REITs With Women on Their Boards Outperform Men-Only Boards

Real estate has a reputation of being an old boys’ network, and while the average female representation on REIT boards has grown from 8.5% in 2006 to 15.5% in 2017, the industry still lags the 22% female representation on other boards of companies in the S&P 500. Now research is showing the lower level of diversity on REIT boards could be having a negative impact on results. From the Wall Street Journal:

That is the conclusion of a new report by Wells Fargo Securities that analyzed 165 equity REITs from 2006 to 2017. The analysis “determined that companies with more than the average percentage of women” on their boards “achieved higher average price and total returns over that period,” the report stated.

The average percentage of women on REIT boards was 15.5%, the report said. The share prices of REITs with higher-than-average percentages outperformed those with no female representation by 1.93 to 2.33 percentage points, according to the report. The outperformance was 1.33 to 1.69 percentage points when both share price and dividend were taken into account…

Of the equity REITs analyzed by Wells Fargo, 34 had no women on their boards. Women made up at least one-quarter of boards at 40 REITs, the report said.

Wells Fargo’s methodology consisted of looking at board compositions at year-end from 2006 to 2017 and calculating share price and total return over a forward three- and five-year period.

Emotional Service Animal Tips from the Airlines?

Property managers aren’t alone in having to deal with the emotional support animal issue. There might be something to learn from how the airlines are approaching the issue:

It recently announced changes to increase scrutiny about its passengers flying with service or comfort animals — Delta says it flew 250,000 of such animals last year, which was a 150 percent increase over 2016. Incidents reported of those animals biting or defecating during flights had nearly doubled since 2016.

“Delta emphasized safety concerns in detailing the increased documentation owners that will be required to provide about their animals,” Brulliard writes. “But its action also was spurred by a widespread perception among airlines and disability rights advocates that some fliers are fraudulently taking advantage of the federal law to bring untrained pets of myriad species into crowded cabins.”
Sound familiar?…

“Passengers with trained service animals will need to submit a veterinary health form at least 48 hours before travel to the airline’s new ‘Service Animal Support Desk,’ ” Brulliard writes. “Customers with emotional-support animals or psychiatric service animals must do the same but also must provide a letter from a doctor or mental-health professional and a signed document saying the animal is trained to behave in public.”



The Stunning Growth of “Rentership”

Anyone paying attention to housing trends since the Great Recession would tell you that the number of rental households has increased. If, however, they aren’t a close observer they might be stunned at the sheer scale of the shift from homeownership to “rentership.” From the NAA blog:

In a study of the 100 largest U.S. cities, 22 shifted from owner- to renter-majority between 2006 and 2016, including key markets Chicago, San Diego, Detroit, Austin and Sacramento, boosting the total number of renter-dominated cities to 42.

Over the 10-year period analyzed, rentership growth outpaced homeownership in 97 of the 100 most populous cities…

During these 10 years, the total U.S. population gained approximately 23.7 million people, and at the same time, the number of renters increased by 23 million, and homeowners by less than 700,000.

Best Screening Practices to Minimize Risk

Property Management Insider has a nice, 7-part list of the best screening practices to minimize risk. Here are just a couple:

2. Reduce subjective decision-making at the community level
Use automatic approvals based on your company’s rental criteria to simplify the move-in process and reduce individual decision-making, thereby reducing fair housing violation risk. Reserve manual approvals for borderline applicants and restrict the ability to perform them to authorized users…

4. Separate criteria for applicants and guarantors
Bad applicants should not be buried under exceptional guarantors. After all, the guarantor isn’t the one who’ll be living in your community…

Here’s a link to the full list, which also includes some tips about setting criteria customized for each community.

Housing Affordability a Growing Issue in Charleston, SC

Our friends down in Charleston, SC are facing a real housing affordability challenge:

Renting isn’t any easier. The average rent in the Charleston metro area in September topped $1,600, higher than the national average and other major cities in South Carolina, Georgia and North Carolina, according to a Post and Courier analysis of rental listings data.

Prices are even higher closer to the region’s job centers. As a result, teachers, nurses, police officers and others workers often can’t afford to live in the communities they serve. Many are heading farther into the outskirts in search of cheap housing, and that means more commuters piling onto already congested roads…

Greenville and Columbia are beginning to feel the crunch, as well, but Charleston by far has the most advanced shortage of affordable housing in South Carolina.

Affordability is an issue throughout the country, including the Piedmont Triad, but the attention has mostly focused on major metros like San Francisco and New York. It’s now being noticed in smaller cities like Charleston and it will be incumbent upon the apartment industry to help municipal leaders understand how to address the issue effectively, and not adopt well-intended policies that actually make the problem worse, like rent control and inclusionary zoning.

Fannie Mae Offers Incentives Tied to Well Being of Tenants

Fannie Mae is offering incentives for borrowers that are tied to providing services that improve the health and well being of residents. From an article in Multifamily Executive:

The incentive, in the form of a lower borrowing rate, is called Enhanced Resident Services and aims to foster services that address the needs of renters and support health and wellness programs, day care, food access, youth and education programming, and job training, according to Fannie Mae. The new offering became available to borrowers on Jan. 15.

“We believe the strength of an affordable rental housing property is directly linked to the health and stability of the people and families who live there,” said Bob Simpson, vice president of affordable and green financing at Fannie Mae, in a statement. “Affordable borrowers have recognized the value of providing enhanced resident services at their properties for years but have been constrained by the inability to ensure a long-term source of financial support. By participating in our Healthy Housing Rewards program, borrowers will save between $15,000 and $75,000 per year. The amounts saved can be used to offset resident-services costs at [the borrowers’] property for the life of the loan, thus ensuring that the low-income residents who live there have access to health care, education, and other community services.”

Fannie will implement Enhanced Resident Services with the assistance of Stewards for Affordable Housing for the Future (SAHF), a nonprofit, multistate group of affordable housing providers that offers initial and ongoing compliance certifications for both the borrower and the multifamily affordable housing property providing the special services. To qualify, at least 60% of the units in the properties seeking the pricing incentive must serve residents earning 60% or less of the area median income.


Luxury Apartments in the Triad

The Triad Business Journal recently published an article on luxury apartments in the Triad, and it contained some good information:

In the Triad area, the average rent price for a two-bedroom apartment falls around $800.

In Winston-Salem, the price is slightly lower, at $777, according to apartment search platform RentCafe. Greensboro’s average rent price for a two-bedroom, is $812, according to RentCafe…

A few apartment complexes that are currently under construction in the Triad include The West End in downtown Winston-Salem. Construction began on the $35 million project in April 2017 and the 229-unit building is set to open in 2019.

Another luxury apartment complex, The Hawthorne at Friendly Center Apartments, is set to open in late 2018. 

In the online version of the article, they have a slideshow (subscription required to view) showing off some of the area’s higher-end properties. It’s definitely worth taking a look if you can.


Jobs, Jobs, Jobs

It would surprise no one to learn that there’s a tight job market in the rental housing world, but you might be surprised at exactly how many open positions there are in the industry. According to new research from the National Apartment Association, there are about 4,000 open positions nationwide. The largest number of open positions can be found in the “Property Management” category, and not far behind that is the “Maintenance Category.”

Source: National Apartment Association

As you can see the largest number of openings by job title is for Maintenance Technicians – shocking right? – and the researchers were kind enough to dig a little deeper into that position’s data:

Source: National Apartment Association

All of this data is derived from a new monthly NAAEI product called Apartment Jobs Snapshot. Here’s more info about it from NAA’s site:

The Apartment Jobs Snapshot is a new monthly product from NAAEI highlighting labor force trends in the rental housing industry. It examines the total job posting trends by position, category and geography, as well as providing fresh and detailed updates for industry employers. The snapshot will feature enhanced quarterly editions with more expansive data, starting in April 2018.

Players Entering the Short-Term Rental Field

Last week we shared an article about the effect that Airbnb is potentially having on rents. This week we’ve found an item about potential new players in the short-term rental market, and their interest in working with property management firms. From the Wall Street Journal:

The short-term residential rental business, which got its start with people putting spare rooms on the lodging market, is knocking on the door of some of the country’s largest landlords.

A venture-capital group that includes hotelier Barry Sternlicht has invested in a startup that plans to add a new upscale and branded dimension to the short-term rental business pioneered by companies like Airbnb Inc. and HomeAway Inc…

“Consumers want short-term rentals and they want them at a scale that no one ever anticipated,” said Fifth Wall co-founder Brendan Wallace.

Numerous other startups are pushing into similar businesses, including Arlington, Va.-based WhyHotel and of Miami. Meanwhile, Airbnb in 2016 launched its own “Friendly Buildings Program” under which landlords put rental units on the website.

An Airbnb spokesman last week said there were 13,000 units in the program, up from 10,000 in July.

Many landlords are still skeptical about working with these companies, but that could change as property management firms become more familiar with the new short-term companies. And of course, if vacancies begin to rise then working with these firms could become a much more enticing option.

Water Damage Ain’t Just About Mold

Here’s a cautionary tale from a student property in Elon:

The ceiling of one of the breezeways…had sections of concrete fall down.

No one was injured, but the students who lived there had to be evacuated. The director of inspections for Alamance County says no one will be allowed back in until the components to support the ceiling are fixed.

“Well because the walls, those tresses [sic] are attached to hold up the second and third floors of that apartment building. We want to make sure the walls are sound before we let anyone back in there,” says Robert Key, director of county inspections.

In the video interview, the inspector said that because the trusses were hidden behind concrete it was not possible to easily inspect them, which meant that water damage went undetected and that led to the supports giving way and the collapse of the concrete.

Just one more way that water can be a maintenance professional’s nemesis.