new housing supply so we can meet the needs of everyone who wants and needs housing.
As we are working toward more transparency on these misconceptions with renters, it’s also important to extend this communication to local, state, and national policymakers. Show up, be seen and participate in a local Chamber of Commerce or city council meetings and invite local policymakers out to see property management companies at work. You can coordinate with your local or state apartment associations before touring, but helping policymakers see and understand what goes in to providing safe housing will help deter counter-productive policies like rent control from gaining traction.
Imagine the impact we could have if all 17.9 million of those employed directly and indirectly within the industry started to speak up about the true impact of rental housing providers and the need for policies that increase rental housing supply. Imagine how much greater that impact could be if the 44 million rental households also advocated for these same policies. All in all, transparency, communication, and participation are going to be the best paths forward for addressing the housing supply shortage and changing the narrative so that investors, owners, and operators are seen as what they really are – housing advocates.
Ready to have your voice heard? Contact your local apartment association for information on how to get involved.
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