The Landlord Times - Metro - April by Professional Publishing, Inc

Professional Publishing, Inc www.TheLandlordTimes.com

METRO

PORTLAND & VANCOUVER

Vol. 17 Issue 4

Published 17 Years

April 2013

MONTHLY CIRCULATION TO MORE THAN 20,000 IN PORTLAND/VANCOUVER APARTMENT OWNERS, PROPERTY MANAGERS, ON-SITE & MAINTENANCE PERSONNEL Published in association with: METRO Multifamily Housing Association; Rental Housing Association of Oregon; IREM & Clark County Rental Association

Obama Administration Awards Almost $22.3 Million To Renew Funding To 118 Oregon Projects Helping Homeless Persons & Families Find “Stable Housing” Instead of “Living on The Streets” U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan recently awarded $22,260,051to renew support for 118 local homeless housing and service programs in Oregon. HUD will award additional grant funding to support hundreds of other local programs, including new projects. View a complete list of Oregon projects awarded funds today at http://portal.hud.gov/hudportal/HUD?src=/ program_offices/comm_planning/ homeless/budget/2012 Provided through HUD’s Continuum of Care programs, the funding announced today will ensure these HUD-assisted local homeless assistance programs remain operating in the coming year. Later this year, HUD’s Continuum grants are awarded competitively to local proj-

ects to meet the needs of their homeless clients. The grants fund a wide variety of programs from street outreach and assessment programs to transitional and permanent housing for homeless persons and families. Over the last four years, HUD has provided $80.3 million in Continuum of Care funds to Oregon homeless providers. HUD funds are a critical part of the Obama Administration’s strategic plan to prevent and end homelessness. “The evidence is clear that every dollar we spend on those programs that help find a stable home for our homeless neighbors not only saves money but quite literally saves lives,” said Donovan. “We know these programs work and we know these grants can mean the difference

Boston and San Francisco, two recent highfliers, have slowed

Professional Publishing, Inc PO Box 30327 Portland, OR 972943327

from February 2012 and 71 bps from February 2011. “A pattern has emerged this year, as effective rent growth for Class A properties has really slowed down, Class B rates have remained relatively steady, but Class C rates have continued to increase,” said Ron Johnsey, president for Axiometrics. “Rents had been pushed so much at the upper end of the market it was inevitable we would begin to see a slow-

Current Resident or

PRSRT STD US Postage PAID Portland, OR Permit #5460

The Landlord Times recently caught up with apartment owner, broker and real estate entrepreneur Darrel Dickson about multifamily industry trends, the economy and real estate investment and management best practices. The Landlord Times: What about the industry has changed most since you started your career? Darrel Dickson: When I started in the business in 1987 interest rates were substantially higher than what they are today. Right now interest rates on 30 year amortization on a Market rate deal are about four and a half percent fixed for ten years. When I got started in the business it was in the 7-8% range for a ten year fixed rate loan. Therefore, if you can Continued on page 7 Page 2

Continued on page 13

Axiometrics Reports Slow, Steady Growth for Apartment Market in 2013 After Multiple Years of Above Average Gains Axiometrics Inc., the leading provider of apartment data and market research, reports that effective rent growth remained steady during February, at a rate of 3.53%, but that the pace of rent growth has been slowing in recent months. February’s effective rent growth rate was the lowest since August 2010. Occupancy remained strong nationally with an average rate of 94.13% in February. This rate is up 35 basis points (bps)

6 Questions with Darrel Dickson

down in growth for Class A properties, but we may also be seeing some impact from new properties coming online in certain markets. As new deliveries increase later this year and next, the trend could become even more pronounced.” Effective Rent Growth and Occupancy Nationally, annual effective rent growth declined from 3.62% in January to 3.53% in February; the annual growth rate was 3.96% a year ago. Axiometrics reports that the growth rate has slowed in nine of the last 10 months as many Metropolitan Statistical Areas (MSAs) are moderating from very strong rent growth the previous three years. Peak annual

Continued on page 18

PRESIDENT'S MESSAGE Page 6

PRESIDENT'S MESSAGE Page 10 Chapter 29 Institute of Real Estate Management

THE ROLE OF WATER IN ECONOMIC GROWTH AND SUCCESSFUL PROPERTY.. Page 14

Clark County Rental Association

PRESIDENT'S MESSAGE

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The Landlord Times - Metro • April 2013

MULTIFAMILY NW President • Paul Hoevet Past President • Jeff Denson Vice President • Pam McKenna Secretary • Kirsten Bailey Treasurer • Chris Hermanski

PAUL HOEVET MMHA President

Hello Everyone. March 10th through the 13th I had the honor and privilege of traveling with your Executive Director, Deborah Imse, to Washington D.C. and representing Multifamily NW at the National Apartment Association’s Capitol Conference. While in D.C., we attended various committee meetings and seminars. In the Membership Meeting, we were able to witness Multifamily NW’s application for membership to the NAA be ratified. We then were able to watch the Board approve our Charter at the Board Meeting on March 12th. The NAA and all of their affiliates are excited to have us back and participating in their organization. On Wednesday, we were able to see just how influential the NAA has become in our nation’s capitol. Deborah and I were given a schedule of meetings with all of Oregon’s Congressional and Senate offices. We were able to speak with them regarding issues that have a direct impact on the Apartment/Rental Housing Industry. Topics that were discussed included: - Section 8 - Low Income Tax Credit

16083 SW Upper Boones Ferry Road, Suite 105, Tigard, OR 97224 503-213-1281, 503-213-1288 Fax www.multifamilynw.org

President's Message - Fannie Mae and Freddie Mac Reform - Immigration Reform All of these issues do and will impact each of our businesses in one way or another. We can’t sit on the sidelines and hope that someone else will run with the ball. On the national level, Multifamily NW’s message was received well by all of the offices that we visited. Our law makers understand that we are an organization that represents 150,000 apartment homes and single family rentals, and that we are promoting quality rental housing to all members. I would like to think that the time Deborah and I were able to spend in our law maker’s offices will benefit all of us. Our elected officials now have a source for industry information back in their home State of Oregon. I suppose that by Multifamily NW participating in the Capitol Conference we were able to show our Representatives and Senators that we care. We were able to convey that we are part of a national organization that represents over 6.7 million units and that our voices need to be heard. Now that Deborah and I have returned to Oregon, I would like to see

Multifamily NW continue to grow our grassroots efforts in Salem and other local municipalities. The above issues do and will impact each of our member businesses in one way or another, and there are many local issues that need our attention as well. We can’t afford to sit on the sidelines, so Multifamily NW is taking the lead. Still, if our organization is to be ef-

fective with our advocacy efforts, we need your help. The more involved you are in your association, the better it will be able to represent your business interests. For more information on how you can help make a difference, please contact Kristen Davies @ 503-213-1281 or visit our website at www.multifamilynw.org.

Multifamily NW 2013 Events: MARK YOUR CALENDAR! April 12, 2013 12:00 PM - 1:00 PM It's the Law Lunchtime Series: Domestic Violence: Making Sense in Challenging Situations

April 23, 2013 8:00 AM - 5:00 PM Certified Pool Operator (CPO) Training 4/23 & 4/24 - Portland, OR

April 15, 2013 9:00 AM - 1:00 PM ELEVATE: Forms and Notices - Portland

April 24, 2013 9:00 AM - 1:00 PM ELEVATE: Closing/Overcoming Objections - Portland

April 16, 2013 12:00 PM - 2:00 PM MWV Class: First Appearances (Salem, OR) April 17, 2013 7:30 AM - 9:00 AM Spring 2013 Apartment Report Breakfast April 22, 2013 9:00 AM - 2:00 PM ELEVATE: New Hire Class - Portland, OR

April 25, 2013 9:00 AM - 1:00 PM ELEVATE: Tax Credit - Portland, OR (2-day class: 4/25 &4/26) April 30, 2013 8:00 AM - 12:00 PM ELEVATE: Unit Inspection and Turnover Effectiveness - Portland

visit www.multifamilynw.org for more dates

BED BUGGED?

Call Bugaboo Pest 503-289-0576 www.bugaboopest.com The Landlord Times - Metro • April 2013

DZ &

What Were You Thinking Moments!

DANA BROWN AND ZACH HOWELL

M O L D … … W h a t a re y o u r thoughts on Mold? It’s just MOLD, clean it up….. Maybe use bleach, that should be enough, right? Have you heard this, or heard this statement? This is defiantly one of those “What were you thinking moments”

By Dana Brown and Zach Howell Suzy Leasing: Dana, I had a resident that phoned the office and complained that there was mold developing in their apartment. I instructed them to clean the area with bleach. I mean it is their apartment, so they are responsible. Right?

D: Suzy, although the bleach and clean up is a typical suggestion, mold is very serious and must be addressed immediately. Of course, I am sure you plan to follow up with that resident to ensure that the problem has been taken care of. Swift action can eliminate future mold or health issues, and not to mention avoid damages to the property. SL: Is mold really that serious? I mean my maintenance tech’s deal with it all the time. D: Suzy, I am glad that you are reaching out to help you understand how to minimize a potentially hazardous situation. It is important that everyone that works in property management understand fully the ramifications of mold. Here are a couple of tips to get you started. 1. Here is the EPA website that has valuable information regarding mold. http://www.epa.gov/ mold/index.html 2. Dana’s philosophy on forms and addendums, if there is a form or addendum for it, use it. $1.50 is a small price to pay if it could possibly save you thousands in court. a. The Mold & Moisture addendum explains how the tenant’s behavior directly influences mold & moisture. This could be important in the future if mold becomes present in an apartment. 3. Document, Document, Document! a. It is always a good idea to start a Mold log with the conversation that transpired between you and the resident. I don’t want to have to say. “What were you thinking” Be prepared, don’t have that moment!

Zach – What is your opinion, how should mold be addressed? Z: OK folks can we put the whole “use bleach” response to bed? There are two inherent problems with telling residents to use bleach. 1. Bleach has been thrown at mold and mildew for so many years that many of the most common types of mold have actually mutated and built up immunities to bleach. 2. If we tell our residents to use bleach and they drip it all over the carpet then we are technically liable for the damages because we told them use it. In the past the EPA recommended bleach and that has stuck, but the EPA changed its recommendation nearly 5 years ago. Also take a look at you mold and mildew addendum to be sure it doesn’t state bleach as the resolution. If it does it should be updated. There are many products on the market that are better at killing and preventing mold than bleach some of my favorites are X-14 and Zinnser Perma-Wash. Now let’s go over the best way to attack existing mold and treat it to prevent future growth. Step one: Spray a clean rag with X-14 or other mold cleaning product. Never spray the wall or surface directly it will cause spores to become airborne (very bad). Wipe the surface once with your rag, fold your rag, re-spray wipe again, fold the rag, re-spray, and so on until the surface growth is gone. Take the rag place in a garbage bag and dispose. There may be some residual stain but we will tackle that next. Step two: Use warm soapy water and a soft bristle brush and clean the surface gently. You don’t want to saturate the surface with water just clean the spores down to surface level. Wipe dry with clean rag, place in garbage bag and dispose. Step three: Once the surface is dry use a spray shellac over the area. This will seal the odor from the mold growth. Shellac is alcohol based so it will dry very fast, but have some fumes as, so ventilate the area well. Step four: Once the surface is dry, use an oil based primer like Kilz and spray the area. This will seal the stain from the growth, but may also give off odor so ventilate well. Step five: Once the surface is dry it’s ready to paint. I always recommend using paint with a mold inhibitor. This can be added while in the manufacturing phase ,or as an after market additive. In addition, I like to scent my paint, so whatever I paint smells like tropical breeze. This is the way to do it, and for your in house staff they can follow these procedures every time with a great result. Always remember to wear the correct Personal Protective Equipment such as latex gloves, N-100 particulate paper mask with Continued on page 5

The Landlord Times - Metro • April 2013

Oregon 10 Day Pet Violation M018 OR

What ...continued from page 4 filter, and eye protection. This cleaning method along with the moldicide paint will create a surface that mold does not like to stick to and cannot colonize. Industry standard states that your onsite staff can handle mold occurrences that effect 10sq/ft or less. Remember, you can measure 10sq/ft more than the standard 2’x5’ if you have 6”of mold growth on a baseboard and a few inches up the wall then your site staff could do up to 20’ of continuous wall and still stay within the 10sq/ft rule.

Dana Brown and Zach Howell have been working and training Managers and Maintenance staff in the property management industry for 20 + years. They are excited to give back and share the crazy stories that can only happen in our industry. We would love it if you would share your stories and “WHAT WERE YOU THINKING” moments with us as well as questions that you need answers to. Dana can be reached at: dana@multifamilynw.org. Zach can be reached at: zach@aminstitute.net

About the Form: This simple and underutilized form quickly addresses unauthorized pets on properties. This form actually includes two separate notices, the First Notice and the Final Notice. Upon discovery of the unauthorized pet, serve the tenant the First Notice of the Oregon 10 Day Pet Violation form. The First Notice explains that the pet must be removed in 10-14 days (depending on delivery method) or tenancy will terminate. The Final Notice is used in cases that a tenant has initially complied with the First Notice, only to discover there is another unauthorized pet. Serving the Final Notice the tenant has 10-14 days (depending on delivery method) to vacate the premises. There is no additional grace period with the Final Notice. OREGON

10 DAY PET VIOLATION DATE __________________________________________ PROPERTY NAME / NUMBER ___________________________________________________________________________________________________________________________________________________________________ ___________________________________________________________________________

___________________________________________________________________________

and all others. UNIT NUMBER ___________________________________ STREET ADDRESS ___________________________________________________________________________________________________________________________________________________________________________ CITY ___________________________________________________________________________________________________________________________________________________ STATE ___________________________________ ZIP _____________________________________________________________ Pursuant to Oregon landlord/tenant law, this notice is to inform you that you are housing a pet on the Premises in violation of the Rental Agreement. This is substantially the same violation for which you were given prior notice on __________________________________. You cannot cure this violation. Your Rental DATE Agreement will terminate on the effective date indicated below. c This notice has been served personally and is effective 11 days later at midnight (end of day) on

__________________________________

DATE

FINAL NOTICE

c If written Rental Agreement allows, this notice has been served by posting on the main entrance door of the dwelling unit and mailed first class. It is effective 11 days later at midnight (end of day) on _________________________________ or DATE

c This notice has been served by first class mail only. It is effective 14 days later at midnight (end of day) on

_________________________________

DATE

OWNER/AGENT

____________________________________________________________________________________________________________________

ADDRESS

____________________________________________________________________________________________________________________

TELEPHONE

____________________________________________________________________________________________________________________

✁

DATE __________________________________________ PROPERTY NAME / NUMBER ___________________________________________________________________________________________________________________________________________________________________ RESIDENT NAME(S) ___________________________________________________________________________

___________________________________________________________________________

and all others. UNIT NUMBER ___________________________________ STREET ADDRESS ___________________________________________________________________________________________________________________________________________________________________________ CITY ___________________________________________________________________________________________________________________________________________________ STATE ___________________________________ ZIP _____________________________________________________________ Pursuant to Oregon landlord/tenant law, this notice is to inform you that you are housing a pet on the Premises in violation of the Rental Agreement. Unless the pet is removed by the date specified, your Rental Agreement will terminate and you must vacate the Premises. In addition, you are responsible for all damages caused by the pet.

FIRST NOTICE

c This notice has been served personally and is effective 11 days later at midnight (end of day) on

__________________________________

DATE

c This notice has been served by first class mail only. It is effective 14 days later at midnight (end of day) on

www.TheLandlordTimes.com

RESIDENT NAME(S) ___________________________________________________________________________

__________________________________

DATE

OWNER/AGENT

____________________________________________________________________________________________________________________

ADDRESS

____________________________________________________________________________________________________________________

TELEPHONE

____________________________________________________________________________________________________________________

ON SITE

The Landlord Times - Metro • April 2013

RESIDENT

MAIN OFFICE (IF REQUIRED)

RENTAL HOUSING ASSOCIATION OF GREATER PORTLAND

President • Elizabeth Carpenter Past President • Phil Owen Vice President • Robin Lashbaugh Secretary • Lynne Whitney Treasurer • Jon Moon Office Manager • Alita Dougherty Member Services • Cari Pierce Bookkeeper • Pam Van Loon

10520 NE Weidler Portland, OR 97220 (503) 254-4723 • fax (503) 254-4821 info@rhagp.org http://www.rhagp.org

I am excited to announce that the RHAGP will be working closely with Jason Atkinson of Atkinson & Co., a firm specializing in raising funds and negotiating deals for fast-growing organizations. In addition to serving clients, Jason has been a State Senator in Oregon from 2000-2012. During his tenure in office, he has built and maintained a reputation as the State’s preeminent coalition-builder and strategic-leader. Jason was re-elected twice to the Senate, and, in 2004, won both the Republican and Democratic primaries. In 2008, he was a top-ranked candidate for Governor. Prior to serving in the Oregon State Senate, Jason was a State Representative, where he led conservation bills on water and fish policy as well as land-use planning. While we are still planning our strategies and determining our goals, we hope to further improve the image and perception of small and large landlords and property managers, in the industry, in our legislation, and throughout the state. Jason has already shared ideas about bringing the RHAGP members together as a stronger community with shared values, goals and relationships.

President' s Message

In the legislation: Among the many bills being discussed and proposed in the current legislation session, is House Bill 2639, otherwise known as the ‘Section 8’ bill and also as a ‘Housing Choice’ bill. Many landlords, tenants, legislators, as well as the RHAPG along with other associations involved in the industry, have been included on conversations regarding the proposed legislation. On March 6, 2013, past RHAGP President and current Government Affairs Committee Chair Phil Owen provided testimony against the bill. The primary reason for this lack of support, is that the bill, if passed, will force landlords to accept Section 8 vouchers. For example, posting vacancy ads with messages like, ‘not accepting Section 8’, will no longer be legal. You must let section 8, voucher holders apply. Landlords may continue to refuse to lease or rent based on the past conduct of a prospective renter, or any other rental criteria basis used for all other applicants. Our members believe in the importance of the Section 8 program maintaining its integrity as the voluntary program Congress intended it to be. Many of our members participate willingly in the program and have

established long term successful relationships with program participants. But for others, especially the landlords with less than ten units, the lack of property managers, lawyers and staff makes involvement with a government agency known for delays and hurdles, a very daunting idea. For these small business people, it is not about discriminating against an individual tenant, it is about entering into a contract with an agency. We offer private housing, not public

ELIZABETH CARPENTER RHAGP President

housing, and our property owners should have a right to make such a contractual decision. We will continue to keep you updated on the progress and status of this, as well as other bills, that may affect our industry and your business. Check back at www.rhagp.org often, or contact our office at info@rhagp. org to be added to our email list for real time updates. Continued on page 7

April/May 2013 APRIL 13 - LANDLORDING 101 CLASS – 9:00 AM – 4:30 PM CE=6 HRS PRESENTER: MARK PASSANNANTE MONARCH HOTEL, CLACKAMAS APRIL 17 - DINNER MEETING – STOCKPOT RESTAURANT, BEAVERTON – COST $26. SUBJECT: DISCUSSION ON HOUSE BILL 2639 (SECTION 8) PRESENTER: TINA KOTEK, SPEAKER OF THE HOUSE & CINDY ROBERT, LOBBYIST APRIL 18 - BROWN BAG LUNCH TENANT RETENTION RHAGP CONFERENCE ROOM 11:30 AM - FREE PRESENTER: GUY EDWARDS

APRIL 23 - COMMERCIAL LEANDING CLASS – 6:30 PM PRESENTER: TREVOR CALTON, COMMERCIAL LENDING GROUP STANDARD TV & APPLIANCE APRIL 24 - PREMIUM MEMBER WORK SESSION – 11:30 AM RHAGP CONFERENCE ROOM APRIL 25 - MEMBER INFO/MENTOR SESSION – 6:00 PM TO 8:00 PM RHAGP CONFERENCE ROOM – NO CHARGE MAY 9 - WHAT IS RADON? – 6:30 PM PRESENTER: STEVE TUCKER, CASCADE RADON LOCATION: RHAGP CONFERENCE ROOM

CALL RHAGP FOR MORE INFORMATION AND TO REGISTER FOR EVENTS 503 254-4723 OR WWW.RHAGP.ORG/CALENDAR-EVENT

The Landlord Times - Metro • April 2013

6 Questions ...continued from front page TLT: What do you perceive for the economy in the next year so? How will this affect the industry?

find an apartment building that is well priced you have a chance to make greater cash flow. There is a large demand to receive a stable return on investment from investors. Many are starved for cash flow. Currently, investors are getting almost nothing on bank certificates of deposits. When I started in this business interest rates on bank certificates of deposits were much higher. The returns through CDs at banks are currently close to zero. Investors can receive 5 to 10% steady cash flow in through owning apartment building. Investors will seek to deploy capital aggressively in the real estate considering the sustained low treasury rates that are available.

DD: Powerful demographic and economic trends will continue to strengthen the apartment market. The apartment market is in the fourth year of an increasing demand for rental units. The US vacancy rates was at 4.3% in 2012, which is resulting in a projected 4-5% rent growth nationally in 2013. The oldest echo boomers turn 28 years old and have created a significant number of new households. Additionally, over the next few years approximately 1.2 million to 1.6 million immigrants will arrive annually

through 2017. The unique demographics of increased Echo boomers as well as new immigrants looking for new rentals will put pressure on vacancy notwithstanding the increase in supply of rental units. Between 2005 and 2010 the number of 20 to 34-year-olds living with parents increased 600%. As the job market improves these young singles living with parents will be looking to exit from living with their mom and dad and get an apartment. TLT: The economy is clearly one of the most important topics of con-

DD: The home ownership percentages since 2006 in the United States are as follows: 2006: 68.9%, 2007: 67.8%, 2008: 67.5%, 2009: 67.2%, 2010: 66.5%, 2011: 66%, 2012: 65.5% The percentage of a home ownership has consistently dropped annually since 2006, and every 1% drop in housing ownership represents approximately 1,000,000 new renters. Multifamily properties have Continued on page 15

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President ...continued from page 6 Mentoring Sessions: Do you ever have questions about what to do about repairs? Do you have a concern about how to handle a rental situation? Join us for our monthly Mentoring Session, immediately following the New Membership Orientation the last Thursday of each month, starting at 6:30pm at the RHAGP office.

efit from the support the RHAGP offers landlords and property managers? Join us for a New Membership Orientation session last Thursday of each month at 6pm, in the RHAGP office on NE Weilder. The reward for referring a new member is a free dinner meeting for you both! Contact the office or the website for further details.

Referral – New Members: Are you a new member? Or do you know someone who would ben-

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Landlording 102 Tuesday February 12, 2013 6:30pm-8pm at RHA Office 10520 NE Weidler Portland 97220

The Landlord Times - Metro • April 2013

versation and concerns. How is the economy affecting the multifamily rental housing industry today?

Landlord Education Classes Call 503/254-4723 Insurance Class Tuesday February 26, 2013 6:30pm-8pm at Phoenix Inn 14905 Bangy Rd. Lake Oswego 97035 Taught by John Sage, Stegmann Agency

Jeffrey S. Bennett, Attorney at Law, will take you through the coming changes to the ORLTA, a retrospective of the last two years, and up-to-the-minute insights into new cases. Along the way he’ll teach you how to avoid costly legal mistakes and help you improve your landlord skills. 1 Continuing Education Credit Hour $35.00/Member, $45.00 Non-Member

Are you a target for your tenants? What happens when a tenant trips and falls or your unit has a fire or the wind blows a tree over? What does “renters insurance” do for the Landlord? John will discuss what the risks, exposures, or causes of potential loss are. $25.00/Member, $35.00 Non-Member

Commercial Lending Thursday March 21,2013 6:30pm-8pm at RHA Office 10520 NE Weidler Portland 97220 Taught by Trevor Calton, Commercial Lending Group Inc. Calculating the ROI of refinancing- Is it worth paying that prepayment penalty? The current Real Estate Lending Environment-”Where’s the Money”? Calculating property values and actual returns-”How much am I really making”? Leveraging properties to reinvest”Can I turn excess equity into cash”? $25.00/Member, $35.00 Non-Member

Inspections Tuesday March 26, 2013 6:30pm-8pm at Phoenix Inn 14905 Bangy Rd. Lake Oswego 97035 Taught by Troy Rappold, Rappold Property Management Interior inspections are crucial! It is imperative to visit your property and do a thorough walk-thru with the tenant at least once a year. This class will dicsuss the best practices to do property inspections from beginning to end. 1 Continuing Education Credit Hour $35.00/Member, $45.00 Non-Member 7

he telephone is your single most important leasing tool and it’s probably the easiest “tool” to operate at your community, but is everyone answering it when it rings? Many apartment communities are spending time and money on designing creative, effective ads and signage to make their phones ring. Yet, believe it or not, many leasing people are still choosing not to answer their telephones. Worse yet, those who are relying on answering machines and voice mail to take messages, are not always returning calls in a timely manner or even at all. I cannot tell you how many shopping reports I received last month with remarks like this: “If I had really been looking for a new home, I would have given up trying to reach someone here. The phone went unanswered as I attempted to make contact numerous times, and no one returned my call when I left a message.” For those property management companies who regularly evaluate their employees with a shopping program in order to “perfect their performance,” they are also testing to make

sure someone is simply answering the phone and returning calls! Of course having difficulty making contact with the leasing office is merely an inconvenience for the Secret Shopper, as I am only PRETENDING to need an apartment. What about REAL renters out there? What do you suppose happens to them? My guess is they are living in your neighborhood, perhaps in an apartment at the community next door because someone answered the phone on the day they were looking for a new home. The question that keeps coming up over and over again from property managers and owners is this: Q: How can I get my leasing people to convert more of their telephone traffic into actual visits and then rentals? Then there’s the question from the leasing consultants and managers who primarily work alone due to budget constraints and the size of their communities: Q: I know my supervisor is concerned about the office coverage and my ability to always answer the phone, but since I work by myself I have to take care of everything out on

the property and also run all the errands. I just can’t be in the office all day, every day. What can I do?

A: It sounds like the people behind

these questions/concerns all have the same goal in mind, but have yet to devise a plan in order to achieve their objective. While the day to day operations of caring for each community and its residents must be carried out, there will be no new residents to take care of without active leasing. The most obvious solution is as simple as forwarding your office calls to a cell phone. By having calls forwarded and being prepared to quote information about your available apartments, you can easily set appointments while you are out walking a vacant apartment or running a bank deposit. Of course you will have to always be prepared with something to write on and possibly take a message if a call comes through when you are unable to talk. However, in receiving a “live voice,” rather than a message, your callers are more likely to give you their name and number for a call back rather than leave you a voice mail. Of course if you aren’t in a position to

answer your phone, how about regularly checking for messages AND returning calls?? While you’re at it, how about also checking for e-mails from prospective renters. – Most of you can do that with your phone too!

A: To those property managers and owners who already have their managers forwarding calls to a cell phone, but are not seeing a high percentage of callers being converted into visitors, maybe your employees need an “incentive” as extra motivation to work harder on setting appointments, rather than just answering questions and giving out information when the phone rings. It could be something as simple as a Starbucks gift card in the dollar amount of the number of callers turned into visitors and something more for every visitor who becomes a resident. (Of course a guest card system and/or telephone log would have to be in place for verification purposes. . . .) If the day-to-day responsibilities of managing your community make you repeatedly absent from your leasing Continued on page 9

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Shoptalk ...continued from page 8 office, consider forwarding your calls to a cell phone. This will minimize the inconvenience to your prospective renters and anyone else that might be trying to get a hold of you, as well as make you readily available in the event of an emergency. By the way: It’s just as important to answer the calls marked “private” as it is to pick up when the calls are routed through an ad source or you see your supervisor’s phone number come up on your caller ID! – It just may be the Secret Shopper calling . . Are you dealing with a unique challenge or unusual situation at your community that you would like to see addressed next month? The Secret

Metro Apartment 2008 The Landlord TimesManager - Metro • October April 2013

Shopper would like to invite you to send in your questions, as other people may be dealing with the same or similar issues. - You will remain as anonymous as the Secret Shopper! Please ASK THE SECRET SHOPPER by making contact via e-mail. Your questions, comments and suggestions are ALWAYS welcome! ASK THE SECRET SHOPPER Provided by: Joyce Kirby SHOPTALK SERVICE EVALUATIONS Phone: 425-424-8870 E-mail: joyce@shoptalkservice.com Web site: www.shoptalkservice.com Copyright © Shoptalk Service Evaluations

INSTITUTE OF REAL ESTATE MANAGEMENT

President • Christina DuCote’, CPM, RPA President Elect • Cammie Allie, CPM, ARM Vice President-Member Services • Kimberly Fuhrer, CPM Vice President-Communications • Jocelyn Burmester, CPMC Vice President Education • Kathi Pearce, CPM Vice President-Finance • Stephanie MacPherson, CPMC IREM Chapter #29 11575 SW Pacific Hwy Suite 210 Tigard, OR 97223 (503) 228-0002 (503) 406-2003 fax

The Role of Water in Economic Growth and Successful Property Management to be Examined by an International Panel at Upcoming IREM® Summit in Washington, DC

Water is a key component in economic growth and maintaining a successful property. As the global population grows, the scarcity, delivery, and cost of water will become a priority for property management professionals worldwide. To address this increasingly critical topic, an international panel of property managers representing a diverse host of countries will anchor a special Global Business Practices Forum titled “The Value of Water: Economics and Ecosystems,” during the 13th annual

Leadership and Legislative Summit of the Institute of Real Estate Management (IREM®), to be held from April 6 through 10 at the Omni Shoreham Hotel in Washington, DC. Leonardo Schneider, ARM® from Rio de Janeiro, Brazil, will speak about how his country is preparing for a predicted shortage and what it means to his properties. He’ll discuss the need to educate tenants, not only because they need to understand that water is a commodity, but because prices are steadily rising.

Advertise in the Landlord Times - Metro Circulated to over 20,000 Apartment owners, On-site, and Maintenance personnel monthly. Call 503-221-1260 for more information.

He’ll also note that it is in everyone’s best interest to conserve. Juan Carlos Blanco, CPM® Candidate, will speak from the European point-of-view. The European Commission has highly developed policies in place to protect water through the Water Framework Directive (WFD). In cooperation with this directive, Spain, as well as other countries, has developed conservation programs, regularly reviewed by the commission. The commission has made it a goal for all European waters to be in good standing by 2015- clean, harvested properly, and reusable, if possible. There also are sanctions regulating the cost of water, linking the price to the amount consumed or the pollution produced by its consumption. Lastly, Tage Flint, general manager of the Weber Basin Water Conservancy District in Northern Utah, will stress that for American

property managers, paying attention to aging water infrastructure is key. He’ll point to the fact that our systems were set-up for a population that had very different demands than today; also, that property managers should be proactive in making sure their properties and communities can handle the current demands on water and develop sustainable mechanisms to meet demands without further depleting this finite resource. Rounding out his presentation, Flint will review how the U.S.’s climate, climate change, and practices will have an impact on future water usage at all levels. Eric Storey, CPM®, chair of the Global Business Practices’ Forum, will conclude by reminding the audience that understanding water and giving it proper attention is critical to being a successful manager. www.irem.org

The Landlord Times - Metro • April 2013

Manufactured Fireplaces: Repair or Replace? Article submitted by Portland Chimney & Masonry, Inc. Many of your units, especially apartments and condominiums, are equipped with Manufactured Fireplaces. Over time, various parts of these Manufactured Fireplaces will wear out. Most commonly the interior fireplace area called the firebox. The firebox consists of the back wall panel, two side wall panels and the floor panel. When the Manufactured Fireplace is cleaned and inspected by a Certified Chimney Sweep and if cracks or holes

are noted in the panels, these panels should be replaced soon after by the Chimney Sweep as a follow up service. The Manufactured Fireplaces are basically appliances and it is vital to their longevity to provide routine maintenance and part replacement as needed. If they are left to deteriorate or are not repaired, replacement of the Manufactured Fireplace is then needed which is much more costly. Not to mention being a fire hazard for the

cleaning. Let’s keep them safe, clean, properly maintained and ready for use.

*The National Fire Protection Association recommends annual inspections and cleanings of fireplaces. “13.2 Annual Inspection. Chimney, fireplaces and vents shall be inspected at least once a year in accordance with the requirements of Section 14.2.” In the Great Northwest fireplaces abound. With the burning season coming to a close this is a good time to perform routine maintenance and

Article submitted by Portland Chimney & Masonry Inc. Reference: National Fire Protection Association 211 Standard for Chimneys, Fireplaces, Vents, and Solid Fuel-Burning Appliances 2010 Edition. Chapter13 Maintenance

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Multifamily Housing Industry More than 21,000 Distributed Monthly www. TheLandlordTimes.com The statements and representations made in advertising and news articles contained in this publication are those of the advertiser and authors and as such do not necessarily reflect the views or opinions of Professional Publishing, Inc. The inclusion of advertising in this publications does not, in any way, comport an endorsement of or support for the products or services offered. Metro Apartment Manager is produced monthly and is published by Professional Publishing Inc. An Oregon Corporation. PO Box 30327 Portland, OR 97294-3327. (503) 221-1260 • (800) 398-6751 Copyright 2013. All rights reserved.

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Request a consultation by May 31 and you could be a winner When you sign up for an energyefficiency consultation during April or May, you’ll automatically be entered for a chance to win one of 10 lighting upgrades of up to $1,000 each. Winning a lighting upgrade would jumpstart your savings and your return on investment. Sign up at PortlandGeneral.com/ LightSavings or call 800-822-1077 by May 31. If you’ve already had a consultation, you can still enter the sweepstakes. (See sweepstakes terms and conditions at PortlandGeneral. com/LightSavings.)

In a hurry? No problem! If you’re short on time, you can still learn a lot with a quick phone consultation. You’ll come away with advice on: • Lighting upgrades and other efficiency improvements that could benefit your properties • Setting energy-saving priorities based on your budget and goals • Energy savings estimates • How to qualify for Energy Trust of Oregon cash incentives that can make lighting upgrades more affordable and quicken payback • Connecting with trusted contractors

CREDITS Time: 7:30am to 9:00am Date: April 17, 2013 Location: Multnomah Athletic Club 1849 SW Salmon St Portland, OR 97205

Multifamily NW Spring 2013 APARTMENT REPORT BREAKFAST

Our distinguished panel of speakers will review the results from the latest Apartment Survey and share their valuable insights concerning various metropolitan markets. Multifamily NW would like to express its deep appreciation to everyone who participated in the latest survey. Your cooperation makes this the most comprehensive study of its kind in the area.

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Please note the registration begins at 7:00am and the breakfast promptly at 7:30am. This breakfast will garner one and half Continuing Education Credits. Registration is required — seating is limited. Registrations within 5 days of the event are subject to availability and an additional $10.00 charge. Registration fees are non-refundable.

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Common lighting improvements in multifamily properties Some lighting upgrades that often pay for themselves quickly in multifamily properties include: 1. Occupancy sensors: Save 25 percent or more by automatically switching off unused lighting. Great for common areas such as laundry rooms, workout rooms and recycling centers. 2. T8 fluorescent lighting and electronic ballasts: High-performance T8 lighting and electronic ballasts offer big savings over T12 fixtures, which often are found in common areas, hallways, service areas and garages. And if you have older T8 lighting, it may be worth upgrading to newer, even more-efficient T8s. 3. LED lighting: This highly efficient, long-lasting technology is great for recessed cans and track lighting. It saves up to 75 percent over incandescent bulbs and curbs maintenance. Lighting is a great first step to energy efficiency Lighting is one of the easiest and most cost-effective ways to save energy in your properties. In addition to lowering your energy costs, today’s technologies offer excellent maintenance savings because some lamps last for 10 or more years before needing replacement. Lighting improvements also improve light quality, making your properties more attractive and competitive. Give us a call or sign up online to find out more. If you have questions you’d like to have answered in future “ Ask the Energy Expert” columns, please e-mail Sarah.Pagliasotti@pgn.com.

Advertise in the Landlord Times - Metro Circulated to over 20,000 Apartment owners, On-site, and Maintenance personnel monthly. Call 503-221-1260 for more information. The Landlord Times - Metro • April 2013

Obama ...continued from front page between homeless persons and families finding stable housing or living on our streets.” “Our economy is improving, but times are as tough as ever for those without a place to call home,” said HUD Northwest Regional Administrator Mary McBride. “These funds help hard-working local organizations keep their doors open and services flowing to help homeless families and individuals put a roof over their heads and stability and opportunity back into their lives.” While the Fiscal Year 2012 funds awarded today are not impacted by the automatic across-the-board budget cuts under sequestration that began March 1st, Donovan cautioned that future budget cuts may reverse significant reported declines in homelessness: “During this challenging budget climate, we must make certain that we don’t balance our books on the backs of our most vulnerable citizens. When we make even modest investments in these programs, we see a measureable decline in homelessness.” HUD recently announced its 2012 “point in time” estimate of the number of homeless persons in America. Approximately 3,000 cities and counties reported 633,782 homeless persons on a single night in January of 2012, largely unchanged from the year before. While HUD found sig-

nificant declines among the longterm homeless and veterans, local communities reported an increase in the number of sheltered and unsheltered families with children. In Oregon, local communities reported an 8.3 percent decrease in homelessness from January, 2011 to January, 2012. HUD’s Continuum of Care grants announced today will continue offering permanent and transitional housing to homeless persons as well as services including job training, health care, mental health counseling, substance abuse treatment and child care. Continuum of Care grants are awarded competitively to local programs to meet the needs of their homeless clients. These grants fund a wide variety of programs from street outreach and assessment programs to transitional and permanent housing for homeless persons and families. In 2010, President Obama and 19 federal agencies and offices that form the U.S. Interagency Council on Homelessness (USICH) launched the nation’s first comprehensive strategy to prevent and end homelessness. Opening Doors: Federal Strategic Plan to Prevent and End Homelessness puts the country on a path to end veterans and chronic homelessness by 2015 and to ending homelessness among children, family, and youth by 2020.

alerts on HUD’s News Listserv. HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.govand http://espanol.hud. gov. You can also follow HUD on twitter @HUDnews, on facebook at www. facebook.com/HUD, or sign up for news

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CLARK COUNTY RENTAL ASSOCIATION President • Lyn Ayers Vice President • Blain Cowley Secretary • Patty Silver Contact • Lyn Ayers • Phone (360) 693-0025 • info@ccrawa.org

Treasurer • Janine Ayers

Membership Committee • Roger Silver

5620 Gher Rd., Suite H Vancouver, WA 98662-6166 (360) 693-CCRA www.clarkcountyrentalassociation.org

President's Message Did you attend last month’s “Nuts & Bolts of Landlording” seminar in Vancouver? If so, what did you like best about it? What topics were most interesting and important? What should we have spent more time on? We would like to hear your comments so that next year we can make improvements. In just a month the legislative session in Olympia will be behind us. Our legislators appear to be mostly focused on state finances. Arguments for either lower spending or higher (additional?) taxes consume our legislators’ time and energy. It appears that so far this session the rental industry is not being aggressively impacted. However it’s also disappoint-

ing that the bills we have submitted or supported are getting little attention. Many of us would agree the residential housing industry is increasingly challenging for us. Unfortunately, landlords often tend to be more independent and thus less socially organized. That fact highlights the need for us to join together and send a unified message to the legislature. We must learn to be more vocal and involved with our legislators. After all is said and done, if they don’t learn about our issues from us, how are they going to seriously consider our challenges when they vote? Spring means that it is time to consider the yards around our rentals.

Trim the bushes and trees before it gets too warm. Make sure the bushes near the front door are trimmed so that no one can hide behind them. Consider planting spiny, sticker bushes under bedroom windows to discourage bad guys from trying to climb in through those windows. Trim your trees back from buildings so they drop fewer leaves on your roofs. The leaves can fill and plug the rain gutters. Of additional concern if leaves pile up on the roof, they will promote moss growth thereby shortening the life of the roof. If you have a vacancy, consider planting a few bright flowers around the front door. It will brighten the unit and give it more “pop”. When

a potential tenant sees your unit for the first time, you want him/her to be impressed by how attractively it is presented to them. Are you using a rental criteria form yet for new applicants for your units? If not, you are violating Washington State law. EVERY tenant must be given the opportunity to review the criteria you will use to make your decision. And this must be done prior to accepting any deposit or screening monies. In fact, to be especially safe, you might make sure they have reviewed it before you get any information from them. Creating your own criteria form is not difficult. Sit down and decide what is important to you. How much income should they have? How many vehicles? What credit score or kind of history must their credit report show? What do you check? Do you run credit? Do you contact former landlords and employers? If so, make sure you include those in your criteria. CCRA is working on a form that can be used as a template that will be available on our website. We plan to announce it in the next few months. Being a good landlord is a neverending learning process. Make sure you keep your mind open to learning new things that will make you a better landlord.

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The Landlord Times - Metro • April 2013

6 Questions ...continued from page 7 been so doing well because there are fewer homeowners and more renters. The market for multifamily housing construction will remain strong in 2013 according to the NAHB chief economist David Crow. He estimates that there will be 299,000 new multifamily residential units built in 2013. He said that this is still considerably less than the 350,000 units the required to keep up with the demand and supply imbalance. That said, the cost of materials and labor make it unfeasible to build in certain areas. Also, there are financing hesitations on the part of some lenders to build new construction multifamily which makes it difficult in some circumstances. The demand for multifamily units will continue to remain strong. Multifamily assets remain have the highest occupancy rates with the most aggressive rent growth and are the easiest to finance. These are all compelling reasons for investors to continue to invest in apartment buildings in 2013. TLT: What you feel are the most important things to consider when hiring a vendor for your business?

DD: First look for someone that is concerned about doing the right thing for the property. Our management company looks to get three bids prior to hiring a vendor. We want to make sure that our vendors are providing work that has been competitively bid. At our management firm I also look to make sure that our vendors have good insurance and name our company and the apartment building as an additional insured. Good references from satisfied customers are important, as well as the knowledge to do what is right for the building and the tenants.

areas. And fourth make sure you do your due diligence very well prior to purchasing a multifamily property. Some of the best deals you do are the deals you donâ&#x20AC;&#x2122;t do. If you donâ&#x20AC;&#x2122;t have the time to manage your own property you will want to consider developing opportunities with sponsors who have a proven track record operating multifamily properties. TLT: For small independent owners do you suggest self-managing or hiring a property manager?

DD: If you or your wife has the time you can do the property management and save a lot of money. However if you are busy executive and you don't have time then really you want to find a property manager. It makes sense to have a property management that has a significant investment in the property so that your interests are aligned. Darrel Dickson is Principal at Preferred Capital Management, Inc. and ApartmentsForSale.com.

TLT: Generally speaking what two or three pieces of advice would you give to a room full of investors? DD: Look to invest in markets where there is something significant going on for example major job and growth population growth and revenue growth are important to add value to a multifamily investment property. Secondly look to obtain long-term fixed-rate financing at low rates. Third look to buy well below replacement cost in well located

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The Landlord Times - Metro â&#x20AC;˘ April 2013

Screening: Don’t Become a Victim of Your Own Decisions Why are we landlords afraid to make tough decisions when it comes to screening prospective tenants? Have you noticed that some potential applicants become pushy or demand sympathy? Haven’t we all heard the same excuse from applicants, “the information you’re asking for is buried somewhere in a moving box”? At this point, do we choose not to require that they complete the corresponding field on the application? Have you found yourself approving applicants who don’t quite meet your screening criteria because you’re afraid to keep the property vacant or simply afraid to

say no? I’m sure you’ve also heard horror stories of Fair Housing investigations resulting in hefty fines for our peers How about those “professional” tenants, those who lie on applications and appeal to our emotions, the scammers who know how to outstay their welcome? Being a landlord comes with all kinds of risks; however, as long as we’re just good at our jobs as landlords, then there is no need to be afraid to screen applications. Making decisions based on fear or emotion can be costly. Makings decision based on informed policy reduces the potential for costly mistakes.

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First, knowledge is our power. Know the laws that govern our industry. Consult with other landlords, educate yourself, take advantage of educational workshops offered by landlord organizations, and read a law book. The laws can change as often as every two years, so be prepared to continue your research. Just when you’ve attended all of the landlord workshops offered by your association, it should be time to start taking them all over again. Don’t consider repeat workshops as refreshers because they will most likely have brand new content and hopefully be taught by a different instructor, who can shed their own light on policies and procedures that may be new to you. Second, know your application and screening criteria by heart. One of the first interactions that you will have with prospective tenants will concern these two items. Wavering or uncertainty on your part will expose any lack of confidence you may have in your business. A landlord who doesn’t know how to answer questions about the application or screening criteria potentially opens the door to all sorts of risk. If a prospective tenant sees that rules

are flexible, he or she sees an opportunity. Stick to your criteria and keep your answers consistent and factual. Giving the tenant more time to provide required documentation is OK; however, lowering your standards is double trouble. Third, make sure that your applicant standards are fair, yet rigid, and charge an application fee. Don’t forget that you’re running a business. Application fees cannot be a profitmaking endeavor; they are there to simply cover your actual costs. Your time is valuable, reports are costly, and you want to ensure that the applicant is serious about renting from you. Collect an application fee per applicant, paid in cash. When you charge an application fee, of any amount, make sure that your screening criteria is in writing, give application receipts, and issue written application denials when applicable. Fourth, know your Fair Housing laws. Specifically, screen someone with a disability as you would any other potential resident. Don’t become fearful if you hear that a prospect has an aid animal. You may verify the prescription for the animal; otherwise, treat the animal as a Continued on page 17

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Screening ...continued from page 16 wheelchair; it goes with the person. Having a proven standard for application criteria protects you from Fair Housing accusations. Treat everyone as an individual, no matter his or her status. Rental history should not come from friends or relatives. Chances are, those persons will tell you that their relative is the best renter ever, to get them out of their house into yours. Absolutely require at least one government-issued photo ID. The list of acceptable ID’s is lengthy, and some of those are listed at http://www. t s a . g o v / t r a v e l e r- i n f o r m a t i o n / acceptable-ids. Note the address on the photo ID and match it to the current address listed on the application. If they don’t match, ask for an explanation. Obtain all signatures required in order to verify information with employers and credit bureaus. Don’t chase down the applicants for this information, as it will hold up completion of the screening process in a timely manner. Make sure to document the date and time that the completed application was received to avoid Fair Housing allegations of picking-andchoosing based on personal biases. If the prospects comment unfavorably on the rigidity of your screening criteria, tell them that they can thank those who came before them who tighter restrictions are now a necessary business precaution. Finally, don’t hesitate to discrimi-

nate against those facts that remain unprotected by the law. Income amount, criminal history, rental history, and the manner in which they treat you can all be grounds for denial. Note the attitude with which they approach the application, look for inconsistencies in their information, and don’t be afraid to ask for more information or further explanation if you see red flags. If prospects are vulgar or blatantly rude, ask yourself if you can do business with them. If prospects attempt to rush the process or become pushy, it’s likely because they HAVE to move to avoid an eviction from their current landlord. Don’t be afraid to change your screening criteria as your business evolves and you’re presented with different challenges. Make sure that you keep dated copies of historical criteria and be consistent with the new rules to avoid

Fair Housing allegations. Tell yourself, “from this day forward, I require…”, and then all that apply must meet the amended criteria from that point on. Again, treat everyone individually, fairly, respectfully, and consistently and you won’t have anything to worry about. My goal here is to convince you to not allow bad landlords, or “professional” tenants to scare you away from one of the most important tasks of our business: screening. Do not be afraid to deny those applicants who simply do not meet your criteria. We have standards set in place for a reason: to protect some of our most important investments. Have Application Denial forms as part of your forms inventory. Be brief with explanation when the applicant inquires, because they will, and stick to the facts. Chances are, your denial will not come as a surprise to them. It’s

never too late, until you’ve handed over the keys. Katie Poole – Hussa is a Licensed Property Manager, Continuing Education Provider and Principal at Smart Property Management in Portland, OR. She can be reached with questions or comments at Katie@SmartPM.co.

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The Landlord Times - Metro • April 2013

Axiometrics ...continued from front page rent growth at the national level during this cycle was 5.32% in July 2011. Breaking rent growth down by asset class, Class C properties continued to post the highest annual effective rent growth rates in February, at an average of 4.3%. Class A properties, which averaged effective rent growth of 4.9% in February 2012, declined to 3.2% in February 2013. While Class A and C properties have been on opposite growth paths in recent months, Class B properties have been very stable, with annual effective rent growth staying close to 3.6%. Occupancy at the national level remained relatively stable in February, though it did increase from 94.05% in January to 94.13% in February. Axiometrics forecasts that the national average occupancy rate will reach 94.9% in 2013. Currently, 28 of the top 88 MSAs have an average occupancy rate greater than 95.0%. Of note, three of the top 10 MSAs for occupancy (Naples, Sarasota, Miami) are in Florida, a state in which other markets are still offering significant concessions to attract tenants. Fewer Concessions Mean Higher Rents As the market has tightened over the past few years, it has become increasingly difficult for renters to find rental concessions, at least in most MSAs. At the national level in February, concessions lowered asking

rents 1.90%, which is the equivalent of 6.9 days of free rent on a 12-month lease. For comparison, Axiometrics reported that concessions lowered asking rents 3.09% last February and 4.62% two years ago. The peak for concession values was in December 2009 when asking rents were lowered 7.47% by the use of concessions. In December 2009, approximately 2,360 of the properties in Axiometrics’ database were offering a concession of at least two months free rent on a 12-month lease; that number dropped to 335 properties in February 2013. While the number of properties offering at least two months free rent has declined substantially, most major MSAs still have a handful doing so. However, 67 percent of the properties offering two months free are concentrated in the Class B- to C- range. Only 28 properties in Axiometrics’ database graded between Class Aand A++ are offering an average of two months or more free. Top and Bottom Performing MSAs Houston, Denver, Oakland, San Jose, Charlotte, and Seattle continue to rank in the top tier for revenue growth, which is calculated by multiplying the effective rent by the occupancy rate and taking the change between periods. Boston and San Francisco, two MSAs that consistently ranked in the top tier for revenue growth the past two years, recently dipped below the

national average. Boston’s revenue growth softened during the first quarter of 2012 and has settled at a rate below 3.0%. San Francisco’s slowdown is more pronounced as it has fallen from a peak of 15.9% last February to 2.9% this February. Class A properties have slowed the most in San Francisco, with the level of rent this February 2.5% lower than it was a year ago. Class B properties have remained solid at a 5.9% growth rate but as in other markets Class C prop-

erties are leading the pack this year with a growth rate in San Francisco of 12.1%. About Axiometrics Axiometrics is the only multifamily research provider to survey every property in its database at the floor plan level every month. Every property. Every month. Only Axiometrics. Learn more at www.axiometrics.com or by calling 214-953-2242.

Top and Bottom Performing MSAs Rank*

Annual Eff Rent Growth

MSA

Occupancy Rate

Revenue Growth

Feb-12

Feb-13

Feb-12

Feb-13

Feb-12

Feb-13 9.5%

Corpus Christi, TX

6.82%

8.45%

94.58%

95.46%

10.0%

Boulder, CO

3.01%

9.72%

96.05%

95.50%

2.6%

9.1%

Cape Coral, FL

5.11%

6.88%

93.51%

94.67%

6.5%

8.2%

Houston, TX

4.81%

6.71%

92.12%

93.27%

6.8%

8.1%

Oakland, CA

6.98%

7.27%

95.43%

96.05%

6.6%

8.0%

Denver, CO

7.05%

6.09%

94.30%

94.99%

7.0%

6.9%

West Palm Beach, FL

1.73%

5.13%

94.01%

94.86%

2.1%

6.1%

Salt Lake City, UT

3.67%

6.06%

95.91%

95.64%

5.5%

5.8%

Birmingham, AL

3.63%

3.51%

92.03%

93.91%

3.5%

5.6%

Charlotte, NC

6.93%

4.97%

94.15%

94.69%

8.8%

5.6%

Seattle, WA

6.59%

5.26%

95.24%

95.46%

6.6%

5.5%

National

3.96%

3.53%

93.81%

94.16%

4.4%

3.9%

Boston, MA

7.42%

2.87%

95.55%

95.61%

7.3%

2.9%

San Francisco, CA

Riverside, CA

73 77

15.48%

4.35%

96.32%

95.00%

15.9%

2.9%

1.16%

1.75%

93.90%

94.68%

0.8%

2.6%

Baltimore, MD

3.05%

1.60%

94.83%

94.52%

3.4%

1.3%

Las Vegas, NV

-1.14%

0.79%

91.63%

91.19%

-0.8%

0.3%

Winston, NC

2.21%

0.32%

92.92%

92.05%

4.0%

-0.6%

Salinas, CA

0.67%

1.17%

94.22%

92.42%

1.8%

-0.8%

Albuquerque, NM

0.19%

-0.11%

93.22%

92.41%

-1.8%

-1.0%

Chattanooga, TN

2.22%

1.14%

95.46%

93.18%

3.4%

-1.3%

Tucson, AZ

2.04%

-1.52%

92.08%

91.46%

3.2%

-2.2%

*Rank is based on annual revenue growth in February 2013. Only the top 88 MSAs were used for the ranking. Axio tracks properties in more than 400 MSAs around the country. Source: Axiometrics Inc.

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