ABODE June 2021 by HAA Publishing

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Return Service Requested

MARKET REPORT • NEW CONSTRUCTION • MARKET TRENDS

Houston Apartment Association 4810 Westway Park Blvd. Houston, Texas 77041

ABODE THE HOUSTON APARTMENT ASSOCIATION MAGAZINE

www.haaonline.org

June 2021

ABODE • JUNE 2021 • VOLUME 44, ISSUE 6

It’s a

new

www.haaonline.org

dawn It’s a new

day

And the apartment market is feeling good.

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CONTENTS June 2021

ON THE COVER

FEATURES & PHOTOS

30 It’s a New Dawn – It’s a New Day. It’s a new market and we’re feeling good.

It’s a New Dawn – Change really has done us good as the multifamily market starts looking up and sees some positive light. Cover Photo © leolintang | iStock by Getty Images

COLUMNS & MONTHLY UPDATES 7 President’s Corner – More advice from HAA’s past presidents.

36 Rising Up – A closer look at new properties inside Houston’s core.

8 Patron of the Month – Meet and support Camp Construction Services.

40 How the Pandemic Has Changed What Renters Want– What renters want in their amenities has shifted significantly. What are they looking for today?

9 Legislative Update – Lawsuit settlement means major water and sewer rate increases for Houston properties.

44 How multifamily operators can meet the demand for furnished ondemand housing. – Renters want flexibility. 50 Leasing Automation – The battle of the bots. 52 On the Scene – Photos from the Texas Apartment Association One Conference & Expo. 54 On the Scene – Photos from the March on Crime Luncheon. 56 On Site with ABODE – Take a closer look at another randomly selected HAA member property. 57 On the Scene – Photos from the HAAPAC Phoneathon. 58 Get Educated – Learn about the CAS designation from three HAA Product Service Council members.

11 It’s The Law – High utility bills and force majeure clauses. 14 Resident Relations – Is $241.02 excessive for painting? 20 Calendar – HAA’s schedule of events for the next coming months. 26 NAA Update – The Biden administration rolls out new rental assistance guidelines. 60 Welcome Mat – Find out about the newest HAA members. 62 Go-Getters – Cheers to membership! 66 The Ambassador ONE Society – The Ambassadors make connections. 70 Portfolio Changes and In the News – Property updates and industry news clips from our members. 74 Index of Advertisers – See the supplier members who support this publication. 75 MarketLine – The latest area market numbers. 76 BackPage – News from around the community.

We welcome your comments. Email us at comm@haaonline.org.

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OFFICERS AND ASSOCIATION LEADERSHIP PRODUCT SERVICE COUNCIL OFFICERS CHRISTY RODRIGUEZ President-Elect JOHN BORIACK President

SCOTT DOUGLAS Vice President at Large

DAVID LINDLEY, CAS President FSI Construction

GINA ERWIN Vice President at Large

DEREK DEVRIES, CAS Vice President, Camp Construction Services

SHELLEY WATSON Vice President at Large

CANDIS MOHR, CAS Secretary, AAA Plumbers

TRACIE YODER Vice President at Large

JOSEPH RODRIGUEZ, CAS Treasurer, The Urban Foresters

CLAY HICKS Immediate Past President

LAURA LESTUS, CAS Immediate Past President, The Liberty Group

STEPHANIE GRAVES Secretary/Treasurer

HOWARD BOOKSTAFF General Counsel

CASEY WATTS MORGAN CEO

BOARD OF DIRECTORS John Boriack President Clay Hicks Immediate Past President Mack Armstrong Julie Batche Jeff Blevins, CAS Jill Bounds, CAM Michelle Bridges, CAS Kyle Brown Joseph Bryson, CAM, IROP Tina Cavaco Terri Clifton Michelle Croasmun Derek DeVries, CAS Ian Douglas Scott Douglas, CAM, CAPS Gina Erwin Tamara Foster Israel Garza, CAS Diane Gilbert Monica Gracia Stephanie Graves, CAM, CAPS Manu Gupta Bryan Head, CAM Melissa Herrera Deborah Holcombe Crystal Jackson, CAM, CAPS Tyler Johnson Debbie Kelm Jacob Kunath, CAS Barby Lake Laura Lestus, CAS David Lindley, CAS Sonia Lopez, CAM, CAPS Betsy Marshall, CAM, CAPS Kristin McLaughlin, CASE Candis Mohr, CAS Carlos Neto Dean O’Kelley, CAS Jenifer Paneral Mark Park, CAS Velissa Parmer Michelle Pawelek Loyal Proffitt Jackie Rhone Christy Rodriguez Kelly Scott Kurt Seidel Corri Smith Kelley Suess Debbie Sulzer

Ryan Terrell Dana Tucker Starla Turnbo Richard Wall, CAM, CAPS Shelley Watson Quintina Willis, CAM Tracie Yoder, CAPS DIRECTORS EMERITUS Josh Allen Ken Bohan Gary Blumberg Kathy Clem Jack Dinerstein Jenard Gross Darlene Guidry Alison Hall David Hargrove Larry Hill Stacy Hunt Hap Hunnicutt David Jones Mike Koch Dick LaMarche Tim Myers P David Onanian John Ridgway Kim Small Eileen Subinsky Steve Sweet Kirk Tate Suan Tinsley H J Tollett, Jr. Pat Tollett Vic Vacek, Jr. Beth Van Winkle Jerry Winograd ADVISORY DIRECTORS Billy Griffin, CAS Amanda Kelly, CAS Cesar Lima Mary Lawler Bruce McClenny Angelee Kumar Parikh Penny Sprang Theri Tinelli Ruha Vohra, NALP, CAM Tony Whitaker GENERAL COUNSEL EMERITUS Joe Bax

HONORARY LIFE MEMBERS Claude Arnold Kenn Brown Tina Cavaco Terri Clifton Kevin Fenn Diane Gilbert Anita Harrison Dwayne Henson Mike Koch Merry Mount Monette Reynolds Sherry Stevenson Kirk Tate Suan Tinsley Sonny Unverzagt Del Walmsley Nancé Wells H.P. Paul Young Jeanne Marie Zublin Dicks PATRON MEMBERS 1961 CSC ServiceWorks 1968 Century A/C Supply 1978 Houston Planned Energy Systems 1982 Cotton Commercial USA Inc. 1984 AAA Plumbers 1985 Gemstar Construction Development 1986 Craven Carpet 1987 Dixie Carpet Installations 1994 Camp Construction Services 1997 Apartments.com 1999 FSI Construction Inc. 2006 Lowe’s Pro Supply

PRODUCT SERVICE COUNCIL MEMBERS Amanda Kelly, CAS, Angie Aversa, CAM, Brandt Electrical A/C CAPS, CAS, & Heating Services The Liberty Group Debra Knight, CAS, Chris Bell, CAS, Fidus Construction Cotton Commercial Services Marivel Bownds, Stephanie Krop, CAS, Valet Living CASE, Poolsure Dixie Caldwell, Liz Levins, CAS, Apartments.com Rasa Floors Shaun Callaway, CAS, Tracey Moore, CAS, Earthworks Flooring Warehouse Neal Conant, CAS, Karen Nelsen, CAS Gemstar ALN Apartment Construction Data Development Matthew Nunn, CAS, Sean Cunningham, Capital Construction CAS, Flooring Doug Oehl, CAS. Warehouse Flooring Warehouse Deborah DeRouen, Nikki Sekunda, CAS, CAS, OneApp The Liberty Group Guarantee Blaise Spitaleri, CAS, Juana Estrada, CAS, Gemstar First OnSite Construction Giovanna Gone, CAS, Development Century A/C Supply Blake Subinsky, CAS, Clark Gregg, CASE, HD Supply Fidus Construction Mat Tilley, CAS, Jimmie Hotz, CASE, WeDoTrash Chadwell Supply Amber Whitaker, CAS Dan James, CAS, FSI Construction Redevelopment Services

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JUNE 2021 I VOLUME 44, ISSUE 6 CEO and Publisher CASEY WATTS MORGAN cmorgan@haaonline.org EDITORIAL AND DESIGN STAFF Director of Publications and Design DEBORAH NIX dnix@haaonline.org Managing Editor MORGAN TAYLOR mtaylor@haaonline.org ADVERTISING Vice President of Membership and Marketing AMANDA SHERBONDY, CAE asherbondy@haaonline.org CONTRIBUTING STAFF Vice President and General Manager SUSAN HINKLEY, CAE shinkley@haaonline.org Vice President of Professional Development EMILY HILTON, CPP, CAE. ehilton@haaonline.org Vice President of Public Affairs ANDY TEAS, CAE. ateas@haaonline.org Vice President of Finance NANCY LI LO, CPA. nlo@haaonline.org Director of Resident Relations MATILDE LUNA mluna@haaonline.org Director of Events and Meetings LAUREN RAGIN, CMP lragin@haaonline.org Director of Rental Credit Reporting TINA DEFIORE tdefiore@haaonline.org Assistant Vice President – Outreach LAUREN TURNER, CAE, CMP lturner@haaonline.org Membership and Marketing Manager KAYLON NEWCOMB knewcomb@haaonline.org Webmaster and IT Specialist WILL ALFARO walfaro@haaonline.org PRINTER TGI PRINTED www.tgiprinted.com

HOUSTON APARTMENT ASSOCIATION COMMITTEES COMMITTEE CHAIR STAFF ADVISOR Executive John Boriack Casey Morgan Program & Budget Christy Rodriguez Casey Morgan Nominating Clay Hicks Casey Morgan Fair Housing Mack Armstrong Casey Morgan Ethics Michelle Pawelek Casey Morgan Investment Stephanie Graves Casey Morgan ByLaws Kyle Brown Casey Morgan Past Presidents Council Kathy Clem Casey Morgan Multifamily Fire Safety Alliance Elizabeth Castro-Gray Andy Teas Developers Todd Triggs Andy Teas Legislative Christy Rodriguez Andy Teas Political Action Stacy Hunt Andy Teas PAC Fundraising Gary Blumberg Alpa Patel Century Club Joseph Rodriguez Alpa Patel Golf Mark Park Alpa Patel Strategic Outreach Stephanie Graves Lauren Turner Leadership Development Alison Hall Susan Hinkley Community Outreach Jackie Aguirre Susan Hinkley Product Service Council David Lindley Susan Hinkley Expo Exhibitor Derek DeVries Amanda Sherbondy Membership Melissa Friend Amanda Sherbondy Doug Oehl Ambassador ONE Society Ryan Weis Amanda Sherbondy Marivel Bownds Independent Owners Connection Ramon Nunez Amanda Sherbondy Education Advisory Council Betsy Marshall Emily Hilton Monica Gracia Emily Hilton Career & Community Development Penny Sprang Emily Hilton Resident Relations A Beverly Norris Matti Luna Resident Relations B Kevin Hartman Matti Luna Resident Relations Appeals Darlene Guidry Matti Luna HAF Fundraiser Mark Park Lauren Ragin Debbie Andreozzi NEXT Ruha Vohra Lauren Ragin Amanda Kelley Property Awards Susan Dear Tina DeFiore Crystal Jackson HOUSTON APARTMENT ASSOCIATION MISSION AND VISION: HAA is the leading advocate, resource and community partner for quality rental housing providers in the Houston and surrounding area. HAA develops leadership in the multifamily industry by engaging broadly diverse membership, embracing effective technology and advocating for a geographically inclusive association. ABODE IS THE OFFICIAL PUBLICATION OF THE HOUSTON APARTMENT ASSOCIATION serving the multihousing industry in Austin, Brazoria, Chambers, Colorado, Fort Bend, Harris, Liberty, Matagorda, Montgomery, San Jacinto, Waller and Wharton counties. ABODE, JUNE 2021, VOLUME 44, ISSUE 6 ABODE (USPS 024-962) is published monthly by the Houston Multi Housing Corporation. Publishing, editorial and advertising offices are located at 4810 Westway Park Blvd., Houston, Texas 77041. Telephone 713-595-0300. The $50 annual ABODE subscription rate is included in all member dues and additional subscriptions are available. The annual subscription rate is $50 for members, $65 for non-members. Advertising rates are available upon request. Contributed material does not necessarily reflect the views and opinions of the Houston Apartment Association. Copyright © 2021 by HAA. Periodicals Postage Paid at Houston, Texas. POSTMASTER: Send address changes to ABODE, 4810 Westway Park Blvd., Houston, Texas 77041.

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SPONSOR MEMBERS These companies have generously supported the Houston Apartment Association with their sponsor membership. Please give them careful consideration, whenever possible, in your business. 100% Tree & Lawn Care LLC A + Infinity Blue Outdoors LLC A-Affordable Roofing Co AAA Staffing Ltd AAdvantage Laundry Systems ACM Contractors of Texas ACT Security Group Action Window Coverings Inc ACTIV Answer by Audio Images ACUTRAQ Background Screening Inc Adobe Floors Inc Adventure Playground Systems Inc Affinity Hot Water Technoogy Inc Aftermath Services Alcaraz Lawn Care Alexander-Rose Associates Inc All About Doody Pet Solutions LLC All American Mailboxes of Houston Inc Allegion Allied Powder Coating ALN Apartment Data Inc AlphaGraphics of Central Houston America Outdoor Furniture American Fire Systems Inc AmRent Andrews Myers PC Apartment Lines ApartmentData.com APEX Lighting Store AppFolio Arbor Contract Carpet Inc arc electric + lighting Archcon ASAP Personnel Inc ASAP Steamers Carpet Cleaning Asphalt Maintenance Inc Atom4 Security Camera AZPartsmaster B&G Construction Belfor Property Restoration Bell’s Laundries Benefits 4 Rent BenefitU Bentley, Bratcher & Associates - PC Bettencourt Tax Advisors LLC BGE Inc/aka Brown & Gay Engineers Inc Big Star Development LLC Bio-One Houston South BioTechs Crime & Trauma Scene Cleaning Blue Eye Defense Blue Heron Technologies LLC Brady Chapman Holland & Assoc Brannan Designs LLC Architecture & Interior Design BrightView Landscape LLC BSI Building Professionals of Texas CAD Restoration Services LLC Cameras Onsite Cano Electric Inc Cantrell McCulloch Inc Carradine Valet CashFlow Pros LLC Centex Construction CFI Group

Chadwell Supply Cinch – Cabinet Refacing Kits Citi Fence & Concrete Classic Same Day Blinds Classic Touch Painting Comcast Contractors Inc ControlByNet Cloud and Managed Video Surveillance Solutions CORT Furniture CRE Business Solutions LLC Crowned Eagle Construction CSI LED & Hardware Cypress Landscaping & Irrigation Inc DeNyse Companies Designs by Holmes Diamond Services LLC DNM Contracting Inc DoodyCalls Dooley Tackaberry Inc Door Clearance Center DreamCoat Cloud Services Ecolo Environmental Inc Embark Services Emersyn Electrical Services LLC EnviroSmart Multifamily Pest Solutions Epic Air Conditioning Fantastic Floors FAST Security, LLC Featherston Sign Partners Fiat Construction LLC Fidus Construction Services Finish Factory Inc First Responders Cleaning & Decon Flavor Finish Resurfacing Frontier Waste Solutions fun abounds Furniture Refinishing Services Gambit Construction Gasof United Remodeling Gateman Inc Giordano Construction Inc Go-Staff Inc Great American Business Products Green City Security LLC Green Garbology GT Security Solutions LLC Guardian Gutters Halo Doors Inc HARCO Insurance Services Hard Works Valet Trash & Recycling Higginbotham Hillco Building Service Hive Technology Hoover Slovacek LLP IGD Plumbing LLC Imperial Hospitality and Security Services Inc In Service Security LLC Industrial Disposal Supply Infinity Power Partners J and B Carpet Services J Guzman General Remodeling J National Johnstone Supply Jonah Digital Agency Kathy Andrews Interiors

Keylo Painting & Construction King's Granite and Marble KONE Leah McVeigh Design and Consulting Lights Out Production Company Lincoln Jacob Construction Lithotech Printed Products/ Forms Center LJL Designs Lopez Carpet Care & Painting Love's Plumbing Company Inc LP Building Solutions: LouisianaPacific Corporation LSR Multifamily Maldonado Nursery & Landscaping Inc Marathon Solutions Group LLC Marvin F Poer & Company Masonry Solutions Inc Matrix Construction Services McKenzie Drake Corporate Housing McMahan's Flooring Inc Moveforfree.com Inc MPS Direct Mueller Water Conditioning Inc MV Electric Inc MX2 Commercial Paving Nations Roof Houston LLC Nationwide Eviction Nettles & Co Property Tax Consulting Norman Construction Notifii LLC O’Connor & AssociatesCommercial Property Tax Division O’Conor Mason & Bone PC On Duty Tree and Landscape On Site Towing LLC Onesource Moving Outdoor Elements Pace Mechanical Services LLC Parking Management Company/ PMC Towing Pathfinder Insurance Group Paul Davis Restoration North Houston PCS Creative Surface LLC Perma-Pier PERQ LLC Pool Knights Precision Hydro Pros Pro Turf Landscaping Professional Resurface LLC Pura Flo Corporation Quick Roofing RAM Construction Ram Jack Foundation Solutions Redevelopment Services Redstone Payment Solutions Reliable Roofing of Texas Inc Reliant RENCON Rent Debt Automated Collections RentPath RentSense LLC Residential Waste Service LLC Resto Medic Restoration 1 of Central Houston

REVS (Refuel Electric Vehicle Solutions) RezClean Houston RG Miller Engineers Roosevelt General Contracting Roto-Rooter Services Co SafeRent Solutions Saifee Signs & Graphics Saint Clair & Sons Inc SEAL Security Solutions LLC Secure Insurance Security Reconnaissance Team Sherwin Williams Company Sign-Ups & Banners Signal 88 Security SOS-ASAP Softwashing South Central Electric LLC Southern Shingles State Patrol Services LLC Storm Maintenance & Monitoring Stormwater Professionals Group Strata Roofing and Construction LLC Structural Concrete Systems LLC Surface Designers Remodeling Inc Swain & Baldwin Insurance & Risk Management Texas Apartment Pool Services Texas Concrete Professional Company Texas Engineered Roofing & General Contracting Texas Landscape Group LLC Texas Management Group LLC Texas Southwest Floors Inc Texas Waste Management Solutions LLC Text Services LLC The Allshouse Group LLC The Home Team Roofing & A/C The Lane Law Firm The Liberty Group The Texas Bee Yard LLC DBA 3BeeGuys Bee Removal Three Amigos Texas LLC Tidal Renovations LLC Total Safety Security Services LLC Tpo Pros Roofing & Restoration Two Brothers Foundation Repair United Protective Services Urban Design Constructors LLC USA Patrol Division Valet Living Veteran Supply Services LLC Vima Decor WASH Multifamily Laundry Systems Wayfinder Tax Relief LLC Webb Pest Control Westco Grounds Maintenance LLC Whitmans Contracting and Roofing Wildlife Removal Experts LLC Willbanks & Associates Inc

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Letter from the President

By JOHN BORIACK, 2021 HAA President

LEARN FROM THE LEADERS Advice from the Houston Apartment Association’s rich legacy of past presidents.

MACK ARMSTRONG IS a senior managing director for Greystar and, of course, a Houston Apartment Association past president. Armstrong is the type of leader who believes in developing people and even companies and organizations. One of the most cherished compliments I’ve ever received while serving as an HAA Board of Directors member was from a fellow board member who told me that I reminded them of Armstrong’s personality and leadership style, which makes me very excited to feature him this month. When Armstrong served as president of HAA in 2013, he guided the association to develop the HAA Strategic Outreach Department, allowing HAA to focus on and service Houston’s 12 surrounding counties. With a dedicated HAA team member bringing HAA’s services to those outlying counties, HAA has been able to better serve, advocate and offer resources to apartments outside the inner loop. After serving in the Air Force for four years, Armstrong started his career in property management with zero experience by the grace of another HAA Past President Stacy Hunt, an executive director for Greystar. From then on, Hunt invested in Armstrong, helped him develop professionally and inspired him to seek opportunities that best served Armstrong, even if it meant working somewhere else. “He’s always looked out for my best interests, and really, whether I’ve worked for him or not, which is a trait of a true mentor,” Armstrong was quoted saying in ABODE magazine in 2013. “How much do you care about the person when you have nothing to gain from them?” Armstrong eventually went to work for COO of Asset Living David Hargrove, who at the time was leading Greystone Asset Management. Hargrove was another a leader who helped Armstrong grow professionally and personally. After six years, Armstrong returned to Greystar, where he has been ever since. Immediate Past President Clay Hicks attributes his own success to leaders such as Armstrong, Hargrove and another HAA Past President Jerry Winograd of Judwin Realty Group. Noticing a trend here? Leaders develop leaders. I know I am extremely fortunate to have had really smart, successful people help me, inspire me and influence me to be where I am today. And I wouldn’t be here today if I didn’t invest in my own leaders within Veritas Equity Management. Let’s read what Armstrong has to say about leadership. www.haaonline.org

Harry Truman said it best, “You can accomplish anything in life, provided that you do not mind who gets the credit.”

John: What are some things you wish you knew when you started your career? Mack: First, work for a company you believe in, not necessarily a single person. People change and move around, but if you believe in the company and what the company stands for, then you can build a career. Otherwise, you will find yourself following that person around as they move around in the industry and you will never set your own roots for stability and growth. John: What skill do you believe is the most important to perfect for someone who does what you do? Mack: The ability to communicate. Both written and oral communication are critical now in any job, but especially in the world of property management. This is a people business. You must communicate effectively to be successful. John: What is the hardest leadership lesson that keeps being presented to you that you either have to learn or relearn? Mack: Leadership is many things, but one critical element is the ability to focus on others and not yourself. Meaning, the more you can help people get what they want, the more you’ll get what you want. Leaders build other leaders continuously, and they are not selfcentered or protective of their domain. On the contrary, they are constantly working to make others stronger and to help others reach their potential. In that spirit, a good leader will delegate and ensure others get acknowledged for their efforts and performance. Harry Truman said it best, “You can accomplish anything in life, provided that you do not mind who gets the credit.” John: What was the best leadership advice you’ve ever received? Mack: The best leadership advice I ever received was actually from the book “Good to Great” by Jim Collins. Chapter two, entitled “Level Five Leadership” is a great read, and while it focuses somewhat on CEO type behaviors, I believe it applies to any leader. As the book summarizes, “The primary concept is Level 5 leaders channel their / See President, Page 61

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These companies have generously supported the Houston Apartment Association with their patron membership. Please give them careful consideration, whenever possible, in your business.

Houston Planned Energy Systems

HAA Member since 1997

Cotton Commercial USA Inc.

Gemstar Construction Development Inc.

HAA Member since 1982

Lowe’s Pro Supply

HAA Member since 1985

CSC ServiceWorks

HAA Member since 1984

HAA Member since 2006

HAA Member since 1961

Craven Carpet

HAA Member since 1986

Camp Construction Services

HAA Member since 1994

June Patron of the Month

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Apartments.com

HAA Member since 1978

AAA Plumbers

FSI Construction Inc.

HAA Member since 1999

Dixie Carpet Installations

HAA Member since 1987

Century A/C Supply

HAA Member since 1968

www.haaonline.org

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Legislative Update

By CHRISTY RODRIGUEZ, HAA Legislative Chair, with ANDY TEAS, CAE, Vice President of Public Affairs

WATER, SEWER RATE INCREASES AHEAD Lawsuit settlement means major increases for Houston properties.

HOUSTON APARTMENT properties and other water customers are likely to see major increases in their bills over the next five years. A recent study from Carollo Engineers recommends a water rate increase of 39.5% and a sewer rate increase of 60% over the next five years. Much of this is driven by the settlement of a lawsuit over Houston’s sewer system, which will require an estimated $2 billion in spending over the next 15 years for major upgrades and deferred maintenance. How did Houston get here? Background The City of Houston covers more than 650 square miles of land area – more than twice the size of all five boroughs of New York City and three times the size of Chicago. To provide water and sewer service to a city of Houston’s geographic size and population is a daunting task. Houston owns and is required to maintain more than 6,100 miles of sewer pipe – about the distance from Houston to Cape Horn, the southernmost tip of South America. Most cities are able to take advantage of their topography in the design of their water and sewer system. Water treatment plants ideally go uphill from the city. Sewage treatment plants go downhill. This gives the whole system an assist from gravity. Houston’s 650 square mile territory is basically flat, so the system operates entirely on pumps.

Your Vote Matters www.haaonline.org

Over the past several decades, citizens groups and environmental regulators have become increasingly critical of the extent to which Houston’s aging sewer system leaks. Allowing any raw sewage into a waterway is a violation of the federal Clean Water Act, and Houston’s frequent sewer spills finally landed the city in a lawsuit with both the U.S. Environmental Protection Agency and the Texas Commission on Environmental Quality. The settlement, finally approved two months ago, requires Houston to complete a 15-year, $2 billion infrastructure plan that includes 430 individual sewer system improvement projects, along with $4.4 million in settlement payments to state and federal governments. Even this has not satisfied environmental groups, which pushed the court to require more upgrades and harsher penalties. “This consent decree represents an important first step to giving Houston residents a real solution to the sewage problems we see and smell after every major rain,” said Kristen Schlemmer, legal director for a group called Bayou City Waterkeeper. “But it falls short in one key respect: It does nothing to help our low-income neighbors fix problems that lead to sewage backing up into their homes, pooling in the yards where their children play and dirtying our local bayous and creeks.” Houston Mayor Sylvester Turner told reporters that the rate increases suggested by the Carollo study would allow the city to pay for the court-or-

dered upgrades and also to continue to cover its utility debt service payments – paying back bondholders for revenue bonds used to fund city water and sewer operations. The report projects that without rate increases, the city will be unable to fund its debt service costs by 2023, placing the city in violation of its bond covenants. Rate Increase Schedule At press time, no specific schedule for rate increases has been proposed by the city, but the Carollo study suggests steep, rapid increases – sewer increases of 20% this July, 19% in April 2022, and another 6% the following April. Recommended water rate increases would be 9% in July, 10% in April 2022, and an additional 10% the following April. To see what this could mean for your property as soon as a month from now, apply a 20% increase to the sewer charge and a 9% increase in the water charge on your property’s most recent bill and take a look. Options for the Apartment Industry As difficult as it is to absorb rate increases of this magnitude, the apartment industry – and all other water and sewer customers – may not have a lot of choice. Houston is under a court order to complete significant system improvements and it is legally obligated to service its bond debt. / See Legislative Update, Page 27

The Houston Apartment Association Political Action Committee is the PAC of the Houston Apartment Association, a non-profit trade association representing the area apartment industry. Without political capital, our industry would not be as successful in representing you or your clients’ interests, and thus, your financial well-being. The HAAPAC participates in local and state political campaigns, helping candidates who support the apartment industry and its supplier businesses. You can participate in the HAAPAC on several levels.

For more on HAAPAC, visit www.haaonline.org/haapac June 2021

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It’s the Law

By HOWARD BOOKSTAFF, Hoover Slovacek LLP , HAA General Counsel

HIGH UTILITY BILLS AND FORCE MAJEURE CLAUSES Things you may want to know.

WE HAVE BEEN hit by a lot in the past few years. Hurricanes, the pandemic and the recent winter storm have all impacted our ability to do business and the price we have to pay for goods and services. The Texas winter storm left many parts of the state without power and water for several days and increased the price for gas and electricity (when available) to consumers, including apartment communities. Hopefully, by now you have recovered from the storm and restored services to your property. Problem is, when you opened the mail in March or April, you discovered that your gas or electric bill was extraordinarily high. Some Houston Apartment Association members have seen bills from the month of February that were 10 times greater than previous months! Some utility providers have asserted force majeure rights to charge the inflated price. What is force majeure? Can it be used in a contract to justify charging higher prices? What is a force majeure clause? The term force majeure describes uncontrollable events, such as war, labor sabotage or extreme weather, that are not the fault of any party to a contract and make it difficult or impossible to carry out normal business. Force majeure is a common clause in contracts that essentially freezes liability and excuses performance when an extraordinary event or circumstance, beyond the control of the parties prevents one or both parties from fulfilling their obligations under the contract. Texas courts have held that the scope and application of the force majeure concept is governed today more by the terms of the contract than by historical common law theories. To avoid liability for acts of God, www.haaonline.org

contracts frequently provide an express exception or excuse when a party’s ability to deliver is prevented or hindered by events beyond the party’s control. Can a force majeure event excuse a party’s performance under a contract? Yes, but the right is limited. A Texas Court of Appeals has held that a force majeure clause does not relieve a contracting party of the obligation to perform, unless the disabling event was unforeseeable at the time the parties made the contract. In a 2018 decision in the case styled TEC Olmos, LLC v. Conocophillips Co., the First District Court of Appeals in Houston determined, in a case involving a drilling contract, that after the parties entered into the agreement, changes in the global supply and demand of oil caused the price of oil to drop significantly. The court stated that an economic downturn in the market is not an unforeseeable occurrence that would justify application of a force majeure provision and a contractual obligation cannot be avoided simply because performance has become more economically burdensome than a party anticipated. Can a party get out of contractual obligations if cold weather prevents performance? Yes. In a 1999 case styled Tejas Power Corp. v. Amerada Hess Corp., decided by the 14th District Court of Appeals in Houston. As a result of cold weather (in February 1996), the seller under a natural gas purchase contract could only deliver a portion of its promised supply to the buyer. When abnormally cold weather caused gas wells to freeze, the seller’s supply of gas was temporarily diminished. As result, the seller was

not able to meet its contractual obligations to all of its consumers. The contract provided that in the event the seller could not perform its obligations under the contract due to a force majeure, its obligations shall be suspended for the duration of the event. The contract defined force majeure as an act of God or any other cause of like kind not reasonably within a party’s control and which, by the exercise of due diligence of such party, could not have been prevented or is unable to overcome. The court found that the cold weather and the freezing gas wells constituted a force majeure under the terms of the contract. Although the seller could have “overcome” the effects of the event and met its contract commitment by purchasing additional gas at approximately five times its original price, the court stated that the wording of the contract indicated that this was the very obligation that the seller sought to avoid by inclusion of the force majeure clause. Does a force majeure clause justify charging more than allowed under a contract? Not likely. In the Tejas Power Corp. case, a seller of natural gas was able to defend itself against a breach of contract claim pursuant to the force majeure clause. However, this case did not address the issue of the application of a force majeure clause to a situation where the seller performed, but did so at a higher price. Typically, a force majeure clause is used to excuse performance under a contract, not justify a price increase for performance. It could be argued that if a seller of gas (or electricity) performs, even in the face of inJune 2021

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clement weather or another force majeure event, the force majeure clause would not be triggered because there would be no failure to perform. The uncertainty of future market prices is often the motivation for entering into a longterm fixed price contract. In Valero Transmission Co. v. Mitchell Energy Corp., the First District Court of Appeals in Houston explained that the primary purpose of a fixed price agreement is to avoid the risk of price fluctuation. Thus, a sudden significant change in price or the fact that one of the parties may gain or lose during a particular period of the contract, is part of the negotiation of the contract, not an event that would be sufficient to excuse performance under the force majeure clause or to raise the price under a fixed price contract. How can we avoid high prices in the future after a force majeure event? To avoid an unforeseeable price increases after a force majeure event, you might consider negotiating a fixed price contract for utilities, such as gas and electric service. If your contract has a force majeure clause, it should be reviewed with your legal counsel to

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be sure that it only allows the defense to a contractual obligation for an uncontrollable event, not the market fluctuation in the price. In the event your gas or electric bill was excessive after the freeze, read your contract to determine whether you have a fixed price contract and whether the gas or electric provider has the right to assess the amounts charged. If the contract does not provide for the ability of the provider to assess the price charged, communicate with your provider to attempt to resolve your differences. If you can’t, consult with your legal counsel to determine what your best strategy is to resolve the differences between you and the service provider. If a force majeure clause is used to justify higher prices, consider having your legal counsel review your agreement and the arguments identified above to determine whether the use of the force majeure clause is justified. Hopefully, this is a helpful explanation of force majeure defense. Good luck!

Want to read more legal news from Howard? There’s more “It’s the Law” available in the ABODE archives online. Visit http://issuu.com/haa_abode.

Want more Howard? See Page 23 for details on how you can get the “Legal Lowdown.”

www.haaonline.org

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Resident Relations from the RESIDENT RELATIONS COMMITTEE

PAINT PROBLEMS Is $241.02 excessive for paint?

A RESIDENT FILED a complaint with

the Houston Apartment Association to dispute charges following move-out. In the complaint, the resident listed the damages at move-out, as well as her frustrations with her unit during her lease term. The resident requested management reduce the charges as a fair solution. Management responded to HAA and that response was forwarded to the applicant. Management felt the resident was charged accordingly. Enclosed in management’s response were copies of the lease, the resident ledger, the application form, the move-in condition form, the notice to vacate, the move-out statement

The HAA Resident Relations Committees provide

and pictures. an impartial review of resident complaints using Management stated the documentation provided by both the resident the resident submitted and management. only a couple of work orders during her time at this property, one for a light bulb and the other for a clogged sink. The issues the resident claimed community for a year, the committee ruled the upon move-in were not included in her $241.02 paint charge as excessive, removing it move-in condition form nor were they ever from the charges. reported in a work order. After the revisions, the resident owes The committee ruled in favor of man$1,072.24. agement with a revision. The photos substantiated most charges, except for one. If you are a manager with a resident Management charged the resident $241.02 issue, call HAA at 713-595-0300 for painting. Because the resident lived at this for direct assistance. I wasn’t expecting it at all. I was surprised that they nominated me!” he said, laughing. “ I’ve been with this business for 15 years. I never expect anything. For me, if I get my job done or get it right, I’m satisfied with that. I don’t need recognition. As long as my resident and my management and the owner are happy, I’m happy. It was a good experience, though, feeling that way. I didn’t know that someone was watching!”

I wasn’t expecting it at all. I was surprised that they nominated me!” he said, laughing. “ I’ve been with this business for 15 years. I never expect anything. For me, if I get my job done or get it right, I’m satisfied with that. I don’t need recognition. As long as my resident and my management and the owner are happy, I’m happy. It was a good experience, though, feeling that way. I didn’t know that someone was watching!”

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June 2021

www.haaonline.org

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HAA Online Sponsorship Auction Hosted by

Wednesday, June January 30 209 a.m. 9 a.m. to 10 to 10 am.am. This is your opportunity to get in the spotlight as a sponsor for an upcoming HAA event or meeting! Events up for sale include the Hall of Fame Luncheon, Fall Golf Tournament, Chili Fest, Honors Awards, ACES Programs, PAC Meetings, Go-Getter Happy Hours, NEXT Events, Board of Directors Meetings and educational courses and classes. For the full auction program and if you're curious what events have sold for in the past, visit our website at

www.haaonline.org/sponsorship

New to our Sponsorship Auction? Join us the day before on Tuesday, June 29 via Zoom at 10 a.m. to get more information on what's for sale, a better idea of what's included with various sponsorships, tips on how to identify what events work best for you, and more. This session will help you make the best decision about purchasing a sponsorship for 2021. Even if you don't plan to purchase an event at this time, it's a great way to learn more about our upcoming events and meetings!

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Celebrate our

Dynamic Maintenance

professionals with the Dynamo

Maintenance Appreciation NIGHT Wednesday, June 23 @ 7:30 p.m. Houston Dynamo vs. Portland Timbers BBVA Stadium 2200 Texas Ave., Houston, TX 77003 Check in opens at 7 p.m.

Registration fee: $50/person, management only, includes admission to the Dynamo game, food & beverage voucher and more! Visit www.haaonline.org for details and to register. Sponsored by Chadwell Supply, Matrix Construction, Texas Apartment Pools, The Liberty Group and Waste Consolidators

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AN EVENING FOR RECONNECTING AND CELEBRATING THE 2021 PRESIDENT JOHN BORIACK, OFFICERS, BOARD OF DIRECTORS AND THE PRODUCT SERVICE COUNCIL

Gala 2021

Presented by

Premier Sponsors CENTURY A/C SUPPLY

CRESTMARK CONSTRUCTION SERVICES

LOWE’S PRO SUPPLY

Friday, June 11 7 . . 11:30 . . Ballroom at Bayou Place P M TO

500 TEXAS AVENUE

COCKTAIL ATTIRE WWW.HAAONLINE.ORG/GALA

RELIANT

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Calendar HAA Education, Events and Meetings SCHEDULE

JUNE S M T 1 6 7 8 13 14 15 20 21 22 27 28 29

W 2 9 16 23 30

T 3 10 17 24

F 4 11 18 25

S 5 12 19 26

JULY S M

W T 1 4 5 6 7 8 11 12 13 14 15 18 19 20 21 22 25 26 27 28 29

F 2 9 16 23 30

S 3 10 17 24 31

JUNE 2

New Supplier Member Orientation Wednesday, June 2 10 a.m. Via Zoom All new supplier members welcome. Ambassador ONE Society Happy Hour Wednesday, June 2 3:30 to 5 p.m. Location: Kirby Ice House Memorial City 1015 Gessner Road Contact Amanda at asherbondy@haaonline.org for details.

Avenues: Main Street – Session 1 Socially Distancing Does Not Have to Mean Emotionally Distancing Too! with Jackie Ramstedt Thursday, June 3 8:30 a.m. to noon See Page 22 for details. Sponsored by Best Plumbing Legal Lowdown Thursday, June 3 Via Zoom See Page 23 for details. Sponsored by FSI Construction

Introduction to Excel Wednesday, June 9 8:30 a.m. to noon

Resident Relations Committee B Meeting Wednesday, June 9 Via Zoom

Avenues: Marketing Place – Session 1 The Retention Reinvention with Katie Rigsby Tuesday, June 15 8:30 a.m. to noon See Page 22 for details. Sponsored by ALN Apartment Data

HAAPAC Meeting Thursday, June 10 Noon to 1 p.m. Sponsored by Texscape Services

2021 HAA Gala Presented by Camp Construction Services SOLD OUT Friday, June 11 The Ballroom at Bayou Place 500 Texas Ave., 77002 The Houston Apartment Association cordially invites you join the 2021 HAA President John Boriack and the 2021 HAA Officers, Board of Directors and Product Service Council Officers to celebrate the 2021 leadership. See Page 18 for more information. Presented by Camp Construction Services. Premier sponsored by Century A/C Supply, Crestmark Construction Services, Lowe’s Pro Supply, and Reliant.

Legislative Committee Monday, June 14 2 p.m.

Expert Exchange: Hurricane Prep and Insurance with Crestmark Construction Wednesday, June 16 Noon Via Zoom, Facebook Live and YouTube (subscribe to HAATV).

Avenues: Leadership Lane – Session 1 Does your Job Require High Emotional Labor? with Susan Weston Thursday, June 24 8:30 a.m. to noon See Page 22 for details. Sponsored by Texas Southwest Floors

HAA NEXT Young Professional Development Breakfast Friday, June 25 8:30 a.m. to 10 a.m. Join popular industry guest speaker Bill Nye for the June NEXT event..

Blood Drive Wednesday, June 23 8 a.m. to 1 p.m. Come by the HAA office to donate blood at any time between 8 a.m. and 1 p.m. that is convenient for you.

Maintenance Appreciation Night Wednesday, June 23 7:30 p.m. BVA Stadium 2200 Texas Ave., 77003 Program fee: $50 per person Management Only We’re showing our dynamic maintenance professionals our appreciation for their hard work with an evening at the BVA Stadium to watch the Houston Dynamo take on the Portland Timbers. Our maintenance teams deserve it! Tickets are $50 per person. See Page 17 for details. Sponsored by Chadwell Supply, Matrix Construction, Texas Apartment Pool Services, The Liberty Group and Waste Consolidators.

Auction 101 Tuesday, June 29 10 a.m Via Zoom See Page 16 for more details. Sponsorship Auction Online Wednesday, June 30 Via 32Auctions.com See Page 16 or visit www.haaonline.org/sponsor for more details.

UNLESS OTHERWISE NOTED, all events meet at our Dinerstein Reed Prokop Education Center, 4810 Westway Park Blvd., second floor, in either the Direct Energy and Liberty Personnel & Executive Search or the Camden and Michael Stevens Interests Room. Meetings located at the HAA Offices, 4810 Westway Park Blvd., first floor, will be held in the Redi Carpet and Winograd Families/Judwin Properties Conference Room. See www.haaonline.org for an interactive calendar. 20

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Please note that dates and times are subject to change. Check the calendars at www.haaonline.org for the most up-to-date information.

For the most up-to-date information, see the calendar on the HAA website:

www.haaonline.org

JULY 1

Legal Lowdown Thursday, July 1 3 p.m. Via Zoom See Page 23 for details. Sponsored by Texas Southwest Floors

NEXT Committee Meeting Thursday, July 8 6 p.m.

Introduction to Excel Wednesday, July 21 8:30 a.m. to noon

Expert Exchange Wednesday, July 21 Noon Via Zoom, Facebook Live and YouTube (subscribe to HAATV) Now on the third Wednesday of each month.

Management Orientation Webinar Thursday, July 1 Contact members@haaonline.org for more information. Sponsored by Texas Southwest Floors

Steering Committee Meeting Tuesday, July 13 Noon

14-15 Certified Pool Operator (CPO) Wednesday, July 14 and Thursday, July 15 8:30 a.m. to 4 p.m.

Independence Day Observed The HAA Offices will be closed in observance of the July 4 holiday.

Resident Relations Committee A Meeting Wednesday, July 14 2 p.m. Via Zoom

7 New Supplier Member Orientation Wednesday, July 7 10 a.m. Via Zoom All new supplier members welcome. Contact members@haaonline.org for more information.

20 Avenues: Marketing 2 Tuesday, July 20 8:30 a.m. to noon

Ambassador ONE Society Happy Hour Wednesday, July 7 3:30 to 5 p.m. Kirby Ice House Memorial City 1015 Gessner Road Contact Amanda at asherbondy@haaonline.org for details.

29 TopGolf HAAPAC Fundraiser Thursday, July 29 TopGolf 1030 Memorial Brook Blvd., 77084 It’s not golf – it’s TOPGOLF! Give it a shot “fore” a cause, the Houston Apartment Association Political Action Committee. Thank you to the many sponsors for this event. See Page 25 for details.

22 Expo Committee Meeting Thursday, June 22 3 p.m. Go-Getters Meting Thursday, July 22 4 p.m. Location: TBA See Page 62 for more information. Sponsored by American Fire Systems and Hire Priority

27-28 Leasing 101 Tuesday, July 27 and Wednesday, July 28 8:30 a.m. to noon

Suppliers: Get online then back in the action with the HAA Sponsorship Auction on Wednesday, June 30 Mark your calendar now for June 30 and let your customers know you are ready to network again. Get back to business by buying sponsorships for HAA meetings and events.

See Page 16 for more details. www.haaonline.org

June 2021

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Sponsored by

Follow a road that fits you career journey with Avenues. The Avenues series of seminars feature some of the best nationally-acclaimed speakers in the industry with learning sessions for every level of multifamily professional. Annual Property Subscriptions are available with unlimited attendance for all on-site property staff to all sessions at discounted prices: • Only $199 per year per property for properties with fewer than 200 units • Only $399 per year per property for properties with 200 to 350 units. • Only $450 per year per property for properties with more than 350 units. If you need a single workshop, individual sessions are priced at only $50 per person, a real steal for quality education.

Look for the class schedule and online at www.haaonline.org for details. Contact the HAA Education Department at education@haaonline.org or register online at www.haaonline.org.

Main

Maintenance

Main Street Main I June 3 Jackie Ramstedt Socially Distancing Does Not Have to Mean Emotionally Distancing Too!

BLVD

Maintenance Blvd Maintenance I September 28 Mark Cukro Intermediate Electrical

Main II July 13 Wesley Aleshire Crucial Techniques for Virtual Leasing in 2021 Main III October 27 Teri Norvell The Mental Makeover

Maintenance II October 13 Chad Moulin Maintenance Manners Maintenance III November 17 Mark Cukro Intermediate HVAC

Livestream Viewing or In-Person See www.haaonline.or g fo

Leadership

Leadership Lane Management I June 24 Sue Weston Does your Job Require High Emotional Labor? Management II August 5 Katie Rigsby Leadership vs Management Management III December 14 Amy Kosnikowski Dilisio Play To Your Team’s Strengths: Adapt Your Leadership Style To Bring Out The Best in All

Marketing

Marketing Place Marketing I June 15 Katie Rigsby Retention Reinvetion Marketing II July 20 Rick Ellis Creative Concessions Marketing III August 17 Amy Kosnikowski Dilisio Hustle, Work Smarter and Other Top Habits of Successful Leasing Superstars

r details.

inar? 0 m e s e n o t s ju d e Ne ssions are priced at only $5

tion! Individual se l for quality educa ea st al re a , n so er per p

We’re Back o n Classes start the Road! in June

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Mark your calendars!

June 3 July 1 August 5 September 2 October 7 November 4 December 2

Get the lowdown, virtually! 2021 is sure to be another bumpy ride, with many legal implications for the multifamily industry. Stay up to date and in the know via this new monthly series. Join Howard Bookstaff virtually for an update on all things legal, from eviction procedures to local, state and federal law changes.

First Thursday of every month at 3 p.m. Program fee: $45 per person Annual Property Subscription available: $500 per property

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BE A PART OF THE NEXT GENERATION OF HAA LEADERSHIP. This niche group within HAA is dedicated to the networking and professional development needs of HAA’s young professionals and it is open to all members. Network with your peers and grow your career together among the next generation of HAA leadership! To learn how to become involved with NEXT, see online at www.haaonline.org/next.

NEXT Mission Statement: A network of young professionals committed to the growth of future leaders with the Houston Apartment Association through education, peer-to-peer networking, and legislative and community involvement.

NEXT Co-Chairs:

HAA NEXT programs include free networking events held at various venues across Houston and low-cost Professional Development Breakfasts held virtually or at the HAA Education Center. The Professional Development programs feature special guest speakers on timely topics relevant to enhancing and furthering your multifamily industry career.

Amanda Kelly, CAS, Brandt Electrical A/C & Heating Services

Register online at www.haaonline.org/next or email us at events@haaonline.org for more information. We look forward to meeting you!

Ruha Vohra, NALP, CAM, Veritas Equity Management

Upcoming NEXT Events: June 25 Professional Development Breakfast August 5 NEXT Spelling Bee: HAAPAC Fundraiser October 8 Professional Development Breakfast: Master Panel featuring HAA Past Presidents December 2 Holiday Mix-N-Mingle

cial! o S t e G

Use

t young

ligh to high

Gen T X E N . #HAA l media cia

s on so

ional profess

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It’s not golf – it’s TOPGOLF! Give it a shot “fore” a cause Thanks to our sponsors: Top Sponsors Contractors Inc Outdoor Elements

Hole-in-One Sponsor Green Mountain Energy Best Team Spirit Sponsors Camp Construction Services Fidus Construction Services Last Place Award Sponsor Gemstar Construction Welcome Sponsor ApartmentData.com

It’s back for the PAC! Join us at Houston’s premiere golf entertainment complex for a fun-filled afternoon with the favorite twist to a traditional game, all while supporting the Houston Apartment Association Political Action Committee – your local PAC for the apartment industry. Awards: Team Awards – 1st, 2nd, 3rd Best Male Best Female Last Place Best Team Spirit

Show us your team spirit for a chance to win!

Beverage Sponsors Century A/C Supply Cotton Commercial USA Lunch Sponsors American Fire Systems CORT Furniture Team Awards Sponsors Apartments.com Lowe's Pro Supply Texas Southwest Floors Best Male & Female Award Sponsors SafeRent Solutions Valet Living

Payment must be made by personal credit card or personal check payable to HAAPAC. Payment must accompany registration. HAA is prohibited from accepting corporate contributions for PAC events. Name __________________________________________________ Company________________________________________________ Phone (_________)________________________________________ MC____ Visa____ AmEx____ Discv_______ Credit Card #______________________________________________ CC Security Code____________ Expiration Date_______________ Name on Card_____________________________________________

FEES (include three hours of TopGolf, heavy appetizers, first drink and dessert) Please select: o Teams of up to six – High Top: $550 per team/Includes high top table and chairs; located in center of each floor. o Teams of up to six – Lounge: $650 per team/Includes cushioned lounged seating; located on sides of each floor. Name__________________________________________________ Company________________________________________________

Thursday, July 29 TopGolf Houston - Katy

Name__________________________________________________ Company________________________________________________ Name__________________________________________________

1030 Memorial Brook Blvd. Houston, TX 77084

Company________________________________________________

11 a.m. to 3 p.m.

Name__________________________________________________

*Please note this event is open to sponsors and players only, no spectators.

Company________________________________________________ Name__________________________________________________ Company________________________________________________ Name__________________________________________________ Company________________________________________________ Mail completed form and payment to: HAAPAC, 4810 Westway Park Blvd., Houston, Texas 77041. Credit card registrations may be emailed to events@haaonline.org; payment must accompany registration.

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Industry Update from the NATIONAL APARTMENT ASSOCIATION and the NATIONAL MULTIHOUSING COUNCIL

ADMINISTRATION ROLLS OUT NEW RENTAL ASSISTANCE GUIDELINES The pandemic is forcing industry leaders to rethink the way apartments are designed

ON MAY 7, 2021, the Biden Administration announced the allocation of an additional $21.6 billion for emergency rental assistance that was passed earlier this year through the American Rescue Plan Act, which is referred to as Emergency Rental Assistance 2 (ERA 2) by the United States Department of Treasury (USDT). With the new monetary allocation, USDT released updated guidance which contains new program requirements for grantees who distribute rental assistance. The new guidance removes a number of barriers that the rental housing industry has called out, such as prohibiting programs who receive ERA 2 from denying assistance to eligible residents solely because they reside in federally assisted housing. This ensures that the nation’s most vulnerable renters remained stably housed throughout the remainder of the pandemic. Additionally, the new guidance establishes an online hub of local emergency rental assistance program links to make it easier for renters and landlords to find programs in their area. There are several problematic requirements that were included in the newly published guidance. The document allows ERA 2 programs to offer direct-to-resident assistance first and immediately – not requiring programs to go to housing providers beforehand. Additionally, the guidance continues to allow programs distributing ERA 2 to offer direct-to-resident assistance when a housing provider opts out of participating in an ERA program. However, if an ERA 2 grantee chooses to seek the cooperation of housing or utility providers before providing assistance directly to residents, Treasury strongly

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June 2021

encourages the grantee to apply the same ERA 1 requirements. NAA encourages members and affiliates to reach out to their state or local program and encourage grantees to choose to continue to seek the cooperation of housing providers, to ensure direct payments to housing providers continue. Another new requirement in the guidance is that programs must prohibit the eviction of renters for nonpayment in months for which they receive emergency rental assistance. Additionally, Treasury strongly encourages grantees to require that housing providers not evict residents for nonpayment of rent for 30 to 90 days longer than the period covered by the emergency rental assistance as a condition of receiving payment. While some grantees have this in place, affiliates and members should expect more programs to enact these protections in the near future. Other noteworthy changes in the guidance and White House fact sheet include: • Changes the required response time for housing providers electing to participate to 7 days when reaching out by mail and 5 days when reaching out by phone, text, or email. Previously, programs were required to wait 14 days when reaching out by mail or 10 days when reaching out by phone, text, or email before offering relief to a tenant directly. • Widens the scope of qualified expenses to include “moving expense, security deposits, future rent, utilities and the cost of a transitional stay in a hotel or motel when a family has been displaced” and does not require the qualified expense be related to COVID-19 outbreak. • Strongly encourages grantees to avoid establishing burdensome documentation requirements that are likely to be barriers to

participation for eligible households, by allowing programs to verify eligibility of low-income renters based on readily available information or “proxies”, such as the average income in the neighborhood in which they live. • Requires programs to prioritize assistance to low-income households and those with members who have been unemployed for more than 90 days. To help ensure that assistance is reaching those who most need it most – especially those with incomes below 50 percent of the area median income – grantees are now required to report how they will achieve the required prioritization of assistance. • Encourages additional legal services and support to hard pressed residents. HUD is developing a $20 million demonstration to provide legal assistance to low-income residents at risk of or subject to evictions. More information on this new program can be found here. • Advances the Nation's understanding of evictions in the marketplace. HUD will continue to build out a research agenda for helping the field better understand the prevalence of evictions and the disparate impact they have on disadvantaged communities. This includes assessing how the federal government could develop a national database of evictions. NAA continues to communicate with USDT and Congress on changes and additional clarifications that should be made to ensure that the program continues to be executed in an efficient and timely manner. If you have any questions regarding the emergency rental assistance programs, please contact Jodie Applewhite at japplewhite@naahq.org. www.haaonline.org

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Legislative Update, continued from Page 9 The goal of the apartment industry on this

issue will likely involve two specific objectives. First, Houston should avoid a large, immediate rate increase. Apartment properties that do not submeter or allocate water and sewer expenses are locked into lease agreements that cannot account for sudden, unexpected rate increases. Owners will need time to work cost increases into their price structure. In other words – don’t tell us in June that you’re raising our rates 30% in July. If a major increase is necessary, schedule it to take effect next year and give customers time to budget for it. Second, Houston should avoid at all costs the temptation to ease the burden on single family homeowners by loading an unfair share of the cost increase onto multifamily residents. Cities are run by elected officials who know that homeowners vote and are frequently tempted to subsidize them with apartment residents’ money. Houston’s use of general fund revenue to pay for garbage service only available to single-family homeowners is a classic example of this. Apartments should always have lower water and sewer rates than single family homes because apartments cost the city less. Providing water and sewer service to a neighborhood of 100 homes requires 100 taps on the water main, 100 taps on the sewer main, 100 pipes going through 100 meters, which must be read every month to generate 100 bills and 100 payments for the city to process. By contrast, a 100-unit apartment property might have two meters, which generates one bill to a single entity, resulting in one payment. More importantly, apartment properties have a lower “peak demand” than single family homes, partly because landscape irrigation and swimming pool equipment are professionally controlled. In the world of water and sewer costs, system capacity is driven entirely by peak demand – the greatest amount of water that will be drawn from the mains at any specific point in time on the highest-use day of the year. As Houston navigates though uncomfortable and inevitable water and sewer rate increases, the Houston Apartment Association will not be able to prevent them from happening. But we hope to be able to make sure the increases are fair and that owners have an opportunity to budget for them. Want to help choose the officials who make water and sewer rate decisions for your property? Contribute to the HAA Political Action Committee and get involved! Find more information at www.haaonline.org/haapac. www.haaonline.org

June 2021

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The Honors are back November 11! T

T T

Online nominations opening soon! Watch your email, ABODE and www.haaonline.org for up-coming details and deadlines

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As the song “Feeling Good” suggests, 2021 is a new day and the Houston apartment market’s rent level is finding new life as the overall rent level improved by $15 during the first quarter.

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It’s a

new

dawn It’s a new

day By

It’s a new market and we’re feeling good.

BRUCE MCCLENNY, ApartmentData.com

Reversal of Fortune 2021 We have turned the corner on another year and thank goodness! The phrase “hindsight is 20/20” no longer seems appropriate or useable. Who would ever want to look back on that year? But let’s, just briefly, to understand where we have been. 2020 was a year of unimaginable physical, emotional, mental and financial hardships. This year, with vaccinations and a growing mindset to reopen and reconnect begins to conjure up a theme that the song “Feeling Good” by Nina Simone fits. 2021 is a new dawn, a new day, a new world, a new life and I’m feeling good. The economic lockdown and the social isolation of 2020 sent the Houston apartment market in a fundamental freefall. The chart on the next page shows the change in rent level by class. During 2020, overall rent declined by $9 (-1.0%), which was predominantly influenced by Class A’s $95 decline representing a -6.2% trend. Class B’s rent level fell by only $7, whereas Class C and Class D were able to overcome the impact of the economic lockdown and add to their rent levels by $8 and $1, respectively.

Image © Dilok Klaisataporn | iStock by Getty Images

www.haaonline.org

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Change in Rent Level By Class

As the song “Feeling Good” suggests, 2021 is a new day and the Houston apartment market’s rent level is finding new life as the overall rent level improved by $15 during the first quarter. Class A is leading the rent renaissance having gained $35 in the first quarter, which is a great start on recovering the losses of 2020. Class B more than recovered its deficit of 2020 by adding $13 during the first quarter. Class C has the distinction of having the best rent performance over the last five quarters, adding $8 during the pandemic year and another $4 so far this year. Class D is absent and cannot hear the “Feeling Good” song that the other classes can, as rent has dropped by $6 during 2021.

$20

$15 $15 Class A $95 $10

Class C $5 $0

Occupancy Under Pandemic Rules Houston’s overall occupancy has been stuck in the 88% to 89% range since the beginning of 2020. The delivery of over 21,000 new construction units with an absorption of 11,500 units fosters a nogrowth occupancy scenario. You can see in the graph below how a pandemic with an economic lockdown timed at the height of

-$5

Class D $1

2020 2021 Class A $35 Class B $13

-$10

Class C

-$9

Class D $6 -$15

*YTD as of March 31, 2021

Houston Overall Occupancy

92.0%

90.0%

Class B $7

Class B 91.4%. 89.3%

89.1% 88.5%

88.7%

Class C 90.3% 88.9%

88.5%

88.0%

86.0%

84.0% 82.7%

82.6% 82.1%

82.0% 80.3% 79.7%

80.0%

79.0%

78.0% Class A Stable 90.3%

Dec 2019

Mar 2020

Jun 2020

Overall Occupancy (%) 32

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Sep 2020

Dec 2020

Mar 2020

Class A Occupancy (%) www.haaonline.org

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the 2020 leasing season plummets Class A’s occupancy from 82.1% in March to 79% in June. In March and April 2020, Houston suffered 361,400 lost jobs. These job losses spiked Houston’s unemployment rate to 14.3%. Pre-pandemic unemployment in February 2020 was 3.9%. Despite a demand beatdown and job growth numbers mired in negative territory for all of 2020, Class A began to climb out of June 2020’s bottom of 79%. The Census Bureau just released metro population growth numbers for 2020 that begins to add more clarity as to how Houston was able to generate 11,466 units of absorption, which was the force driving Class A occupancy to 80.3% by year end. During the pandemic, there were anecdotal stories of people moving out of the large metro areas, such as New York, Los Angeles and Chicago to the Sun Belt metros of Phoenix, Dallas-Fort Worth and Atlanta. The Census Bureau report shows that Houston had in-migration of 44,347 people during 2020, which ranked third in most in-migration behind Phoenix (88,970) and Dallas-Fort Worth (74,920). These gains came at the courtesy of New York losing 170,637 people, Los Angeles losing 118,894 and Chicago losing 72,692. Class A occupancy continued to improve to 82.6% during the first quarter of 2021 when 4,000 units were absorbed. Can 2021 Keep Feeling Good? This year is off to a great start, and the stage is set with fiscal stimulus, greater mobility and increasing vaccinations to drive an ever-improving outlook for Houston. Dr. Bill Gilmer with the Institute for Regional Forecasting at the University of Houston’s Bauer College of Business has re-jiggered his 2021 employment forecast for the Houston Metro Area to grow by a range from 4.2% to 6.6% or 125,800 to 196,500 jobs. Gilmer expects a significant surge in job growth for sectors that were most impacted by social distancing, such as restaurants, bars, hotels, health care and air transportation. To support Gilmer’s rosier forecast, the Federal Reserve Bank of Dallas predicts that Texas employment will grow by 6.6% in 2021. The Federal Reserve Bank of Dallas did not break out their forecast by cities, but these two forecasts bode very well for H-Town! There are still significant supply issues to deal with, as there are 21,000 new units in lease-up that are 35% occupied. In addtition, there will be approximately another 15,000 units delivered in 2021. However, supply issues seem less theatening when in-migration and job growth come together as described above. Given this new day scenario for economic revival in 2021, my previous forecast for absorption and rent growth needs revision considering they were conceived under the assumpiton that job growth would only be 2% or 60,000 jobs. Under Gilmer’s and the Federal Reserve Bank of Dallas’ job growth forecasts, Houston’s job growth will at least double from my original assumptions. Instead of 2% or 60,000 jobs, it’s conservatively 4% percent or 120,000 jobs. This new level of job growth could support 18,000 units of absorption, which is 2,000 units short of a 6 to 1 ratio. The 2,000 unit deficit in absorption is figured in due to the eviction moratorium expiring and creating an artificial surge in move-outs. With this type of supply/demand dynamic, overall occupancy climbs to 90.6% by year end. My original 2021 forecast for overall rent growth was 1.5%, now my “Feeling Good” forecast for rent growth is 3% to 4%. Bruce McClenny is president of ApartmentData.com. For more details, call 281-759-2200, email bruce@apartmentdata.com, see Marketline on Page 75 and subscribe to his YouTube channel at https://www.youtube.com/channel/UCaPmY9AevdjCpqe4UeQU7xw/featured

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Rising Up

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The Driscoll at River Oaks

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15th Street Flats

Photos by MORGAN TAYLOR, HAA Staff

The multifamily industry is rising to new Heights (and Montrose, and River Oaks ...) At press time, here’s what’s recently opened in the central Houston area with photos from a few properties inside these hip inner loop markets.

Alta West Alabama

Name Avondale Highline Chelsea Museum District Driscoll At River Oaks, The Montrose At Buffalo Bayou, The Residences At La Colombe d'Or Travis, The Alexan River Oaks Alta West Alabama Crimson Novel River Oaks Reverie At River Hollow Alta Med Main 15th Street Flats Alexan Lower Heights Alexan Memorial Alta Washington Broadstone Sawyer Yards Durham Heights Ellison Heights Foundry On 19th Standard In The Heights, The Taylor Heights Vic At Interpose, The Exchange,The

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Zip Code 77006 77006 77019 77019 77006 77002 77027 77027 77027 77027 77027 77025 77008 77007 77007 77007 77007 77008 77008 77008 77007 77007 77007 77026

Submarket Montrose/ Museum/ Midtown Montrose/ Museum/ Midtown Montrose/ Museum/ Midtown Montrose/ Museum/ Midtown Montrose/ Museum/ Midtown Montrose/ Museum/ Midtown Highland Village/ Upper Kirby/ West U Highland Village/ Upper Kirby/ West U Highland Village/ Upper Kirby/ West U Highland Village/ Upper Kirby/ West U Highland Village/ Upper Kirby/ West U Med Center/ Braes Bayou Heights/ Washington Ave Heights/ Washington Ave Heights/ Washington Ave Heights/ Washington Ave Heights/ Washington Ave Heights/ Washington Ave Heights/ Washington Ave Heights/ Washington Ave Heights/ Washington Ave Heights/ Washington Ave Heights/ Washington Ave I-69 North

Alta Washington

Management Units Urban Genesis 50 Greystar 325 Hanover 318 Z R S Management 224 Greystar 265 Madison Marquette 328 Greystar 383 Wood Residential 304 Gables Residential 295 Greystar 326 Fein 304 Wood Residential 338 Greystar 337 Greystar 375 Z R S Management 356 Wood Residential 204 Greystar 327 Greystar 281 Greystar 152 Greystar 284 R P M Living 301 Lennar Multifamily Comm 363 Hunington Residential 168 N R P Group 300

Move Ins 10/2020 04/2021 08/2020 11/2020 08/2020 04/2020 01/2021 04/2021 06/2020 01/2021 08/2020 10/2020 08/2020 06/2020 04/2021 11/2020 06/2020 03/2021 04/2021 02/2021 05/2020 10/2020 06/2021 06/2021

Category Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened Recently Opened

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All photos this page: Novel River Oaks

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Foundry on 19th

The Montrose at Buffalo Bayou

Residences At La Colombe d'Or

Ellison Heights

Durham Heights

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Looking at the top amenities, renters really prioritized outdoor areas as part of their living situations last year to ride out the pandemic.

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How the Pandemic Has Changed What Renter Want What renters want in their amenities has shifted significantly. What are they looking for today? By

NATALIE CARIOLA, Zumper

Image © Katarzyna Bialasiewicz | iStock by Getty Images

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t’s no secret that the pandemic has made an impact on almost every aspect of Americans’ lives, from work, to school, to finances, to living situations and beyond. With all of that comes a change in mindsets, priorities and even preferences. One of the industries impacted most by the pandemic was the rental market. Over a year since the start of COVID-19, renters interact differently with their rental lifestyles, including amenities. To provide an overview of what renters want in an apartment, we took a look at how renters interacted with apartment amenities during their searches for a new home last year. This analysis includes which amenities renters prioritized the most during the pandemic, how much of a premium those desired amenities added onto listing prices and how generational age groups differed from each other. These findings can help property managers and apartment owners understand what is important to renters so that they can provide the best rental experience. The Top Amenities: More Outdoor Spaces, Please Looking at the top amenities, renters really prioritized outdoor areas as part of their living situations last year to ride out the pandemic. Six of the top 10 amenities with the largest year-over-year search rates were related to having an area to safely get some fresh air. Outdoor spaces took the top spot with a +143% growth rate in searches. The other most sought-after outdoor amenities included roof decks at +91%, balconies at +87%, garden at +86%, swimming pools at +78% and decks at +73%. While parking and in-unit laundry are on the list of the most desired amenities, this fact was only exacerbated by the pandem-

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The amenity that added the highest rent increase to a listing last year was in-unit laundry, averaging $170 more. Meanwhile, garage parking followed suit with an added cost of $149. Of the outdoor areas, the amenity that had the highest premium were gardens, adding $144 more on average to a listing.

ic. With slashed interest rates at dealerships and public transportation to be avoided if possible last year, more people likely bought cars in 2020 and needed parking spaces. Additionally, in-unit laundry became more important than ever when stay-at-home orders kept us from going to public laundromats. An unexpected amenity that made it onto the most desired amenities list was storage at number two. This could be a result of working from home, as many renters upgraded their desk setups and were looking to store old furniture. Additionally, as many renters sheltered in place, they likely had a lot of things they weren’t able to use since they couldn’t leave their homes, like bulky clothes, shoes and seasonal items like holiday decorations, so having extra storage was highly sought after. Average Cost Added Per Amenity The amenity that added the highest rent increase to a listing last year was in-unit laundry, averaging $170 more. Meanwhile, garage parking followed suit with an added cost of $149. Of the outdoor areas, the amenity that had the highest premium were gardens, adding $144 more on average to a listing. If a renter wanted the best deal for an outdoor area, a balcony added an average of $35 to a listing, over four times less than the added cost of a garden. Meeting somewhere in the middle, having a swimming pool as an outdoor area added $94 to a listing. The Data Among Generations While amenities related to laundry were the common threads throughout these different age groups, there were some stark differences. For renters in the Generation Z age

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group, aside from in-unit laundry, the other amenities that had the largest year-over-year search rates were walk-in closets, air conditioning and dishwashers. Generation Z renters seem to really care about closet space, staying cool in their apartments and have no interest in hand washing their dishes. And while all the other age groups had a parking-related amenity as one of their most sought after in 2020, Generation Z renters did not, likely because renters at this age can’t afford a car yet, even with last year’s slashed interest rates. Amusingly, while renters in all of the other age groups had in-unit laundry as their number one amenity, millennial renters prioritized walk-in closets the most with this amenity growing nearly 300%. Notably, walk-in closets and dishwashers are the most desired amenities in the Generation Z and millennial age groups only, so it seems people under the age of 40 really hate doing dishes. Additionally, hardwood flooring was a top amenity that was exclusive to millennial renters. Some unique top amenities that Generation X renters searched for in their next home were swimming pools and furnished apartments. As many renters in this stage in life are experiencing empty nest syndrome, they are looking to downsize from a house with multiple bedrooms to a smaller apartment. With the swimming pool and furnished amenities sitting uniquely at the top of the most desired for Generation X renters, this shows that the parents in this age group are finally ready to relax and have some welldeserved down time. For baby boomer renters, central heat was a distinctive amenity that made it to the top for this age group only. As bodies age, keep-

ing warm and well circulated is essential. Additionally, baby boomers saw the largest growth rates in searches for in-unit laundry. As the effects of COVID-19 are more dangerous to older generations, renters in the baby boomer age group should be more careful when going to more public spaces so having in-unit laundry helps keep them safe. Whether you are a property manager, an apartment owner or an investor, knowing what is important to those looking for a new home is helpful in making the renting experience as seamless and enjoyable as possible. Natalie Cariola, chief sales officer at Zumper, is a seasoned real estate technology executive with more than 15 years of experience, including stints at RentPath, Move, Inc., ForRent.com and Compass. She joined Zumper in 2016, as vice president of sales before being promoted to chief sales officer in November 2020. As chief sales officer at Zumper, Cariola is responsible for the growth of the sales organization as well as overseeing Zumper’s customer success team and sales enablement. Zumper is the fastest growing and third largest rental platform in North America, serving one in three U.S. adults. No company has made renting an apartment as seamless as Zumper has for both landlords and renters. Zumper is on a mission to make renting an apartment as easy as booking a hotel room. Learn more about Zumper by visiting them online: http://www.zumper.com/.

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Images provided by Lodgeur

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Renting furnished lodging in apartment communities isn’t new. For decades, corporate housing providers housed company employees and expatriates.

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How multifamily operators can meet the demand for furnished ondemand housing. Renters want flexibility. By

SÉBASTIEN LONG, Lodgeur

n my article for last month’s issue of ABODE, we explored changes accelerated by COVID-19 in work, life and travel, and the challenges and opportunities this creates for the multifamily industry. Specifically, we identified the opportunity to convert vacant inventory into furnished, on-demand housing to cater to today’s consumers looking for flexibility and convenience. In this article, we explore the different options available to communities to capitalize on this market opportunity and the operational considerations. What is multifamily hospitality? Renting furnished lodging in apartment communities isn’t new. For decades, corporate housing providers housed company employees and expatriates. More recently, sites such as Airbnb popularized short-term rentals in urban markets as an alternative to staying a hotel for leisure travelers. Today, the lines are increasingly blurred between business and leisure travelers, with the rise

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of a work-from-anywhere remote workforce. That’s why we call this segment “multifamily hospitality,” allocating a portion of a community’s inventory to furnished lodging rented flexibly. Is your community a fit? Are your apartments desirable? But what are these renters looking for? Firstly, the golden rule of real estate “location, location, location” applies even more strongly to multifamily hospitality customers. Is the neighborhood desirable and convenient for business and leisure travelers? A good rule of thumb is to see if there are hotels nearby and their respective flags (the more expensive, the greater the opportunity). In Houston, key areas of demand include Downtown, Midtown, the Museum District and Texas Medical Center, and Galleria/Uptown. Secondly, the communities should be recently built or renovated to high quality, and include desirable amenities such as a swimming pool and gym. Finally, the apart-

ments themselves should offer conveniences such as parking, a dishwasher, a washing machine, a clothes dryer and fast internet access. And of course, everyone loves quiet units with natural light, nice views and high ceilings. The only difference we’d note is that temporary residents won’t usually pay a premium for a larger floorplan since they travel light and don’t need the additional space. Setting up the furnished apartments The items that you buy to furnish, decorate and equip the apartments will have the greatest impact on the revenues that you generate. Our proprietary research shows that how an apartment looks is the greatest determinant of a customer’s willingness to pay. Furthermore, how it is equipped and its overall comfort will impact their review scores which is the second most important revenue driver. On average, there are 125 purchasing decisions that go into equipping a typical onebedroom apartment. Knowing how to allo-

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Images provided by Lodgeur

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If great interior design and photos are key to creating a desirable listing, then distribution is key to getting bookings. This means having your listing appear across the multiple different websites that people use to find and book accommodations. The 800-pound gorilla in this space is Airbnb.

cate each dollar judiciously will help to maximize returns on investment. The three most common mistakes are overspending, sparsely furnished spaces that are uninviting and not using professional photographers. Marketing the furnished apartments Once you have your listing photos, you will need to write enticing copy and price your listing properly. Data providers such as AirDNA and Transparent can help with market data. Revenue management tools such as PriceLabs and BeyondPricing can help to save time and increase income through dynamic pricing tools that automatically adjust rates according to local market supply and demand, seasonality, day of the week and special events. These tools also allow for custom rules governing the minimum length of stay, length of stay discounts and advanced customizations based on building or portfolio occupancy. Alternatively, a number of companies provide revenue management as a service, such as Rented. If great interior design and photos are key to creating a desirable listing, then distribution is key to getting bookings. This means having your listing appear across the multiple different websites that people use to find and book accommodations. The 800-pound gorilla in this space is Airbnb. It is an incredibly powerful tool to find both short and extended-stay renters in urban markets and will initially help buildings to acquire the majority of their bookings. But there are multiple other mainstream online travel agencies (OTAs) to consider such as Expedia (Hotels.com, Travelocity, Orbitz), VRBO, and Booking Holdings

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(Booking.com, Priceline, Kayak, Agoda). And there is an ever-growing set of niche sites such as Misterb&b and Furnished Finder, corporate-focused sites such as Reloquest and AltoVita, and furnished rental sites such as Kopa, 2nd Address, and Anyplace. You will need a property management system (PMS) and channel manager to upload your listing information and photos, availability, and prices to each channel. This will save you time and avoid the risk of double booking. OTAs will help you rent your units typically within 24 to 48 hours of going live. They are an incredibly powerful customer acquisition tool, however, the commissions for using these sites can get expensive, up to 15% of the booking value. That’s why having the ability to directly take bookings is important to reduce costs. Over time, direct bookings should drive the majority of your bookings. This can be achieved through search engine optimization, digital marketing and remarketing to past customers. Larger operators will also want to have a sales team to directly approach relocation companies, corporates and convention organizers. Risk management Keeping your community safe from bad actors is critical, whether you’re renting to long-term residents or short-term travelers. If you’re struggling with your occupancy, the last thing you want is for your current residents to be unhappy. Short-term rentals sometimes have a bad reputation, however, this is primarily due to amateur hosts, illegal listings and unprofessional operators. That’s why risk management and customer due diligence are essential elements of a multifamily hospitality program. It’s not sufficient to trust

that the OTA has verified the customers they’ve sent you. At my company, we employ a four-step process to keep communities quiet and safe: 1. Deter bad actors. Fraudsters, criminals and partygoers go for easy targets. The best defense is to avoid these bookings through deterrence, for example, premium pricing, strict house rules, publicizing your security procedures and using fraud prevention tools through your payment processor. 2. Screen renters. In the same way that you need to leave a copy of your driving license to tour a community, renters must supply their ID to book accommodations. Software tools exist to verify the ID’s authenticity and even to employ facial recognition technology to match a selfie to their photo ID. And of course, once you’ve verified a guest’s ID, criminal checks can also be performed. 3. Secure the property. Self-check-ins grew in popularity during the COVID-19 pandemic, however, these can present risks if controls aren’t put in place. Only screened guests should receive check-in instructions and codes to pick up their keys. Traditional realtor lockboxes are not sufficiently secure, since codes are infrequently changed. We recommend smart solutions with unique codes for each guest. It’s not sufficient to only screen renters: staff and service providers also need to be vetted and have their access carefully managed. Finally, proper commercial insurance must be in place to protect for liability and damages to premises. 4. Monitor compliance with rules. It’s important to monitor properties to ensure www.haaonline.org

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If you haven’t been by the HAA website lately, come check us out! While you will recognize some of the same great features such as event registration, job postings, advocacy information and more, we’ve got a whole new look and feel and much more! We will introduce even more innovative features of the new site in the coming weeks and months. So come check us out and please let us know if you have any suggestions for a better member experience.

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One of the biggest shifts communities need to take to run a successful multifamily hospitality program is around the increased expectations of these renters.

compliance with house rules. There are smart devices such as privacy-compliant noise monitoring and tobacco/marijuana sensors that can send alerts to notify a property manager of infractions. Entryway cameras can also be used to verify that guests comply with occupancy limits and pet policies. A hospitality mindset in operations One of the biggest shifts communities need to take to run a successful multifamily hospitality program is around the increased expectations of these renters. Emails and messages should be answered fast: within minutes for high-priority requests. Maintenance issues should be addressed the same day ideally, or as soon as possible for lower priority fixes. Information should be readily available about the community and the surrounding area – similar to a hotel’s guest information book or concierge, but ideally in digital format. Arrival at the community to check-in should be simplified as much as possible: easy parking, 24/7 key pick up and clear instructions to get to the unit itself. What are your options to capitalize on this opportunity? So far, we’ve discussed how to run a successful multifamily hospitality program, but we have not considered how this should be delivered. There are five approaches that property owners can take: 1. Ignore. Some communities may decide it’s not worth the effort or risk, especially if they have very high occupancy rates. If you do, make sure to monitor for illegal subletting by checking lodging websites such as Airbnb, outsourcing to a third party and checking for lockboxes on site. 2. Allow residents. Some communities have allowed residents to sublet, however, we do not recommend this because of the inher-

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ent risks posed by amateur hosts. Plus, consider if you want renters who need this additional income to afford their apartments. 3. Master lease. For decades, communities have rented apartments to corporate housing providers and more recently to short-term rental brands. While this can give you a boost in occupancy and rents, there are good and bad operators – size is often not indicative of professional operations. A corporate lease can also give an illusion of stability for owners. The COVID-19 pandemic resulted in multiple operators going out of business. 4. Do-It-Yourself. This enables operators to maximize potential revenues and control but requires a different set of skills and technology to implement since traditional property managers don’t offer this service. The learning curve and costs may not make it worthwhile. 5. Partner with a specialized manager. Working with a specialized property manager to manage the furnished lodging can provide a better balance of risk and reward versus a master lease or DIY approach. It can generate more revenue in good times versus a traditional lease and eliminates the risk of a default in bad times. Working with a partner instead of a corporate tenant also provides greater transparency into performance. A final note The standard Texas Apartment Association leases prohibits short term rentals from tenants (and again I can’t emphasize how strongly we recommend that communities do not allow subletting by residents). Some property managers have corporate lease documents for commercial operators governing additional conditions and requirements (from occupant screening to insurance). There are three distinct customer segments: short-term rentals, extended stay/corporate housing and indefinite residents (i.e.,

Images provided by Lodgeur

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renting furnished instead of unfurnished). Short-term rentals are more complicated, but they can help to maximize returns by filling short voids between extended stays. That’s what we do – about 70% of our occupancy is 30+ nights. In Houston, stays of 29 nights or less have to pay hotel occupancy taxes to the city, county, state and other localities (currently we pay a total of 17% in Houston). Other localities may have restrictions or licensing requirements, although Texas is pretty strong on property rights. The key for building owners is likely to check with their bank. Certain financial institutions may have a cap on the number of corporate housing or short-term rental operators, typically a 10% of units cap but occasionally up 20% cap. And of course, appropriate commercial insurance should also be in place there may be exclusions on a standard property insurance. Some of the caps may have gone down in the wake of a number of bankruptcies e.g. stay Alfred, Lyric, and Domio. Sébastien Long grew up immersed in his parents’ hospitality business before spending a decade traveling the world digitizing banks and their operating models. Looking for a new challenge, he earned an executive MBA from the University of Cambridge and helped two Silicon Valley unicorns enter the European market. He moved to Houston in 2018, and launched Lodgeur, a company that helps apartment building owners boost their cash flow and property value by converting vacant units into furnished lodging and managing them to attract renters looking for convenience and flexibility. Sébastien can be reached at seb@lodgeur.com.

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Image © Oleksandr Hruts | iStock by Getty Images

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Leasing Automation The battle of the bots. By

PAUL BERGERON

he pandemic has technology implementations that would have taken months or years into just a couple of weeks, and it’s predicted that automation is here to stay. One example: Vendor data from bot providers suggest that bots handle leads more consistently, and set appointments more reliably than humans do, without a break and at low cost. It’s hard to say no, even if the first generation or two of these products are still sorting through the difficulties of handling interpretive idioms. With multiple providers in the market, this Multifamily Innovation Conference – Atlanta (MICA) session compared eight product offerings, with spokespeople addressing technology, purpose, natural language processing and whether bots will soon replace leasing office staff members.

Perry Shmukler, CTO at Diffe.rent, said his product, Lea, automates the entire leasing funnel and drives conversion rates higher while it frees up the leasing team. Ellen Thompson, founder of Respage, has Rentron, a bot designed to get more qualified leads and schedule tours from the website; and ResMate, an end-to-end solution that nurtures leads from the first touch, to scheduling the tour and all the way to the application. Robert Turnbull, founder, president & COO at BetterBot, created a bot intended to rid leasing professionals of 80% of the lowreward, menial tasks they are asked to perform. Paul Yount, industry principal, multifamily at Yardi, offers RENTCafeIQ, which handles as much of the top of the funnel as possible.

Product Descriptions Larry Gorman, president at LeaseHawk, said his product, ACE, helps the leasing time with the top-of-the-leads funnel. It distinguishes high- and low-quality lead activity and allows leasing agents to focus on high-quality activity. Stacy Holden, senior director and industry principal at AppFolio, said that AppFolio’s AI Leasing Assistant Lisa is more than a bot. “She’s part of the leasing team designed to automate the work load and allow leasing staff to spend time on what’s more important while driving NOI,” Holden said. Todd Katler, CEO at Anyone Home, said his company’s product, Concierge, allows customers to trade in the currency they want to use, [and its bot] provides another avenue to create customer engagement via automation or in-person. Mat Nieves, growth and strategic partnerships at MeetElise, said MeetElise replicates human conversation through natural language processing and handles more than just the conversation – it replicates tasks within its system to complete interactions.

Product’s Purpose The panelists mostly highlighted how their products improve performance and touted their nuanced technology, which is mostly based on artificial intelligence (AI), machine learning and, a combination of guided conversations and, for some, natural language processing (NLP). Gorman said that when ACE is used through a conversation mode with prospects, those discussions are going to sound like ones that consumers would have when they are speaking to their technology at home – like into their smart-home speakers or Alexa or Google devices. ACE leverages the text-to-voice synthesis to deliver a natural, human-like process. Holden said Lisa is equipped to pivot during the engagement, and can remember everything the prospect has shared, no matter where or how that dialogue started. She uses NLP to respond to a question or to schedule an appointment.

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On the Scene Photos from TAA Texas Apartment Association One Conference & Expo Wednesday, April 14 through Friday, April 16 in San Antonio Photos by Mark Hiebert and Bob Daemmrich

With the reopening of Texas, TAA’s 2021 ONE Conference was held in person in San Antonio. TAA recognized both the 2020 and 2021 statewide rental housing professionals and supplier company award winners and installed the new TAA leadership. Congratulations to the award winners from Houston: Oscar Fiallos, CAMT, CWS Apartment Homes, 2021 Mary Williams Maintenance Professional of the Year; David Dill, NALP, Veritas Equity Management, 2021 Anita Marcino Leasing Professional of the Year; Robert Martinez, IROP, Rockstar Capital Management, 2021 Bob Ross Independent Owner of the Year; Century A/C Supply (2020) and The Liberty Group (2021), Mike Clark Supplier Partner Companies of the Year; Scott Douglas, CAM, CAPS Creative Property Management, 2020 Rita Kirby Regional Property Manager of the Year; and Roberto Guzman, CAMT Veritas Equity Management, 2020 Mary Williams Maintenance Professional of the Year. Also honored was HAA Past President Clay Hicks, The Dinerstein Companies, who received TAA”s prestigious Frank P. Finch Presidential Award from opening session speaker Terry Bradshaw. Hicks is the TAA president-elect and the third volunteer to receive the award twice.

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On the Scene Photos by SW Management District

March on Crime Luncheon Tuesday, March 30 at Houston Baptist University HAA’s Director of Rental Credit Reporting Tina DeFiore and numerous HAA member property owners and community leaders attended this annual luncheon honoring law enforcement and recognizing the Southwest Management District’s Officers of the Year. The luncheon also honored the new Houston Police Chief Troy R. Finner.

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Do you really know your applicant? Comprehensive applicant screening tools available today can uncover financial and criminal background information. Proper screening can also reveal identity fraud issues, including stolen and fabricated identities, which may result in costly problems. Comprehensive screening using Rental Credit Reporting can also tell you who hasn’t paid rent, who has broken leases and who has received their deposit refund. RCR provides Houston’s apartment industry with the most effective rental credit reporting tool available. RCR was established in 1977 to solve screening problems HAA founders felt plagued the local apartment industry. RCR has unsurpassed data on resident rental histories in the Houston region and gives your leasing staff immediate access to information about which prospects have fulfilled their leases and who have been residents in good standing. The Houston Apartment Association’s Rental Credit Reporting and SafeRent Solutions have partnered to offer numerous searches in one bundled report with immediate and unlimited inquiry access.

a service of

in partnership with

To subscribe or to learn more, call RCR at 713-595-0300, email rcr@haaonline.org or visit www.haaonline.org.

On Site with ABODE

Photos provided by The Dinerstein Companies

THE LANE AT WATERWAY

Honors Awards Property of the Year for a senior living tax credit apartment community.

Property: The Lane at Waterway Owner/Management: The Dinerstein Companies/TDC Management Location: 10100 Six Pines Drive, The Woodlands Units: 163 Built: 2020 Web: www.thelaneatwaterway.com Interesting features: This beautiful property is a treat for The Woodlands residents. Within just a few steps, renters can access all the shopping, eating and entertainment The Woodlands Waterway offers. The Lane at Waterway began leasing in late February, kicking off its leasing with two grand openings with cocktails, hors d’oevures, live music and tours all with social distance guidelines in place as set by the Centers for Disease Control and Prevention. The seven-story building is set on 1.67 acres. It offers one, two and three-bedroom apartment homes, as well as two-story townhomes with street access. Because the community was built during the pandemic, amenities and enhancements were built along the way to cater to today’s renters. Its most unique amenity is are co-working spaces for those who are still, or indefinitely, working from home. Private offices are also available to residents of The Lane at Waterway at an additional monthly charge. Other amenities include a club room, a fitness center, outdoor kitchens and bike storage. Congratulations, The Lane at Waterway!

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June 2021

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I wasn’t exp surprised tha said, laughin business for 1 anything. Fo or get it right don’t need re resident and owner are ha good experie way. I didn’t watching!”

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On the Scene Photos by HAA STAFF

HAAPAC Phoneathon Friday, April 23 at the Houston Apartment Foundation Dinerstein Reed Prokop Education Center The HAA Product Service Council is on the scene. A small group of HAA suppliers gathered for a phoneathon, making calls asking members to support and join the Houston Apartment Association Political Action Committee.

Thank you to our volunteers: Joseph Rodriguez, CAS, The Urban Foresters Doug Oehl, CAS, Flooring Warehouse Blaise Spitaleri, CAS, Gemstar Construction Development Blake Subinsky, CAS, HD Supply Mat Tilley, CAS, WeDoTrash

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Image and font © zvukmedia | iStock by Getty Images

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SUPPLIER PARTNERS SERVING TO FACILITATE GROWTH AND STRENGTHEN THE INDUSTRY. The Product Service Council is a group of active supplier members whose objectives are to promote the active involvement and participation of supplier members. For more information on the council and how you can make your membership work for you, see online at www.haaonline.org/psc or contact Susan Hinkley at shinkley@haaonline.org.

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The Houston Apartment Association’s Product Service Council is here to help supplier partners navigate the association. Learn how you can get the most out of your membership.

his month, PSC members Angie Aversa with The Liberty Group, Juana Estrada with First Onsite and Giovanna Gone with Century A/C share their experience in obtaining Certified Apartment Supervisor (CAS) credential, why it’s important and how it has helped their careers When did you obtain your CAS credential? Angie Aversa: In 2015. Juana Estrada: I obtained my CAS in 2018. Giovanna Gone: I earned my CAS credential on January 22, 2021. It was, without a doubt, one of the best days of my multifamily career.

Tell us what the process is like. What was your experience taking the classes and studying for the exam? Angie: I decided to enroll in the “fast-track” program so that I could take the five required modules in a relatively short period of time. The classes were engaging, and I formed lasting relationships with both vendors as well as management partners as four of the modules were taken with those enrolled to get their Certified Apartment Manager (CAM) credential. Although I was nervous about the test, I found it to be rather easy as everything was fresh in my mind from taking the classes via fast track. Hint: Memorize the financial formulas! Juana: The process was very easy. It was like going back to college and studying for exams. It was very insightful on what managers, investors and owners look at on a day-to-day basis. Building relationships in there with people who were also working toward the same goal was part of the process. It was encouraging and supportive that everyone in there wanted you to pass, so we pushed one another and even got together to study terms, vocabulary and financials. Giovanna: The process was made easy by the Houston Apartment Association because of the amazing instructor we had. Bill Nye made class so interesting, engaging and fun. It was a great mix between property management friends and suppliers. Studying for the exam was possibly the hardest part, because I was so nervous about passing and there were so many different terms and equations to memorize. All of my hard work paid off after the screen said, “We are pleased to inform you that you achieved a passing score on the CAS exam!”

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How has having the CAS credential helped you in your career? Angie: Earning my CAS was a valuable networking and relationship building experience. The credential is recognized and respected in our industry, and it shows that we care about our clients and understand their needs. Juana: This helped me become part of the PSC, and to get recognized more in the industry. Giovanna: I’m a firm believer that knowledge is power. Having the CAS credential has helped me in my career because it lets my dear clients know that I have their assets’ best interest at heart. How can new members get started in their journey to obtain their CAS credential? Angie: I am ever so grateful that I applied for and received an education grant from HAA to take the CAS Fast Track courses. Juana: Continue to learn more about the industry and how it helps us learn and help our management partners; sign up for the class and attend Industry events. Giovanna: If you’re a new or an existing member, I strongly encourage you to reach out to any of the amazing staff at HAA or the National Apartment Association to get started on your CAS journey. You will not regret this decision. This path will open your eyes and give you a better perspective of the property management world and how to take great care of your clients and their valuable asset(s).

Aversa

Estrada

Gone

The Houston Apartment Association offers education grants covering 50% of the total cost. As we recover from last year’s losses brought on by the COVID-19 pandemic, we are limited in funds for the Certified Apartment Supplier credential. Please don’t let that stop you from obtaining your credential. Reach out to us at education@haaonline.org for more information.

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Welcome Mat

Introducing HAA’s NEW MEMBERS

OWNERS

Ellises Property Management David Ellis 4455 Camp Bowie Blvd. #176 Fort Worth, TX 76107 817-320-1834 Ellises Property Management - Properties

Grand Oaks Residential Sharon Harrelson 1301 Nevell Road Cleveland, TX 77327 336-340-6394 Grand Oaks Residential Green Acres Holding Company Efrem Sewell 5909 W. Loop S. #550 Bellaire, TX 77401 713-208-5258 Sungregor Apartments Referred by Brian Watson Jupiter Property Management Austin Anello 5535 Memorial Drive #F1123 Houston, TX 77007 832-443-7673

Fetch Brooks Radla 3426 Yale St. Houston, TX 77018 512-897-2397 Package Management Referred by Valerie Radla, CAS

MCG Residential Services Sam Kirzner 699 Cross St. Ste 206B Lakewood, NJ 08701 347-486-2177 Element Apartments I wasn’t expecting it at all. I was surprised that they nominated me!” he said, laughing. “ I’ve been with this business for 15 years. I never expect anything. For me, if I get my job done or get it right, I’m satisfied with that. I don’t need recognition. As long as my resident and my management and the owner are happy, I’m happy. It was a good experience, though, feeling that way. I didn’t know that someone was watching!”

Airemaster of Houston Steve Darrah 10 Green Field Place Spring, TX 77380 281-614-9358 Odor Control, Scent Marketing Referred by Richard Wall, CAM, CAPS Cobu Wendy Radtke 54 Sandwell Place Spring, TX 77389 225-788-5575 Community Services, Mobile Applications & Software Referred by Anita Alberger Diamond Waste Services Cade Edwards 2103 Swift Blvd. Houston, TX 77030 281-782-5828 Trash Service - Valet, Waste Reduction/ Disposal/Recycling

EnergyBidz Robert Porras 4223 Hannover Way Round Rock, TX 78681 713-416-2677 Energy Conservation/Management, Utility Consultants Referred by Liz Macias

Kirpa Management Kiran Kaur 10206 Fairbanks N. Houston Road Houston, TX 77064 281-970-1730 x2 Live Oak Bend Apartments Meridian Apartments Oakridge Apartments Streamside Place Apartments

SUPPLIERS

Flex Nick Seeley 246 5th Ave. Ste. 412 New York, NY 10001 719-648-9823 Amenities, Payment Services - Electronic Rent

Hard Works Valet Trash & Recycling Samaan Tunda 12645 Memorial Dr. #F1 #505 Houston, TX 77024 713-824-3644 Trash Service - Valet, Waste Reduction/ Disposal/Recycling

Hygienitech Solutions Ed Kampf 3131 W. Loop S. #417 Houston, TX 77027 713-298-1449 Odor Control, Mold Remediation Referred by Donna Farthing

Residential Waste Service Kimberly Scott P.O. Box 381295 Birmingham, AL 35238 888-644-4797 Janitorial Services, Trash Service - Valet REVS (Refuel Electric Vehicle Solutions) Mike 3753 Nottingham Houston, TX 77005 713-927-1693 Electric Vehicle-charging docks Rock Fin Countertops Raj Settipalli 5830 Gessner Road Houston, TX 77041-6004 713-460-4441 Counter Tops, Stone - Granite/Natural SCA Sign Group Stephanie Artzner 15825 TX-249 Ste. 16 Houston, TX 77086 832-446-3479 Advertising - Outdoor, Signs Southern Shingles Scott Barnhill 22411 I-45 Spring, TX 77389 832-616-4100 Roofing Materials, Roofing Consultants Texas Crime Division Alonso Auces 11261 Richmond Ave. Ste. G111 Houston, TX 77082 832-650-0900 Security Guard/Patrol Service, Investigators Referred by Ruha Vohra, NALP, CAM Tpo Pros Roofing & Restoration Scott Glaser 225 S. Heights Blvd. Ste. 1405 Houston, TX 77007 800-674-3634 Roofing Contractors, Roofing Consultants, Roof Cleaning Referred by Amanda Kelly Westco Grounds Maintenance Larry Gattis 12350 Taylor Road Houston, TX 77041 713-466-1822 Irrigation Systems & Equipment, Landscape Contractors, Lawn Maintenance

ALL SUPPLIER MEMBERS are listed online at haabuyersguide.com, searchable by product/service category or company name. 60

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President, continued from Page 7 ego needs away from themselves and into the larger goal of building a great company. It’s not that Level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious – but their ambition is first and foremost for the institution, not themselves.” The minute you stop making leadership about yourself and more about the people in your organization, then you will begin to reach your full potential. John: Describe either a challenge, accomplishment or decision that catapulted you to your success? Mack: For me, it was working in every position within Greystar. I started in leasing/assistant manager, then community manager, an analyst, a regional property manager, a vice president and onward. Raising my hand and then committing to that new role like my life depended on it was what kept leading me to the next role. That, and I worked for a company (Greystar) that recognizes hard work and commitment to excellence. John: Do you have a morning routine or habit that you feel makes you a more productive person? Mack: It sounds neurotic, but I actually eat the same healthy breakfast every single morning, yogurt and granola. It makes me feel good as I start the day. If I ever can’t eat it, then I truly don’t feel like I’m starting the day as my best. Needless to say, my fridge is always full of yogurt.

September 22

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The Go-Getters HAA’s MEMBERSHIP RECRUITERS

CHEERS TO MEMBERSHIP! Join the Go-Getters so everyone knows your name and they’ll be glad you came!

2021 Chairs:

Join our Quarterly Meetings! Be the top recruiter for each quarter and win $500 cash! Plus, for each new member you recruit, you’ll earn a chance to win gift cards ranging from $25 to $250! Melissa Friend Greystar

JOIN A TEAM and build relationships with like-minded members. Get involved with Go-Getters and make lasting industry connections.

Doug Oehl, CAS Flooring Warehouse

Honorary Life Members

Claude Arnold Kenn Brown Tina Cavaco Terri Clifton Kevin Fenn Diane Gilbert Anita Harrison Dwayne Henson Mike Koch Merry Mount

Monette Reynolds Sherry Stevenson Kirk Tate Suan Tinsley Sonny Unverzagt Del Walmsley Nancé Wells H.P. Paul Young Jeanne Marie Zublin Dicks

The next meeting is July 22! Location to be announced. Visit www.haaonline.org for more information.

THE GO-GETTERS ARE THE BACKBONE of the Houston Apartment Association. By recruiting new members, the Go-Getter Club helps both new management and supplier companies and the association grow for the future. To join the club and get going on recruitment, see online at www.haaonline.org or contact Amanda and Kaylon in the Membership Department at members@haaonline.org. 62

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Go-Getters Happy Hour Wednesday, April 21 at McIntyre’s Sponsored by 1 Outdoor Elements and 2 RentPath The top Recruiter was Ruha Vohra, Veritas Equity Management with four new members. The top team was Team Diane with six new members

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The Ambassador ONE Society HAA’s WELCOMING COMMITTEE

HOT BUGS, COLD BREWS

The Ambassadors host HAA Board members and management professionals for a Hans’ Crawfish Boil. Mark your calendars and join us! Meetings are held on the first Wednesday of each month at Kirby Ice House, Memorial City, 1015 Gessner Road: Dates as of press time. Please check the calendar at www.haaonline.org for updates: July 1 • August 5 • September 2 October 7 • November 4

THE AMBASSADOR ONE SOCIETY is an organized network exchange that helps supplier partners build their business contacts within HAA. It’s the perfect way for new suppliers to get started with the association. Group members share leads, make introductions and support HAA and its members. For details, attend an orientation and one of the meetings listed here, or contact Amanda in the Membership Department at 713-595-0316, or email asherbondy@haaonline.org. 66

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Need Social Distancing Meeting Space? The Houston Apartment Foundation Dinerstein Reed Prokop Education Center is here for you.

The HAF Education Center is located at the HAA/HAF facility, 4810 Westway Park Blvd. in the Westway Park Development at Clay Road and Sam Houston Parkway. This premier location with easy access for members and their employees offers several options to choose from. • Large Conference Room • Open Event/Training Space • Presentation/Projection Equipment Available

Keep the education center in mind when your company is in need of a facility for your next meeting or employee training. The center is available for rental to members and is the perfect venue for budget meetings, planning sessions and more. For more information, contact Susan at 713-595-0300, e-mail shinkley@haaonline.org or visit us online at www.haaonline.org.

For more information, visit us online at www.haaonline.org

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Portfolio Changes The following owner/management companies have added the listed properties to their portfolios: • Arcturus Income Property Management: Texas Angleton Ranch, 176 units at 1400 E. Henderson St., Angleton. • Asset Living: Edison Lofts, 126 units at 7215 Fuqua Drive and North Park, 192 units at 90 Northpoint Dr. • Avenue: Elder Street Artist Lofts, 34 units at 1101 Edler St. No. 306; 5609 Leeland, 8 units at 5609 Leeland; Gale Winds Apartments, 18 units at 5005 Irvington Blvd.; and Eastwood Villa Apartments, 26 units at 4320 Leeland St. • Blazer Real Estate Services: Hartwood at Briarwest, 120 units at 12976 Westheimer Road. • Blue Magma Residential: The Park at San Vicente, 240 units at 14810 Crosswinds Drive. • Boyd Legacy: Park @ Woodland Trails, 48 units at 7058 W. Gulf Bank Road. • BSR REIT: Adley at Gleannloch, 260 units at 9123 Crescent Clover Drive, Spring. • Capstone Real Estate Services: The Cottage Green, 197 units at 2490 S. Loop 336 W., Conroe. • CORE Realty Holdings Management: CUE Luxury Apartments, 251 units at 20211 Longenbaugh Road, Cypress. • Disrupt Management: Ventana Gardens Apartments, 84 units at 5135 North Freeway; Meadow Lea Apartments, 46 units at 8217 Fulton St.; Grahamcrest Manor Apartments, 50 units at 7615 Grahamcrest Drive #19; Porterwood Apartments, 136 units at 24270 Farm-to-Market 1314 Road,

Porter; and Porterwood Apartments, 136 units at 24270 Farm-to-Market 1314 Road, Porter. • Grand Oaks Residential: Grand Oaks Residential, 70 units at 1301 Nevell St., Cleveland. • Greystar: Ascend at Lakeview, 298 yhnits at 18313 Farm-to-Market 1093, Richmond and Art House at Sawyer Yards, 334 units at 2121 Edwards St. • Haven Residential - 29th Street Capital: Fuse at Park Row, 318 units at 14220 Park Row Drive. • Kirpa Management: Streamside Place Apartments, 201 units at 5335 W. Gulf Bank Road; Oakridge Apartments, 228 units at 633 Rushcreek Drive; Meridian Apartments, 152 units at 10200 Bammel North Houston Road; and Live Oak Bend Apartments, 252 units at 1351 Greens Parkway. • KKR Realty: KKR Realty - Properties, 4 units at 14402 W. Belfort St., Sugar Land. • Lincoln Property Company: Avenue Grove, 270 units at 3815 Eastside St. • MCG Residential Services: Element Apartments, 286 units at 400 Greens Road. • NSP Management Group: Commerce Park, 354 units at 15330 Ella Blvd. and Fairfield Cove Apartments, 135 units at 15615 Blue Ash Drive. • Oak Leaf Management: Court at Oak Forest (Delta One), 68 units at 4102 Mangum Road. • Roscoe Properties: Broadstone 25 One 20, 339 units at 2 5120 Panther Bend Court, Spring and Timbergrove Station, 342 units at 2717 Minimax Drive. • Shoregate Management: Galleria Parc, 223 units at 3363 McCue Road. • Venterra Realty: Elation at Grandway West, 324 units at 23010 Franz Road, Katy.

Do you need to find a product or service for your property on the go? The Buyer’s Guide is online! Simply search for a member by name or category to find the most up-to-date HAA supplier member listings. You can contact the companies directly or use our “Request for Information” tool. It's quick and easy!

www.haabuyersguide.com

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• Western Wealth Communities: Harbour Point, 210 units at 16460 Highway 3, Webster. and Clear Lake Apartment Homes, 244 units at 300 Cyberonics Blvd. • Wood Residential Services: Balcara at Balmoral, 163 units at 15866 Mountlong Drive, Humble. • WRH Realty Services: Harbor Cove, 300 units at 4630 Magnolia Cove Drive, Kingwood.

In the News

Berglund

Nye

Caldwell

Liz Berglund joins the Hy.ly team as their regional sales manager for Texas. Bill Nye joins Rockstar Capital Management as the vice president of operations. Dixie Caldwell, CAS, joins Apartments.com as a sales associate. Madera Residential purchases Alexan Southside. The Houston Chroncile reported on this on April 23 with the headline “Lubbock apartment investor ‘bullish on Houston.’”

Clay Hicks, the Texas Apartment Association president-elect and last year’s Houston Apartment Association’s president, receives the TAA Frank P. Finch Presidential Award. He is the third volunteer to receive the award twice, winning it for the first time in 2018. For more news from the TAA One Conference & Expo, see Pages 52-53.

Have something to report from your company or for yourself? Email ABODE your news and updates at comm@haaonline.org. www.haaonline.org

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Vendor data from bot providers suggest that bots handle leads more consistently, and set appointments more reliably than humans do, without a break and at low cost. It’s hard to say no, even if the first generation or two of these products are still sorting through the difficulties of handling interpretive idioms.

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“We can back-up our bot 24-7 with millions of bits of info,” Holden said. “Like Alexa, she hears and she understands based on all of the conversations going on around her. From that, she can respond in a conversational way. The customer’s interactive experience sounds the same whether it’s human or machine. If Lisa doesn’t understand, others can become involved and not make it sound purely like an automated ‘yes/no’ answer type of conversation.” Concierge is a bot that lives off-site, and that is delivered through SMS or email. “It’s a core part of our CRM; part of our eco system,” Katler said. He said Anyone Home decided to design knowing that everyone has screamed “Representative” into the phone during a customer service call with a bot. Concierge is a decision-tree product. Anyone Home takes one million inquiries a month and then programs that information into its bot and also includes a human available 24-7 to respond, achieving a 100% customer success rate. Anyone Home is studying NLP to see where it might fail, such as when addressing sensitive topics such as fair housing, liability, security questions. Concierge focuses on your customer’s customer. “During the pandemic, apartment communities were asking themselves: Do I do virtual tours or self-guided tours?” Katler said. “The answer is: Both. Because if you do, your conversation rate improves by 38%.” Concierge doesn’t replace a human. “For one NMHC 50 client of ours, after it converted to a 24/7 human and a 24/7 bot process, their tour-to-lease rate increased by 16%,” Katler said. “Give consumers choices. Don’t do it one way because you can’t provide the other.” Nieves said MeetElise uses NLP to drive human-like interactions. It allows customers to engage with what they will think is a real human being. NLP understands complex questions and gives complex answers. Shmuckler said Diffe.rent’s AI is designed to work with the leasing staff to “wow” their

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prospective residents. Its AI produces insights based on thousands of interactions each day. Its bot mimics a repetitive human task and uses NLP to drive the conversation forward. It relies on sentiment analysis to determine when to hand off the prospect to a leasing professional Thompson said Respage is designed for a leasing team that is overworked. “When you have five leasing agents who are handling 1,000 leads per month, that can be overwhelming,” she said. She said AI gives leasing teams the chance to follow-up with prospects in a timely manner. It also enables them to work on things at the property level such as social media, reputation management and resident retention instead of through a centralized office. Its NLP integrates with its property management system to answer questions, or to hand-off the prospect to a leasing agent. BetterBot four years ago built an NLP lexicon for multifamily, but found it had a 30% failure rate, one consistent with the success that premier technology such as IBM’s Watson experience. “We use natural language, but we don’t process it,” Turnbull said. “We use intent, which made a big difference for us. It took us to a 0% failure rate because the consumer wasn’t confused, and our results improved five times. We saw more completions and appointments. We are seeing many moving away from NLP to guided conversations.” Yount at RENTCafe said guided conversations are a part of RENTCafeIQ, which works from a hybrid model that also uses NLP to allow a freeform chat and hand-off (to a community leasing agent or call center) if necessary. Irreplaceable Humans Yount said bots will never fully replace the leasing staff. “Leasing professionals are there to shake the customers’ hands, get people moved into their apartments – you can’t replace that. You can lower headcount with good bots, but never replace humans totally.” Gorman said ACE helps answer the

phones, “because leasing professionals are sometimes too busy to do so because they are focused on resident experience. A renewed lease is more valuable than finding a new lease.” Lisa won’t replace staff, Holden said. However, hiring and maintaining staff is a challenge, she added. “Younger workers want to come to a job that doesn’t ask them to do things such as simply answer phones or give quick responses to emails. [Our industry] is hiring them to close deals and to have that social aspect of the job, and engage the community.” Nieves said, “Automation will impact how we will staff our leasing offices in the future. It’s how we’re moving. It’s more efficient. The role of AI is to work in tandem with leasing professionals. We hire them to ‘wow’ our customers because they are the ‘customerservice’ people.” Turnbull said that bots won’t replace office head count. “There’s a 34% attrition rate among leasing agents due to them being overloaded,” he said. “BetterBot is designed to take the menial tasks off of their plates. Let them be humans, and be empathetic to customers. It’s working because our clients are saving 80 hours per property and signing four leases per month.” Turnbull sees solving for multi-channel attribution as the next frontier for AI. “We are building a 3D, or even 4D model around data,” he said. “Some sources are great at sending traffic, but why is that traffic not converting? Don’t just look at data coming in when you can see it through its levels of engagement: Did they become a lead, or a conversation, or a lease. We are building the tools to help measure multichannel attribution.” Paul Bergeron is a freelance reporter who covers the apartment industry. You can reach him at pbergeron333@gmail.com or 703-434-0280. www.haaonline.org

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Unmute Yourself

Join ABODE and turn on your message! Zoom straight to your customers with ABODE magazine, the multifamily industry’s resource for what’s happening in the Houston-area apartment market. Reach your potential customers even when you can’t meet them in person. We are there, online and in their mailbox. Every month, our members-only publication highlights industry news and trends. ABODE is your resource for industry-specific legal and legislative news as well. Share your promotions and new hires in our “In The News” column, or the latest development in your area of expertise by writing an article. And get your name out there by advertising. Contact Amanda at asherbondy@haaonline.org to advertise and contact the Communications Department at comm@haaonline.org for details on editorial.

ABODE is there even when you can’t be! Look for ABODE in the mail the first week of each month, or read online at issuu.com/haa_abode.

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Index of Advertisers By CATEGORY

A/C Supplies

Landscape Contractors

Century A/C Supply . . . . . . . . . . . . . . . . . . . . . . . . . .49 281-530-2859 . . . . . . . . . . . . . . . . . .www.centuryac.com

Outdoor Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . .61 713-955-0990 . . . . . .www.outdoorelementstx.com Texscape Services . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 281-846-3779 . . . . . . . . . .www.texscapeservices.com

Carpet Installation Dixie Carpet Installations . . . . . . . . . . . . . . . . . . . .43 281-261-6334 . . . . . . . . . . . . . . . . .www.dixiecarpet.com

Laundry Equipment & Supplies

Texas Southwest Floors . . . . . . . . . . . . . . . . . . . . . .14 800-719-4321 . . . . . . . . . . . . . .www.texasswfloors.com

Scott Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 713-686-7268 . . . . . . . . .www.scott-equipment.com

HAA reserves the right to reject any advertising if its content is inappropriate or inconsistent with HAA’s standards for publication or HAA’s business interests, in HAA’s sole opinion.

WASH Multifamily Laundry Systems . . . . . . . .34 281-967-9507 . . . . . . . . . . . . . .www.washlaundry.com

Collection Agencies Alexander-Rose Associates Inc. . . . . . . . . . . . . . .71 713-644-4441 . . . . . . . . . . .www.alexanderrose-inc.com

Locks & Locksmiths CKI Wholesale Lock Supply . . . . . . . . . . . . . . . . . .61 713-462-0704 . . . . . . . . . . . . . . . . . . . . .www.ckilock.com

Electric Contractors Affordable Quality Electric . . . . . . . . . . . . . . . . . . .13 713-695-5992 . . . . . . . . . . . . . . . . .www.acuityelectric.com

Personnel Agency

Brandt Electrical A/C & Heating Services . . . . .19 281-693-3383 . . . . . . . . . . .www.brandtelectrical.com

ASAP Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71 972-432-6667 . . . . . . . . . . . . . . . . . . . . .www.asapdo.com

Foundation Repair

Plumbing Contractors

Church Foundation Repair . . . . . . . . . . . . . . . . . . . .2 713-468-8400 . . .www.churchfoundationrepair.com

General Contractors

AAA Plumbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 713-462-4753 . . . . . . . . . . . . . . . . . .www.aaaplumbers.com

Resident Screening Service

Camp Construction Services . . . . . . . .Back Cover 713-413-2267 . . . . . . . .www.campconstruction.com

SafeRent Solutions . . . . . . . . . .Inside Front Cover 888-297-8821 . . . . . . . . . . . . . . . . . . .www.corelogic.com

Cotton Commercial USA Inc. . . . . . . . . . . . . . . . . .10 877-511-2962 . . . . . . . . . . . . . . . . . . . .www.cottongds.com Crestmark Construction Services . . . . . . . . . . . . .1 713-426-6161 . . . . . . . . . . .www.crestmarkservices.com FSI Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 832-767-1115 . . . . . . . . . . . . .www.fsiconstruction.com Gemstar Construction & Development . . . . . .29 281-821-1195 . . . . . .www.gemstarconstruction.com Guardian Construction . . . . . . . . . . . . . . . . . . . . . . .33 832-672-4196 . . . . . . . . . . . .www.guardianconst.com MultiFamily Services . . . . . . . . . . . . . . . . . . . . . . . . .70 713-266-9100 RENCON . . . . . . . . . . . . . . . . . . . . . .Inside Back Cover 713-666-3636 . . . . . . . . . . . . . . . . . . . . . .www.rencon.com

Glass – Plate, Window, Etc. Ameristar Screen and Glass . . . . . . . . . . . . . . . . . .27 713-683-6767 . . . . . . . . . . . . .www.ameristarglass.com

Resurfacing Perfect Surface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 713-952-0202 . . . . . . . .www.perfectsurfaceinc.com

Screens

TARGET QUALIFIED LEADS With HAA’s job board, you’ll discover a professional community that’s committed to helping you find the right candidate or your next job opportunity in the greater Houston and surrounding areas.

www.haaonline.org jobs@haaonline.org 713-595-0300

Ameristar Screen and Glass . . . . . . . . . . . . . . . . . .71 713-683-6767 . . . . . . . . . . . . .www.ameristarglass.com

Security Control Equipment/Systems SentriForce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35 888-671-2202 . . . . . . . . . . . . . . . . .www.sentriforce.com

Swimming Pool Service Poolsure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 800-858-POOL . . . . . . . . . . . . . . . . .www.poolsure.com

HAA Products & Services

Insurance Harco Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61 713-681-2500 . . . . . . . . . . . . . . . . . . .www.harco-ins.com

Rental Credit Reporting . . . . . . . . . . . . . . . . . . . . . .55 713-595-0300 . . . . . . . . . . . . . . .www.haaonline.org/rcr

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Marketline pg 75.qxp_Layout 1 5/17/21 3:57 PM Page 1

MarketLine By BRUCE MCCLENNY, President, ApartmentData.com

• • • • • • • • • • • • • • • • • • • 1050 – • • • • •

HOUSTON Snapshot 89.6% $1,073/mo. $1.21/sq.ft./mo. 886 sq.ft.

Recently Opened (12 months): 80 communities 22,368 units

1000 –

– 90.0

975 – – 89.0

– 88.0

Under Construction: 64 communities 16,954 units Apr 21

Mar 21

Jan 21

Feb 21

Dec 20

Nov 20

Oct 20

Sep 20

Aug 20

Jul 20

Jun 20

Apr 20

May 20

Mar 20

Feb 20

Jan 20

Nov 19

Dec 19

Oct 19

Sep 19

Jul 19

Aug 19

Jun 19

May 19

– 87.0

Proposed Construction: 97 communities 28,059 units

History of Effective Rental Rate & Occupancy for All Units

Hottest Submarkets Over the Past Three Months

Concessions

Annualized Rank 1 2 3 4 5

Occupancy (%)

Operating Supply: 2,924 communities 689,718 units

Rental Rate (¢/sq.ft./mo.)

Past 12 Months: 0.6% rental rate growth 17,962 units absorbed

1025 –

•

Occupancy: Price: Rental Rate: Size:

Submarket Heights/Washington Ave Katy/Cinco Ranch/Waterside Woodlands/Conroe South Montrose/Museum/Midtown Lake Houston/Kingwood

% of Market Absorbed 23.8% 18.5% 18.4% 20.6% 14.9%

Rental Rate Growth % 4.9% 3.5% 3.0% 2.5% 3.6%

Total Units Class w/Concessions All 307,389 A 95,559 B 118,070 C 81,369 D 12,391

% of Total Units 45% 58% 43% 41% 24%

Average Special -3.2% -5.2% -2.3% -2.0% -1.7%

Citywide Effect -6.8% -8.6% -5.5% -4.9% -6.9%

One Month Free = -8.33%

THE FIRST TABLE ABOVE GIVES A SNAPSHOT of the current market conditions. The graph displays the overall occupancy and effective rental rates over the past 24 months. These statistics are derived from a continuous survey of all apartment communities in the Houston region. The effective rental rates are the calculated net of concessions and utility adjustments. The second table lists the five hottest submarkets in the Greater Houston area. There are a total of 42 submarkets, and the ranking is based on the best combination of rental rate growth and absorption over the past three months. The third table distributes and analyzes concessions (specials) by classification. Concessions generally are represented by three types of specials: move-in, months free or floor plans. The effect of these specials is captured and prorated over a lease term to arrive at a percentage reduction in market or street rents.

TEXAS

Dallas/Ft. Worth

San Antonio

Austin

Occupancy: Price: Rental Rate: Size:

91.3% $1,216/mo. $1.39/sq.ft./mo. 878 sq.ft.

90.4% $1,018/mo. $1.19/sq.ft./mo. 856 sq.ft.

90.0% $1,335/mo. $1.5.3¢/sq.ft./mo. 875 sq.ft.

Past 12 Months: 3.1 % rental rate growth 25,232 units absorbed

Past 12 Months: 2.8% rental rate growth 8,461 units absorbed

Past 12 Months: 1.2% rental rate growth 10,171 units absorbed

Operating Supply: 3,275 communities 781,460 units

Operating Supply: 962 communities 206,694 units

Operating Supply: 1,076 communities 254,628 units

www.haaonline.org

ApartmentData.com has been providing apartment data and marketing products since 1986. ApartmentData.com provides real-time access for property specific information, market surveys and historic submarket data for more than 3.5 million apartment units in Texas, Florida, Georgia, Arizona, North Carolina and Tennessee. For more information, contact Bruce McClenny at 800-595-8730. © 2021 ApartmentData.com June 2021

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MARKET REPORT • NEW CONSTRUCTION • MARKET TRENDS

Houston Apartment Association 4810 Westway Park Blvd. Houston, Texas 77041

ABODE THE HOUSTON APARTMENT ASSOCIATION MAGAZINE

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June 2021

ABODE • JUNE 2021 • VOLUME 44, ISSUE 6

It’s a

new

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dawn It’s a new

day

And the apartment market is feeling good.

ABODE June 2021

Articles inside

It's A New Dawn

What Renters Want

LEARN FROM THE LEADERS