Category: Multifamily

Renters Now a Majority in 23 Cities, Including Seattle

Renters became a majority in 23 cities over the past decade even as ownership increased, according to a new study by Rent Café.

“We looked at 10 years of U.S. Census housing data to determine where we stand now in terms of renter and owner population. Renting made significant gains in the last decade but dipped in the latter half, reaching a 7-year low in 2019. In the meantime, ownership rose to an all-time high, slowly rebounding after the great recession,” Rent Café said in the study.

Renters took over 23 cities with more than 100,000 residents between 2010 and 2019. Established hotspots such as Seattle or up-and-comers like Memphis and Pittsburgh transitioned from an owner to a renter majority.
In a surprising turn, Chicago, Sacramento, Reno, and Baltimore are among the 12 new owner-majority cities.
Looking at the cities with the fastest-growing share of renter population, four of the top 10 cities are in Texas. Frisco and Plano are in the lead with a 41 percent and 59 percent change since 2010. On the other side, ownership gains were much smaller; Hartford, Conn. saw the largest increase in owner share, 27 percent.

Renting made significant gains in the past decade but dipped in the last 5 years

The renter population grew by eight million in the last decade, and is now 107 million strong.

Specifically, renters currently make up 33.6 percent of the U.S. population — up from 33 percent in 2010. However, the latest numbers are far from the 2015 peak in renting, when 111 million Americans rented their homes for a 35.5 percent share. In fact, the number of renters reached a seven-year low at the end of the decade.

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    Apartment Investors Mull Opportunities in Distressed Malls

    Developers have proposed to redevelop more than a hundred malls into mixed-used properties with apartments.

    Apartment dealmakers may find an opportunity to build new apartments around the shells of under-performing or empty regional malls. Hundreds of troubled shopping malls may be seized by lenders over the next year, experts say.

    “In the current market with the pandemic, the number of properties considering this kind of redevelopment has multiplied three or four-fold,” says Brian McAuliffe, president of CBRE Capital Markets and leader of the firm’s multifamily sales business, working in the firms Chicago office.

    Regional malls, class-B and class-C shopping centers in deep trouble

    The pandemic has put tremendous pressure on many shopping malls. Hundreds have lost many of their largest, most important retail tenants as department store chains like J.C. Penney and Lord & Taylor declared bankruptcy and others scale back in the chaos caused by the coronavirus.

    The vast majority of class-B and class-C malls have lost at least one anchor tenant, according to research from Green Street Advisors. That adds up to several hundred properties that have lost a significant part of their income.

    Trepp has identified more than 100 properties that owners may soon surrender to lenders, more than a quarter of those are regional malls.

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      Multifamily Investors Plan to Add Value in the Pandemic

      One way for savvy investors to make deals pencil out in a tough market is target assets where strong management can generate some upside.

      Given current market conditions, some apartment investors are looking for a little something extra when they consider buying apartments.

      They have recently been able to close deals to buy apartment properties, despite the chaos caused the spread of the novel coronavirus. But to make these deals work, these investors often need a plan to add value to the property. Simply buying and holding an income-producing asset is not enough.

      Given current market conditions, some apartment investors are looking for a little something extra when they consider buying apartments.

      They have recently been able to close deals to buy apartment properties, despite the chaos caused the spread of the novel coronavirus. But to make these deals work, these investors often need a plan to add value to the property. Simply buying and holding an income-producing asset is not enough.

      That’s largely because of the risk of more job losses in the U.S. economy and an uncertain outlook on rent growth. Most buyers need some plan to raise the income from an apartment property to offset the risk of a slow economy.

      The plan to increase the income from an apartment community doesn’t have to include extensive renovations, extra amenities or higher rents. Many investors plan to improve the operations or management of apartment properties to create new value.

      “There is more downside risk than upside—buyers see that risk but also see some value-add,” says Sam Isaacson, president of Walker & Dunlop Investment Partners (WDIP), the investment management arm of Walker & Dunlop, managing three private equity funds that invests in multifamily properties.

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        HUD Charges Apartments with Discrimination Against Tenants Who Need Emotional Support Animals

        The U.S. Department of Housing and Urban Development (HUD) has charged a Philadelphia apartment owner with discriminating against a person with disabilities based on its refusal to waive pet fees for emotional support animals, according to a release.

        HUD is charging Post Presidential Property Owner, LLC, and Post Commercial Real Estate, LLC, the owner and manager respectively of Presidential City Apartments in Philadelphia, with disability discrimination.

        A tenant with a disability requiring an emotional support animal reached out to HUD alleging that she had been denied a reasonable accommodation to have pet fees waived at the apartments for such an animal.

        The Fair Housing Act prohibits housing discrimination based on disabilities, including denying reasonable-accommodation requests for the waiver of pet fees for assistance animals and rejecting requests for a designated handicapped parking space needed by a person with a disability.

        The complaint said “the tenant received an email from apartment’s counsel stating ‘a landlord is entitled to charge pet fees for an emotional support animal, which is considered a pet, unlike a service animal’.”

        Based upon this evidence, HUD recommended testing the subject property.

        The tests focused on reasonable accommodations relating to designated accessible parking and emotional-support animals for prospective tenants with disabilities.

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          The 5 Best Ways to Deal with Rent Delinquencies Right Now

          Landlords and tenants are facing rent delinquencies due to covid-19 so here are some thoughts to help from a veteran property manager.

          By Justin Becker
          Property Manager

          There is no denying that right now, COVID-19 continues to affect the real-estate and rental market.

          If you’re a property manager or landlord of a multifamily housing community or complex, navigating these waters for the last eight months has been somewhat challenging.

          Nevertheless, with no real end in sight, mass unemployment, fluctuation in available job opportunities, and the ongoing pandemic, it is still very difficult for tenants to be able to pay their rent and still afford their other monthly expenses.

          Working with tenants who are experiencing economic hardships due to COVID-19 has been par for the course for these last couple of months. Moreover, with most property managers’ and landlords’ hands being essentially tied in regard to legally dealing with late rent payments or lack of payments, it is not too surprising that people are starting to get creative by finding proactive ways to deal with rent delinquencies.

          Other than being more flexible, many property managers are not sure what else they can do during these uncertain times. But the good news is that there is definitely more that can be done.

          That said, here are the five best ways to deal with rent delinquencies right now.

          No. 1: Build Proactive Partnerships

          One of the best things you can do as a property manager right now is to collaborate with your tenants to ease the pressure and address financial hardships.

          Obviously, open lines of communication are key here, and looking for a win-win solution to the problem makes everyone walk away from negotiations feeling a little better. A prime example of building proactive landlord-tenant partnerships is deferring a portion of rent and establishing a reasonable repayment plan.

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            Despite the Crisis, Some Apartments Traded During the Third Quarter

            Buyers have closed these deals to buy apartment properties with help from new capital from investors.

            Investors bought more apartment properties than anyone expected in the third quarter of 2020, despite the ongoing chaos stemming from the pandemic.

            First, apartment investors found ways to complete deals planned before the coronavirus spread. Additionally, investors began to make new deals to buy apartment properties, especially in strong suburban markets.

            These deals are moving forward despite new uncertainties, as doctors diagnose tens of thousands of new cases of the coronavirus. Dealmakers are also making decisions amid a backdrop of political uncertainty with the control of the White House and Congress at stake in next week’s election and with it the potential fate of any new COVID-19 relief that could extend a needed lifeline to millions of Americans that remain unemployed.

            “We are surprised by the amount of acquisition activity,” says Sam Isaacson, president of Walker & Dunlop Investment Partners.

            Investors spend billions

            Investors paid a total of $24.0 billion for apartment properties in the third quarter of 2020, according to Real Capital Analytics (RCA). That’s down 51 percent from nearly $50 billion in the third quarter of 2019. It sounds like a steep and sudden fall—but the volume of sales is a step up from a second quarter in which much of the U.S. economy shut down to slow the spread of the coronavirus and deal volume ground to a near halt. The volume of sales was down 67 percent in the second quarter compared to the year before.

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              How Tenant COVID-19 Behavior Is A Predictor of the Future

              How tenant covid-19 behavior can be a predictor of the future in today’s challenging rental housing environment is the advice from veteran landlord David Pickron.

              By David Pickron

              Knowing how your applicant did in the COVID-19 times will be important information to protect yourself in the future.

              As a newly married couple in our 20s, my wife and I went out and looked at new homes as we were trying to decide where to lay down our roots and start our little family. We walked through what seemed like a never-ending parade of homes to see what was on the market. When my wife walked in the last model home, which was decked out and highly upgraded, her jaw hit the floor and she looked at me, communicating non-verbally that this was the one; she had found her dream home.

              Being new to the house-buying game and admittedly a little naïve to the process, we started our journey to purchasing our first home. Finding the home was the fun part, but qualifying, along with the accompanying mountains of paperwork, was another. After my wife picked out her upgraded white cabinets our first home cost $114,000, and all I could think about was how am I ever going to qualify and afford the payment? But after looking at my wife and seeing that look in her eyes, I knew one thing for certain, I was buying that house.

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                7 Insights for Landlords on the New Federal Eviction Moratorium

                Two attorneys recently joined the National Real Estate Investors Association for an online discussion to help landlords and property managers understand how best to deal with the new federal eviction moratorium.

                A new nationwide federal eviction moratorium has been ordered through the Centers for Disease Control (CDC) to halt residential evictions through the end of December for non-payment of rent due to Covid-19.

                Both lawyers discussed the issues, the affidavits that tenants must provide to show how they have been affected by COVID-19 in order to qualify under the federal eviction moratorium, and how attorneys could challenge the affidavits in court when necessary.

                You can hear the full discussion here on YouTube.

                Attorneys Jeff Watson, in Cleveland, and Jeffrey Greenberger, in Cincinnati, gave their thoughts – not legal advice – on how landlords could best react to the moratorium. They were introduced by Charles Tassell, chief operating officer of the National Real Estate Investors Association.

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                  Affordable Housing Developers Build War Chests to Buy Properties

                  Some buyers that want to keep properties affordable are hoping to snap up assets that otherwise might be converted to market rate units if they fall into other investors’ hands.

                  Affordable housing advocates are tired of losing bidding wars that result in losing some of the nation’s already stretched supply of workforce apartments.

                  During the recovery from the Global Recession, developers with a mission to create and preserve affordable housing struggled to buy older apartment buildings with an aim of keeping the rents reasonable enough for low-income families to afford. They are trying to prevent the same thing from happening in the current cycle, with the economic crisis caused by the coronavirus likely to trigger another wave of property sales.

                  “In the last recession, a lot of private equity buyers swept in and picked up affordable housing properties,” says Kimberly Latimer-Nelligan, president of Low Income Investment Fund (LIIF), a national, nonprofit community development financial institution (CDFI) with $900 million in assets under management. “We plan to make sure the mission-driven organizations have access to capital to compete with investors who are going to take those properties to market-rate rents and displace all those residents.”

                  To prepare this time, developers and investors dedicated to preserving affordable housing are now raising capital to make sure that they can successfully bid for properties, including affordable housing communities where existing restrictions on raising rents are nearing their ends. Affordale housing investors are also looking to buy older class-B and class-C apartment properties that have never been in official affordable housing programs as well as smaller properties with just a few apartments.

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                    Are You Making Any Of These 5 Rental Property Management Mistakes?

                    Here are 5 rental property management mistakes that Keepe, the on-demand maintenance company, sometimes sees at rental properties.

                    Managing a rental property can be challenging even for the most experienced property managers. As a property manager, you need to ensure that your tenants, workers, contractors, and your properties are in good shape.

                    If you are a property manager managing 1 or 100 rental properties, here are five rental-property management mistakes from Keepe that you want to avoid.

                    No. 1: You Don’t Have A Screening Process in Place

                    As a property manager you are most likely to deal with all kinds of tenants­.

                    When you rent your property to a destructive or troublesome tenant, you are sure to lose money and deal with problems every day. One sure way to save yourself of these issues is to have a detailed formal tenant-screening process that helps you select the right kind of tenants for your rental.

                    No. 2: You Don’t Have A Reliable Contractor When Issues Happen

                    Your tenants want the best service and quick solutions to their maintenance problems.

                    Not having a dedicated and reliable handyperson you can call immediately will likely affect your tenant satisfaction and retention rates.

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