On-Site Rental Housing Journal April 2015 by Professional Publishing, Inc

Rental Housing Journal On-Site

April 2015 - Vol. 9 Issue 04

3. Tenant Screening – Between a Rock and a Hard Place

11. Legislative Session Update from Olympia

4. Taking A Pulse Check On Your Attitude

12. Ed-Con – WmFHA 2015 Education Conference and Exposition

5. Accelerating Housing Costs Have Renters Feeling the Squeeze

16. Behind the Leasing Desk

8. Multifamily Apartment Marketing: Are You Missing Out On New Leases?

18. Rental Boom is Boon to Seattle Economy, Contributing $15.5B Locally in 2013

Property Management of Section 8 and Housing Choice Voucher Programs

22. Student Loan Debt Affects Real Estate Investments in a Big Way

9. Ask The Secret Shopper

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Puget Sound Apartment Owners, Property Managers & Maintenance Personnel

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Apartment Rental Market Trends for the Puget Sound Region King, Pierce, Snohomish, Kitsap, and Thurston counties By Mike Scott

he market vacancy rate is 3.5% in the Puget Sound region, down from 3.8% last fall and close to the 3.6% level it was at a year ago. The market rate excludes vacancies in new properties in lease-up. Counting those, the gross vacancy rate is 4.7%, the same as it was last fall. That’s not bad, especially considering developers opened more than 5,000 new units in the past six months. Our current five-year forecast, published in December, expected the market rate to be 3.8% now and the gross rate to be 4.7%. The forecast also expected vacancies to stay low through the summer and then start to climb due to pressure from all the new construction scheduled to open this year and beyond. We will update our forecast in April. These are some of the findings of our spring survey of 20-unit and larger apartments in the Puget Sound region, published in the ...continued on page 17

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Market Regains Momentum after Winter Slowdown Seattle

he latest Apartment Insights nonrandom survey shows rents increasing $28 per unit and vacancy dropping to 4.46%, according to Tom Cain of Apartment Insights. The data are from his Seattle firmís 1st quarter statistics and trends on 50+ unit properties in the King/ Snohomish market. VACANCY: 4.46% The vacancy rate for our nonrandom survey of conventional, stabilized 50+ unit properties in the King/ Snohomish market is 4.46%. This is down slightly from last quarter's 4.55%. It was 4.3% a year ago. The overall vacancy rate which continued on page 6

Seattle Landlords: Deadline to Register Your Rentals is Here By Derek P. Leuzzi The Rental Registration and Inspection Ordinance (RRIO) was established by the Seattle City Council in fall 2012. The ordinance requires Seattle landlords to register their rental units—in cases where the property has five or more units the deadline was March 31, 2015. Every unit that

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is rented in Seattle must be registered according to the published schedule, with some notable exceptions including com-mercial lodging and adult family homes. See the website for details on exceptions.1

over the next 10 years to ensure habitabil-ity. Inspections will be conducted by a professional and the results will be kept on file at the Depart-ment of Planning and Development.

Safety and Maintenance The ordinance is an effort to improve the housing conditions within the city and ensure basic safety and maintenance. Every unit available for rent will be inspected

Next Steps Landlords must ensure all housing units are up to code and wellmaintained. The checklist used by the inspector is available online and continued on page 7

Advertise in Rental Housing Journal On-Sight Circulated to over 20,000 Apartment owners, On-site, and maintenance personnel monthly. Call 503-221-1260 to place and ad.

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Rental Housing Journal On-Site • April 2015

RENTAL HOUSING JOURNAL ON-SITE

Tenant Screening – Between a Rock and a Hard Place

Landlords are truly caught between a rock and a hard place when it comes to tenant screening. By Paul Prudente, Moco Inc, MyScreeningReport.com® The Rock A failure to adequately screen prospective residents can have a devastating impact on the bottom line – NOI & equity. Further, there is a well-established duty to exercise care in screening prospective residents. A failure to do so has resulted in disaster – followed by substantial civil penalties. The Hard Place There has never been a more hostile legal and regulatory environment when it comes to tenant screening.

First, there is a large and evolving body of law regulating consumer reporting (including tenant screening). There is, of course, the federal Fair Credit Reporting Act (FCRA) as amended by the FACT Act. States often have their own consumer reporting statutes – which may or may not align neatly with the FCRA. Bottom line – these laws impose specific requirements on landlords (Endusers as defined in the FCRA) as well as consumer reporting (tenant screening) agencies. A failure to comply can result in lawsuits or regulatory action! Then there is Title VIII of the Civil Rights Act (as amended) which prohibits discrimination in housing based on race, religion, national ori-

gin, gender, disability and family status. State law often expands on the list of protected groups. Landlords know better than to intentionally violate fair housing law. It is the emergence of the “disparate impact” form of discrimination that poses the greatest risk these days. The disparate impact legal theory holds that a so-called “facially neutral” business practice that has a disproportionate impact on protected individuals may form the basis of a Title VIII (fair housing) claim. A good example might be the practice of denying tenancy based on records of arrest alone (versus convictions). Another is to deny tenancy for any and all criminal convictions – regardless of the nature of the offense or

when it occurred. It is well established that such practices have a disparate impact based on race & national origin. The Good News The good news is that it is possible to thoroughly vet prospective residents and to mitigate the risk of legal or regulatory action. Here’s how: 1. Limit consideration of criminal records to convictions (versus records of arrests). Develop a list of serious offenses – that are truly pertinent to the tenancy. Consider only those where the date of final disposition antedates the report less than seven years. 2. Develop and consistently follow formal (and objective) rental criteria. A critical step in developing criteria is deciding what is acceptable in terms of credit, rental history, criminal and eviction history, length of employment and income – within the context of what is “reportable”. 3. Use a well-designed (and legally compliant) application to rent. ...continued on page 9

Rental Housing Journal On-Site • April 2015

RENTAL HOUSING JOURNAL ON-SITE

Taking A Pulse Check On Your Attitude A Change In Thinking Can Lead To A Change In Behavior And Results, Says Sought-After Speaker

ard times that sap your energy and leave you frustrated are an inevitable part of life. Maybe you lost a job. Maybe your finances took a turn for the worse. Maybe your personal life is in disarray or a health problem emerged forcing a lifestyle change. Such setbacks can leave people feeling afraid, uncertain, angry or unsatisfied, says Darlene Hunter, a renowned speaker and author of “Win-Ability, Navigating through Life’s Challenges with a Winning Attitude,” (www.darlenehunter. com). Overcoming those emotions, she says, comes down to a person’s mindset and perspective. “Your attitude is a critical factor that can either hold you back or help you move forward,” Hunter says. “Everyone needs to take the time to do a pulse check on where they are in their thinking. Is it positive or negative?” A positive attitude comes easily when life is rosy. The real trick is persevering when things go awry so you can continue to strive toward your goals. “The important thing to remember is that we cannot give up just

because things do not work out the way we want,” Hunter says. “We must be persistent and press our way through to the end.” Hunter offers five tips that can help change your thinking, which in turn will change your behavior and, ultimately, change your results. • Be a planner. To live your dream, you need to know what you want and have a plan for getting there. “Planning your day, week and month are critical ingredients to living your dream and purpose,” Hunter says. The “how” and “why” elements are important factors in planning, as they guide you in the direction you want to go. • Be goal oriented. Once you set goals, the next step is to work on completing them. That’s why it’s important to set goals you can accomplish. Each time you can check a goal off your list, you are one step closer to what you ultimately want to achieve. “The sense of accomplishment that comes from reaching even the smallest goals will help you keep moving and striving to get your desired end,” Hunter says.

• Be driven for results. When you are driven, Hunter says, you have a compulsive and urgent desire to accomplish what you are seeking, whether it’s a bonus, a promotion, additional knowledge in a particular area or some other goal. The important factor is to always know what you are seeking. Results-driven people focus on meeting objectives and delivering on the goals they set. • Have a winning attitude. You must be determined, dedicated and devoted to succeed. “You should never give up on your goals and dreams simply because something goes wrong or you are not getting where you hoped to be fast enough,” Hunter says. • Be focused. When you are focused, you have a clear perception and understanding of what you want to accomplish and where you need to go to get there. “Think about long-distance runners who will run a 26-mile marathon,” Hunter says. “They find their pace and then they stay with it. They may get weary and tired, but they find their zone and stay focused and concentrate on what

is needed to get to the end.” “Plenty of stories can be told about people who failed in the beginning, but made it to the top of their profession because they did not give up after being told they weren’t good enough,” Hunter says. “The ability to keep trying and pushing no matter how many failures or obstacles you hit is the power of perseverance and is what ‘WinAbility’ is all about.” Darlene Hunter, (www.darlenehunter.com), is president of Darlene Hunter & Associates, LLC, a motivational / inspirational speaker, author, life and business coach, and award-winning radio talk show host. Her new book, “Win-Ability, Navigating through Life’s Challenges with a Winning Attitude,” is her fourth on the theme of perseverance. She is the host of “The Darlene Hunter Show”, winner of the Fishbowl Radio Network 2013 Distance Show Of The Year Award. Hunter has been a top performer in management for more than 30 years.

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RENTAL HOUSING JOURNAL ON-SITE

Accelerating Housing Costs Have Renters Feeling the Squeeze WASHINGTON, March 16, 2015 / PRNewswire/ -- The gap between rental costs and household income is widening to unsustainable levels in many parts of the country, and the situation could worsen unless new home construction meaningfully rises, according to new research by the National Association of Realtors®. NAR reviewed data on income growth, housing costs and changes in the share of renter and owneroccupied households over the past five years in metropolitan statistical areas1 across the U.S. The findings reveal that renters are being squeezed in many metro areas throughout the country due to the disproportionate growth in rental costs to incomes. New York, Seattle and San Jose, Calif. are among the cities where combined rent growth is far exceeding wages. Lawrence Yun, NAR chief economist, says the disparity between rent and income growth has widened to unhealthy levels and is making it harder for renters to become home-

owners. "In the past five years, a typical rent rose 15 percent while the income of renters grew by only 11 percent," he said. "The gap has worsened in many areas as rents continue to climb2 and the accelerated pace of hiring has yet to give workers a meaningful bump in pay." According to Yun, the share of renter households has been increasing and homeownership is falling. Those financially able to buy a home in recent years were insulated from rising housing costs since most take out 30-year fixed-rate mortgages with established monthly payments. Furthermore, a typical homeowners' net worth climbs because of upticks in home values and declining mortgage balances. The result has been an unequal distribution of wealth as renters continue to feel the pinch of increasing housing costs every year. "Meanwhile, current renters seeking relief and looking to buy are facing the same dilemma: home prices3 are rising much faster than their incomes," adds Yun. "With rents taking up a larger chunk of household incomes, it's difficult for first-time buyers – especially in high-cost areas

– to save for an adequate downpay- have experienced the highest rent increases are popular to millennials ment." NAR's research analyzed changes because of their employment opporin the share of renters and home- tunities," adds Yun. "With a stronger owners, mortgage payments, medi- economy and labor market, it's critian home prices, median household cal to increase housing starts for income for renters and the rental entry-level buyers or else many will face affordability issues if their costs in 70 metro areas. The top markets where renters incomes aren't compensating for the have seen the highest increase in gains in home prices." The National Association of rents since 2009 are New York (50.7 percent), Seattle (32.38 percent), San Realtors®, "The Voice for Real Jose, Calif., (25.6 percent), Denver Estate," is America's largest trade (24.14 percent) and St. Louis (22.26 association, representing 1 million members involved in all aspects of percent). Looking ahead, Yun says a way to the residential and commercial real relieve housing costs is to increase estate industries. Regional median home prices are the supply of new home construction – particularly to entry-level buy- from a separate sampling that ers. Builders have been hesitant since includes rural areas and portions of the recession to add supply because some smaller metros that are not of rising construction costs, limited included in this report; the regional access to credit from local lenders percentage changes do not necessarily parallel METRO, changes in ARIZONA the larger and concerns about the re-emergence VALLEY, of younger buyers. Yun estimates metro areas. The only valid comparihousing starts need to rise to 1.5 mil- sons for median prices are with the lion, which is the historical average. same period a year earlier due to Housing starts have averaged about seasonality in buying patterns. 766,000 per year over the past seven Quarter-to-quarter comparisons do not compensate for seasonal changyears4. "Many of Feb, the metro areas thatAug, Oct, Dec ...continued on page 21 Apr, Jun,

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Momentum after Winter Slowdown ...continued from front page includes properties in lease-up increased from 6.44% to 6.59%. King has a vacancy rate of 4.29%, down from 4.47%, and Snohomish County bumped up to 5.11% from 4.83%. For the second straight quarter, the University District has the lowest vacancy rate, 2.36%. Ballard still has the highest vacancy rate at 7.73%, but it saw the greatest improvement of any submarket. The vacancy rate here was in the 10% range the two previous quarters. Areas above 6% are Seattle's First Hill, East Bellevue and South Everett. RENTAL INCENTIVES: $15 (1.1%) Rental incentives eased this quarter from $17 to $15 per month. In the two-county area 26.2% of the properties are offering incentives, up from 24.8% last quarter. ABSORPTION: +1,290 Units Overall, there were +1,290 units absorbed this quarter, down from +1,658 units in the fourth quarter. The greatest absorption occurred in Kent with over 150 units. RENTS: $1,341 per Unit $1.60 per Square Foot Rents climbed $28 to $1,341 per unit, a significant increase of 2.1%. However, this came on the heels of a $5 drop last quarter. At the top of the chart are the

downtowns of Seattle and Bellevue, where rents are $2,084 ($2.53 sf) and $1,961 ($2.22 sf) per month, respectively. These submarkets were among those experiencing the strongest increases. The other is Ballard. Rents here increased to $1,682 ($2.43 sf). However, rents in Ballard had declined over the past two quarters. Renters can still find average rents for under $1,000 in SeaTac and Des Moines. NEW CONSTRUCTION There are currently 19,560 units under construction, just above the 19,280 last quarter and 14,884 units a year ago. Forty-six percent of these are in the city of Seattle, 24% on the Eastside, 22% in South King, and 8% in Snohomish County. Seattle's share of new construction has been in decline for some time. Even though at 46% Seattle is about double that of the Eastside and South King, it is way down from its 73% share two years ago. Featured in the photo, the 386unit Premiere on Pine in downtown Seattle opened in the first quarter. It was developed by Holland Partner Group and is managed by Holland Residential. There are 12,392 units that have either opened or are under construction with a 2015 completion date. If they are all up and running this year, it will break the record set in 1989.

We have preliminary information for the next two years. We are tracking 12,192 units that are either under way or scheduled for a 2016 completion. For 2017 the number is 5,911 units. The grand total for all of the units in various stages of the pipeline is 53,790 units. This is up from 52,668 units last quarter and 46,755 units a year ago. OBSERVATIONS After a weak fourth quarter, first quarter results show the market's continuing strength. The vacancy rate declined to 4.66% and rents surged $28 per unit. We were surprised and impressed with the performance of the Ballard area. There have been more units built in this submarket relative to the existing stock than in any other submarket. Yet, the vacancy rate dropped 275 basis points to 7.73% and rents increased nearly 5% after two quarters of no growth. The overall vacancy rate which includes properties in lease-up is still very high at 17.69%. There is one statistic that we always mention but doesn't get much attention. It is worth highlighting this quarter. The overall vacancy rate that includes properties in lease-up is currently 6.59%. While it is up from just 6.44% last quarter, this vacancy rate hasn't been this high in four years.

2015 is potentially a record-breaking year for new construction. Last year's job growth was a hefty 3%. Projections for this year are in the 2.5% range, which will still create plenty of demand for apartments. Another plus for the rental market is the scarcity of homes on the market for first-time home buyers. Also, since home values increased 6% over the past year, they are less affordable. Our outlook for 2015 is still the same as it was last quarter. Income streams will slow a little but the market will be solid. Tom Cain of Apartment Insights Washington is a member of the nonprofit Central Puget Sound Real Estate Research Committee in charge of providing apartment rent and vacancy data. Tom has been a member of the Committee for over 25 years, and has been researching apartment market trends in the Seattle area since 1978. His company surveys the five counties in Central and South Puget Sound. This article highlights survey results that subscribers can access from an online database of all 50u+ properties. Apartment Insights also provides customized rent reports and market reports. HYPERLINK "http://www. apartmentinsightswa.com/"www.apartmentinsightswa.com 206-632-2220

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RENTAL HOUSING JOURNAL ON-SITE

Register Your Rentals...continued from front page is similar to a move-in checklist. Owners will be notified when a proper-ty has been selected for inspection. Owners may hire either a City inspector or qualified private inspec-tor to conduct inspections for a fee. The approximate inspection fee is $130 for the property including the first unit, and $25 for each additional unit on the same property. One of the effects of the new ordinance is that illegal units including unauthorized “mother-in-law” or accessory dwelling units will be found and shut down. Landlords are strongly advised to confirm their rental units are legal and properly zoned. A landlord may be required to pay relocation assistance if a property is determined to be illegal or uninhabitable. Non-Compliance There is a $20 late fee and the potential for significant monetary penalties for not registering rental units in compliance with the new

ordinance. Tenants will now be able to research and find out if a unit is habitable, legal, and registered—and report to the City if the rental is not in compliance. Further, land-lords may be prohibited from evicting tenants if the rental is unregistered with the Department of Plan-ning and Development, regardless of whether just cause exists. Registration Fees and Deadlines The cost to register the first rental unit for five years is $175.00. Each additional unit costs only $2.00 to register, with a modest per unit discount after 10 units. Rental registrations must be renewed every five years. Every rental must be registered, so if you add a unit, you must also add a registration. Properties with five or more units should already be registered as of March 31, 2015. For properties with 1-4 units, there is a registration deadline schedule based on ZIP codes available online.

For tips or help on how to comply with this ordinance, contact the Seattle Department of Planning and Development or your legal resource. 1www.seattle.gov/dpd/codes-

rules/codes/rentalregistration/

Checklist: http://www.seattle.gov/dpd/cs/groups/ pan/@pan/documents/web_informational/s048492.pdf Registration table by zip code for units 1-4: http://www.seattle.gov/dpd/cs/ groups/pan/@pan/documents/web_

informational/s047748.pdf For more information visit: http://www.seattle.gov/dpd/codesrules/ codes/rentalregistration/ Derek Leuzzi is an associate at the Loeffler Law Group PLLC. Mr. Leuzzi’s practice emphasizes landlord-tenant relations and real estate litigation. He received his law degree from Gonzaga University School of Law in 2012. He has published articles on topics related to environmental, construction and real estate law.

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RENTAL HOUSING JOURNAL ON-SITE

Multifamily Apartment Marketing: Are You Missing Out On New Leases? By John Wilhoit Jr

any people believe that property management is an old-line business that moves slowly. If you believe that then your team is already half a mile behind in a one mile race. In other words; you are toast because the competition is using all the best practices at their disposal to make sure they close every new prospect that steps on their property. If your on-site team is “undertrained” consider revising your procedures to get quality marketing in motion in real-time. In other words,

implement best practices with the end goal in mind; closing more (lease) sales. Following are three areas to implement improvements. Leasing and Sales staff training. All of your marketing falls down if once the prospect come to your door there is no one there to greet them and begin the process of becoming a new resident. Your team must know how to implement the leasing sales process and engage accordingly. The process must be seamless. Gaps in training lead to fewer closed leases. Market surveillance (knowing competitive assets). Full time property management businesses under-

stand that market dynamics change at a velocity much faster than the casual observer believes. Utilizing current market information means keeping continually in the loop on pricing and incentives offered by competitors. Knowing, really knowing, the attributes and pricing of directly competitive assets is paramount to understanding your place within the market. Absorption (unit counts). Being up-to-date with changes to unit counts in your marketplace (and submarket) is imperative. With new construction, absorption is an absolute number but there is more to unit

counts. Assure that your team is aware of current and pending changes to the competitive marketplace. Gaining a new lease is a process. Preparedness is the initial stanza of the process; prepared leasing staff, sales material, office reception, ready units, grounds. These are all part of your property presentation towards making the sale and gaining a new resident.

around nearly 80 years! Section 8 of the Housing Act of 1937, authorizes the payment of rental housing assistance to private landlords on behalf of approximately 3.1 million lowincome households. It operates through several programs, the largest of which, the Housing Choice Voucher program, pays a large portion of the rents and utilities of about 2.1 million households. The US

Department of Housing and Urban Development (HUD) manages the Section 8 programs. One property manager I interviewed who participates in the Housing Choice Voucher program said she feels secure knowing the government funds will be deposited in her client’s bank account every month. She explained the HUDmanaged program was meant to pay for “a portion” of the rents and utili-

ties of those in its care. But often, as she explained, payments are greater than competitive rental prices.

Published courtesy of Multifamilyinsight.net

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A Real-Life Example of How Section 8 Renters Pay Off for Landlords Instead of renting a recently vacated house on the open market, the property manager encouraged her landlord-client to offer it to the local Section 8 housing authorities.

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Rental Housing Journal On-Site • April 2015

RENTAL HOUSING JOURNAL ON-SITE

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he importance of teamwork can not be overstated or emphasized enough. Yet sometimes boundaries are so clearly drawn regarding the role or “job description” of each staff member, that those who desire to “go the extra mile” are forced to remain at the starting line and watch prospects and residents “fall through the cracks.” I was recently asked the following

question which brings up the issue of maintenance and leasing staffs getting involved with each others’ job duties: Q: Is it appropriate for maintenance staff members to get involved in the leasing process and how far should they go? A: This is a very important subject, and it brings up another ques-

Northwest

tion: Is it appropriate for leasing/ office employees to get involved in some aspects of maintenance and how far should they go? As property management companies have to make difficult budget decisions. Some budget cuts have involved a reduction in leasing and maintenance personnel. The result is less office coverage and slower response time to resident requests, as one or two team members are trying

to do the jobs of three or four people. Providing some “basic” training to your leasing and maintenance personnel to create an “overlap” in their job responsibilities will take some of the pressure off your team members and provide better service to prospective residents and existing residents. If a leasing person is away from the office and a maintenance staff ...continued on page 21

to requests for copies or disputes regarding the content (of tenant screening reports).

and pre-employment screening services for the rental housing industry. He has been at the helm of Moco for nearly 12 years. He is principal architect of its pioneering direct-to-consumer tenant screening facility – marketed under the MyScreeningReport.com® brand – developed in collaboration with the low income housing community and designed to address the needs of a growing independent rental owner marketplace.

Rock and a Hard Place ...continued from page 3 The application does two things for you. It collects the information you need to begin the screening process and it provides (the applicant with) the disclosure and authorization wording required by state and federal consumer reporting law. 4. Provide a copy of your criteria with the application – so the applicant knows up front whether they qualify or not. It is not only the right thing to do. It saves time and money – for you and your applicant!

5. Use a reputable and legally compliant tenant screening company – lean on them for help with (FCRA) compliance, process and forms. Consumer reporting law is complex, at times ambiguous and often conflicted. Tenant screening companies live and breathe this stuff on a daily basis. No sense reinventing the wheel! 6. Issue Written Notices of Adverse Action – immediately upon denial or conditional approval of an applicant. Make sure that your tenant screening company responds quickly and respectfully

So while it may be true that we find ourselves between a rock and a hard place these days. It is also true that by following a few best practices – we can thoroughly screen prospective residents without running aground! Paul Prudente is vice president and general manager of Moco, Incorporated, a specialized consumer reporting agency focused on delivery of quality tenant

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RENTAL HOUSING JOURNAL ON-SITE 18300 Cascade Ave. S., Suite 130 Tukwila, WA 98188 425 656-9077 • 425 656 9087 (fax) admin@wmfha.org

• Executive Director – Jim Wiard • President – Kris Buker – Vice President – Brett Stevens • Secretary – Heidi Daniel • Treasurer – Becky Sanders • Vice President of Suppliers Council – Rob Pendleton • Immediate Past President – Gail Duke

Legislative Session Update from Olympia

n order to continue our strong commitment to the multifamily industry and represent our members through legislative advocacy, the Washington Multi-Family Housing Association continues to work hard for you. The Government Affairs team at WMFHA has been tracking legislative issues in Olympia the past three months. Through the efforts of our lobbyists and volunteer members, we have testified at several public hearings, either for or against proposed legislation, to ensure our members’ needs and the industry’s interests are considered carefully by lawmakers. In February, our association members and staff joined a coalition of other state housing associations and interested parties in our annual Day

on the Hill Lobby Day in Olympia. Over 75 advocates from our industry met with our local legislators to educate them on the critical work we do to create vibrant communities through providing safe, affordable, quality housing. Every year, poor legislation is introduced that would create hardships on multifamily owners, managers and residents alike, and our goal is to explain to our public officials the importance of our industry to the local and state economy, and our perspective on bills introduced that session. Here is a summary of legislative issues effective April 7, 2015: Only one bill relating directly to landlord issues remains in play in Olympia. SB 5538: Procedures for Dealing with Deceased Tenant’s Property. This bill creates procedures for dealing with the personal property of a deceased tenant who is the only occupant of a rental unit. The Senate bill passed by a vote of 47 – 0. The House Judiciary Committee passed an amended version of the bill. We continue to work with tenant advo-

Toni Blake TotallyToni.com

cates to come up with language that all parties can accept. WMFHA position: Support. The Following Landlord Bills Are Dead For This Session: • HB 1257: Portable Tenant Screening. This bill defined a “comprehensive screening report.” If a landlord is presented with the opportunity to access such a report on-line, the landlord must either accept this report or pay for any additional report the landlord wants to use. The House bill was amended to change the effective date to May 1, 2017 and passed the full House. The bill was not given a hearing in the Senate. WMFHA opposed the bill because of the complexities of the screening process and the mandate this would have enacted. • SB 5221: Allows for Disposition of Tenant’s Property after Eviction. The bill allowed a landlord to dispose of any tenant property that has been removed from the unit during a physical eviction after a 5-day waiting period. The bill passed the Senate

Traci Brown Body Language Trainer

by a vote of 47 – 0 but did not get reported out of the House Committee. WMFHA supported this bill. • HB 1460 / SB 5376: Prevents Screening Companies from Disclosing Eviction Lawsuits in Limited Circumstances: The Senate bill was amended. It provided that screening companies would be prevented from disclosing the existence of a filed eviction lawsuit that has been sealed by a court order. There is no direction provided in the bill to govern rules or procedures for sealing such court files. The House bill is dead. WMFHA opposed because of the lack of guidelines for sealing. • HB 2051 / SB 5377: Requiring 90-days Notice for Rent Increases of 10% or More. Seattle already has an ordinance that requires 60-days notice for a rent increase of 10% or more in any 12-month period. These bills would have authorized but not require a city to adopt a law that could require 90-days’ notice for such a rent increase. They would continued on page 15

Jen Piccotti Satisfacts Research

THANK YOU TO OUR GOLD SPONSORS!

Rental Housing Journal On-Site • April 2015

RENTAL HOUSING JOURNAL ON-SITE

May 19, 2015

SUPER POWERS.. UNITE!! This event is BYOC..... Bring Your Own Cape!!

Ed-Con Ed-Con

Unleashing MARVELous Results!

You Don't Wanna Miss This!

2015 Education Conference and Exposition Washington Multi-Family Housing Association

Tuesday, May 19, 2015 Meydenbauer Conference Center

Unleashing MARVELous Results! 2015 Education Conference and Exposition You Don't Wanna Miss This!

11100 NE 6th St, Bellevue, WA 98004

R POWERS..UNITE!!

YOC.....Bring Your Own Cape!!

Registration, Breakfast, Networking And Trade Show: 8:00am – 8:30am Special Keynote Address 8:35am - 9:20am Your Determination = Your Destination Toni Blake Passion, drive and a standard of excellence determine how far an individual goes in life. Your level of success is a direct result of your personal determination. What is your finish line? What is your job? When are you finished? Join Toni for an inspirational journey of excellence and establish foundations for your new finish line.

Class Session One: 9:30am - 10:30am

Mastering Magical Persuasion Traci Brown Room 405:

Discover the secrets of how to strategically use your body language to persuade & influence. Increase your bottom line & get lots more of what you want. Do you know how to instantly read your clients? Can you tailor your body language and arguments 12

to fill their unconscious needs? This Talk Will Teach You How! Your clients are always communicating with you. Do you know what they’re saying? You are always communicating with your clients. Do you know what message you’re sending? It’s true. You are unconsciously communicating all the time in any situation: • Networking • Sales Meetings • Negotiations • With Your Kids or Spouse It’s your responsibility to hear what others are telling you and then give them your message in the way they need to hear it. The end result is a person that’s open to what’s being said and easily influenced because deep unconscious needs are being met and objections are eliminated or bypassed. This program is fun and includes lots of exercises. Participants will leave more flexible in their communication: seeing the world with new eyes and listening with new ears. These skills will assist you in the office and in your personal life. You’ll learn: • How to get people to like you using only body language • How to read body language • Three questions you can ask anyone to instantly connect with them • Four ‘Magic Words and Phrases’ to persuade anyone And MUCH more

Jumping Over Renewal Objections in a Single Bound! Jen Piccotti Senior V.P of Education & Consulting, SatisFacts Research Room 406:

Raising rents at renewal can be challenging, especially in today’s market of higher than average rent increases. In today's market, most residents expect that another year at your community will include a rent increase, so if you are encountering major objections it may be time to examine the issue more closely. Learn the latest metrics on what drives these objections and a 6 STEP PLAN to successfully negotiate a renewal discussion!

Tradeshow and Networking: 10:30am – 11:00am

Class Session Two:

11:00am - 12:00pm Body Language Confidential Traci Brown Room 405:

Reinvent the way you look at people and learn to interpret their body language. Develop the skills to quickly respond to hidden cues in any critical situation. In this fun, interactive and informative talk, you’ll learn how to read body language and use specific verbal language so that you can instantly create deeply connected relationships: • Accelerate your networking • Interview powerfully • Increase sales • Make anyone really comfortable around you • Elegantly persuade others. You’ll be able to recognize and appropriately respond to the hidden messages others are always sending and ensure that you’re sending the right message. You’ll be able to respond to once hidden clues so you can get the hidden messages and close the sale at the price you want. While diving into current events and celebrity body language playing Traci’s new game show segment, Body Language Blitz, you’ll compete against other audience members as you learn:

• The real meaning behind a handshake • How to interpret body language and respond appropriately • How to strategically use other’s body language so they’re open to you and your ideas

Closing In a Flash!...On the First Visit!! Toni Blake Room 406:

The days of closing a lease on the prospect’s first visit may seem like Superman’s Kryptonite, but in this class you’ll learn how to POWER UP and sign more leases at the initial visit. The rental housing market is as competitive as it’s ever been. Although we’re working harder for leases, if you have the right people, the right training, and the right attitude, Toni will help you develop a winning strategy, gain more confidence and know your prospects’ wants and needs. It’s all about getting that application and deposit!

Tradeshow, Lunch and Networking: 12:00pm – 1:00pm

Class Session Three: 1:00pm - 2:00pm Crack the Code of Lies Traci Brown Room 405:

Detecting lies is crucial in business and life. This program uses video from current events to demonstrate techniques. And to apply the learning, we’ll play “Two Truths and a Lie.” Detecting lies is crucial in business and life. Do you know if your clients really like your proposal? Do they like the job you did? Are they telling you the ... continued on page 13 Rental Housing Journal On-Site • April 2015

RENTAL HOUSING JOURNAL ON-SITE

ed-con..continued from page 12 truth about their budget? Are they telling you all of their needs? Are the people you’re interviewing inflating their resume? And most importantly, did your kids eat those chocolate donuts that were on the counter… or did the dog? You Will Learn: • How to instantly tell if someone is lying • Which lies are important • How to elegantly uncover the truth

CUSTOMER SERVICE: Building Meaningful Moments Toni Blake Room 406:

LIFE is about building more than just apartments and amenities – it’s about building meaningfulmoments. This seminar moves beyond company focus, it lets people know that great customer service is a personal

choice. It is not just what you do — it Led by our national speakers Toni Tradeshow, Snack SUPER POWERS..UNITE!! is WHO YOU ARE. Toni will help Traci Brown and Jen Piccotti, Treats And Networking: Blake, you to discover your innate ability our Think Tank Team will guide you 2015 Think Tank! 2:00pm - 2:30pm for diplomacy, negotiating, and demthrough several rounds of collaboraYou won't want to miss our 3rd annual Think Tank – onstrating extreme confidence tive idea generation for today’s busithrough personal excellence. This ness challenges. WMFHA's very own brainstorming extravaganza! seminar speaks to the heart of cusIf you have a problem - you will tomer service — compassion, underleave with several solutions! This is Afternoon Bonus Session: 2:30 p.m. - 4:30 p.m. standing, and integrity. Toni will not your average “sit back and lisCenter Hall A: Think Tank Brainstorming Event!! share innovations, techniques, proten” workshop; this is a “roll up your by our national Think Tank we Team are in this together cedures, powerful socialLedtrends and speakers Toni Blake, Traci Brown and Jen Piccotti, oursleeves, will guide more you through several rounds of collaborative idea generation forB today’s business give your entire team deeper R A I N S T O R M I N G 2:30pm 4:30pm challenges. If you have a problem - you will- leave with several solutions! This is not your powerful tools for successful relaEXTRAVAGANZA”!!! average “sit back and listen” workshop; this is Hall a “roll A: up your sleeves, we are in this together Center tionships. BRAINSTORMING EXTRAVAGANZA”!! Toni will inspire your team to find the “heart” within each situation and SUPER POWERS..UNITE!! communicate a sense of pride and superior service. In challenging Regular Registration times like these, it is not what hapThe 2015 Think Tank is Sponsored by our friends at: April 4-May 1 Brainstorming Event!! pens to us, it is what we do about it. Member $79 Knowledge is power and experience Toni Blake Non-Member $99 is the greatest teacher. Don’t miss Center Hall A: Late Registration this life-changing educational Sponsored by our friends at After May 1 experience designed to take your Buy Rite Carpets Member $89 staff to the next level and surpass the expectations of Non-Member $109 today’s resident. GOT TO OUR WEBSITE

Afternoon Bonus Session:

PRICING

2015 Think Tank!

You won't want to miss our 3rd annual Think Tank – WMFHA's very own brainstorming extravaganza!

Afternoon Bonus Session: 2:30 p.m. - 4:30 p.m.

Center Hall A: Think Tank Brainstorming Event!!

Led by our national speakers Toni Blake, Traci Brown and Jen Piccotti, our Think Tank Team will guide you through several rounds of collaborative idea generation for today’s business challenges. If you have a problem - you will leave with several solutions! This is not your average “sit back and listen” workshop; this is a “roll up your sleeves, we are in this together BRAINSTORMING EXTRAVAGANZA”!!

The 2015 Think Tank is Sponsored by our friends at:

TO SUBMIT A TOPIC FOR THE 2015 THINK TANK. GOT TO OUR WEBSITE TO SUBMIT A TOPIC FOR THE 2015 THINK TANK.

Toni Blake - TotallyToni.com Toni Blake - TotallyToni.com

Trade Show Exhibitors • AC Moate

• HD Supply

• Rainier Asphalt

• Wilmar Industries

• Affordable Housing Risk Pool Program

• Interstate Restoration

• realtor.com rentals

• Zillow

• American Floors and Blinds

• Minol, USA

• Red Rock Resurfacing

• National Credit Systems

• SatisFacts Research and Apartment Ratings

• Apartment Advantage

• One Call Now

• Apartment Magazine • Buy Rite Carpet Wholesaler

• One Way of Washington Carpet Cleaning

• Columbia Recovery Group

• Pacific Pavement Protection

• Condo Internet

• Palmer Insurance

• Conservice

• Precision Concrete Cutting

• CORT

• PRECOR Commercial Fitness

• Executive Coatings & Contracting

• Property Staffing Associates

• Genesis Credit Management

• Public Health – Seattle & King County

TIMELINE Time

Speaker

Registration

8:35-9:20am

Registration, Breakfast, Networking and Trade Show

Special Keynote Address

8:35-9:20am

Toni Blake

Your Determination = Your Destination

Hall A

Session One

9:-10:30am

Traci Brown

Mastering Magical Persuasion

405

Jen Piccotti

Jumping Over Renewal Objections In A Single Bound!

406

10:30-11:00am

Session Two 11:00-12:00pm

Class

Room

Tradeshow and Networking Traci Brown

Body Language Confidential

405

Toni Blake

Closing In A Flash!... On The First Visit!!

406

Networking

12:00-1:00pm

Tradeshow, Lunch And Networking

Session Three

1:00-2:00pm

Traci Brown

Crack The Code Of Lies

405

Toni Blake

Customer Service: Building Meaningful Moments

406

Networking

2:0-2:30pm

Tradeshow, Snack Treats And Networking

Bonus Session

2:30-4:30pm

Toni Blake

Rental Housing Journal On-Site • April 2015

Toni is a popular international speaker, consultant, author and comedienne inspiring thousands of multifamily apartment industry professionals every year. With over 30 years of training experience, her “laugh while you learn” approach has made Toni one of the most sought-after experts in her field. As a published author, Toni’s ideas have been published in dozens of trade magazines and blogs across the country. In November 2008, Toni was awarded the Multifamily PRO “Industry Legend” Award. She was selected by the National Apartment Association as one of the industries’s “Marketing Gurus” and is recognized for her research and innovative concepts in customer service, sales, marketing and social media. Toni was honored at the very first Multifamily PRO “People’s Choice Awards” winning awards for “Educational Excellence” and “Imagination and Innovation.” She currently serves as President of TotallyToni.com. Toni lives in Northern Colorado with her husband.

Trade Show Exhibitors:

AC Moate Affordable Housing Risk Pool Program American Floors and Blinds Apartment Advantage An industry favorite for meetings, conferences, awardTrade dinners Show and private consultations, you will Exhibitors: always enjoy Toni Blake! Apartment agazine Trade ShowMExhibitors: AC Moate Buy AC Rite Carpet Wholesaler Moate Affordable Pool field. Program AsColumbia aAffordable published Toni BlakeHousing has Risk her Recovery Gauthor, roup Housing Risk Pool Program Toni’s American Floors and Blinds American Floors and Blinds published in dozens long been recog- ideas have been Apartment Advantage Apartment Advantage Trade Show Exhibitors: Apartment Magazine and blogs across nized Apartment as a leader Magazine of trade magazines Buy Rite Carpet Wholesaler AC Moate Columbia Recovery Group Buy Rite Carpet Wholesaler the country. In November 2008, Toni in multifamily Affordable Housing Risk Pool Program Columbia Recovery Group American Floors and Blinds m a n a g e m e n t was awarded the Multifamily PRO Apartment Advantage training. Her cut- “Industry Legend” Award. She was Apartment Magazine Buy Rite Carpet Wholesaler ting-edge con- selected by the National Apartment Columbia Recovery Group

Speaker Profile

Event

Networking

Toni Blake has long been recognized as a leader in multifamily management training. Her cutting-edge concepts will keep you in front of the market instead of always struggling to keep up. This doesn’t mean you have to jump on board with every new trend that comes along, but it does mean your marketing strategy must relate to today’s consumer to be effective. Toni takes the guess-work out of it by giving you key market tools infused with solid fundamentals.

Think Tank Center Brainstorming Event!! Hall A

cepts will keep Association as one of the industries’s you in front of the “Marketing Gurus” and is recognized Blake Traci Toni Brown - Body Language Trainer Show Exhibitors: market Trade instead of for her research and innovative conPersuasion and body language expert, speaker and author, Traci Brown speaks globally and AC Moate This energizes audiences world-wide with eye-opening, simple &up. memorable techniquescepts that can be in customer service, sales, maralways struggling to keep applied immediately to your career and your personal life. She is a frequent guest R onisk TVPool Program Affordable Housing interpreting the body language you in current events. the world with new eyesketing and and social media. Toni was doesn’t mean haveYou’lltosee jump on American Floors and Blinds Apartment that Advantage honored at the very first Multifamily board with every new trend Apartment Magazine Trade Show Exhibitors: comes along, but it does mean your PRO “People’s Choice Awards” winBuy Rite Carpet Wholesaler AC Moate roup awards for “Educational marketing strategy must Columbia relateRecovery to Gning Affordable Housing Risk Pool Program Excellence” and “Imagination and today’s consumer to be effective. Toni American Floors and Blinds Apartment dvantage takes theAguess-work out of it by giv- Innovation.” She currently serves as Apartment Magazine ing you key market tools infused with President of TotallyToni.com. Toni Buy Rite Carpet Wholesaler Columbia Recovery Group lives in Northern Colorado with her solid fundamentals. Toni is a popular international husband. An industry favorite for meetings, speaker, consultant, author and comedienne inspiring thousands of multi- conferences, award dinners and prifamily apartment industry profession- vate consultations, you will always als every year. With over 30 years of enjoy Toni Blake! training experience, her “laugh while ...continued on page 14 you learn” approach has made Toni one of the most sought-after experts in 13

great change in their lives. The first thing taught in NLP was body language, persuasion and how to create deep unconscious connection with others. After years of using these skills working with clients and talking them out of their problems and also teaching NLP Practitioner Certification trainings, a client asked her to put together a program for lawyers on how to pick a jury and persuade them based on body language. She very reluctantly said yes. Much to her surprise, there was so much interest in the program that she began presenting to all kinds groups across the country including sales teams and associations. Participants liked walking out of the presentation with immediately usable persuasion and body language skills and gave the program rave reviews.

RENTAL HOUSING JOURNAL ON-SITE

Speaker Profile ...continued from page 13

Traci holds a business degree from the University of Colorado and is a certified master practitioner of Neuro Linguistics.

Persuasion and body language expert, speaker and author, Traci Brown speaks globally and energizes audiences worldTraci Brown wide with eyeopening, simple & memorable techniques that can be applied immediately to your career and your personal life. She is a frequent guest on TV interpreting the body language in current events. You’ll see the world with new eyes and remember the tools she shares. Traci enjoys using the body language and unconscious persuasion skills she teaches in her presentations in all sorts of business negotiations and has even adapted the skills to talk herself out of an embarrassing number of traffic tickets. Becoming a body language expert and a professional speaker on the subject is not something that Traci Brown would have ever guessed she’d be doing. Her first career was bike racing. She raced for 12 years and had quite a successful career winning three US Collegiate Cycling Championships and earning a spot on Team USA. Through sports she became keenly aware that the mind was the primary factor which determined her success. After disappointing results with traditional sports psychology, she discovered Neuro Linguistics (NLP), Hypnosis and Hawaiian Huna. Her results changed not only her perfor-

mance, but her life. Upon retirement including developing dynamic, practifrom racing, she got trained in these cal and effective educational programs disciplines and still coaches clients one and resources, conducting resident on one to create great change in their feedback analysis, directing customer experience re-design, and providing lives. The first thing taught in NLP was digital strategy coaching. Jen has over body language, persuasion and how two decades of customer loyalty and to create deep unconscious connection process efficiency experience. A noted author, keynote speaker with others. After years of using these skills working with clients and talking and highly followed blogger in the them out of their problems and also multifamily industry, Jen has spoken teaching NLP Practitioner Certification at such events as the NAA Education trainings, a client asked her to put Conference, NAA Education Institute together a program for lawyers on (NAAEI), AIM: Apartment Internet how to pick a jury and persuade them Marketing, and the Multifamily Social based on body language. She very Media Summit. She has served as reluctantly said yes. Much to her sur- chair of the Service Quality Division prise, there was so much interest in the for the American Society for Quality program that she began presenting to (ASQ), and CallSource has named her all kinds groups across the country including sales teams and associations. Participants liked walking out of the presentation immediately Jen Piccotti, Senior Vice President ofwith Education and Consulting, SatisFacts Research Jen heads up persuasion client support for SatisFacts, developing dynamic, practical and effective usable andincluding body language educational programs and resources, conducting resident feedback analysis, directing customer skills and and gave program experience re-design, providing the digital strategy coaching. Jenrave has over two decades of customer loyalty and process efficiency experience. reviews. A noted author, keynote speaker and highly followed blogger in the multifamily industry, Jen has spoken at such events as thea NAA Education Conference, NAA Education Traci holds business degree fromInstitute (NAAEI), AIM: Apartment Internet Marketing, and the Multifamily Social Media Summit. She has served as chair University of the Service Quality Division for the American Society Quality the of Colorado andfor is a(ASQ), and CallSource has named her "quality assurance guru of multifamily." Previously, Jen was Quality Manager for Sheamaster Properties where she oversaw loyalty programs, productivity studies, process certified practitioner of Neuro improvement initiatives, QA training, customer surveys and organizational communication for Linguistics. both the multifamily and commercial divisions. Jen received her undergraduate degree from

"quality assurance guru of multifamily." Previously, Jen was Quality Manager for Shea Properties where she oversaw loyalty programs, productivity studies, process improvement initiatives, QA training, customer surveys and organizational communication for both the multifamily and commercial divisions. Jen received her undergraduate degree from Boise State University, and holds a Master of Science - Quality Assurance from California State University, Dominguez Hills. Join us at Ed-Con!!!

Class Session Two: 11:00 a.m. – 12:00 p.m. Room 405: Traci Brown Title: Body Language Confidential Reinvent the way you look at people and learn to interpret their body language. Develop the skills to quickly respond to hidden cues in any critical situation. In this fun, interactive and informative talk, you’ll learn how to read body language and use specific verbal language so that you can instantly create deeply connected relationships: • • • • •

Accelerate your networking Interview powerfully Increase sales Make anyone really comfortable around you Elegantly persuade others.

You’ll be able to recognize and appropriately respond to the hidden messages others are always sending and ensure that you’re sending the right message. You’ll be able to respond to once hidden clues so you can get the hidden messages and close the sale at the price you want. While diving into current events and celebrity body language playing Traci’s new game show segment, Body Language Blitz, you’ll compete against other audience members as you learn: • • •

The real meaning behind a handshake How to interpret body language and respond appropriately How to strategically use other’s body language so they’re open to you and your ideas

Room 406: Toni Blake Title: Closing In a Flash!...On the First Visit!! The days of closing a lease on the prospect’s first visit may seem like Superman’s Kryptonite, but in this class you’ll learn how to POWER UP and sign more leases at the initial visit. The rental housing market is as competitive as it’s ever been. Although we’re working harder for leases, if you have the right people, the right training, and the right attitude, Toni will help you develop a winning strategy, gain more confidence and know your prospects’ wants and needs. It’s all about getting that application and deposit!

Boise State University, and holds a Master of Science - Quality Assurance from California State University, Dominguez Hills.

Jen Piccotti

Jen Piccotti, Senior Vice President of Education and Consulting, SatisFacts Research Jen heads up client support for SatisFacts,

Rental Housing Journal On-Site • April 2015

RENTAL HOUSING JOURNAL ON-SITE

Legislative Update ...continued from page 11 also increase the number of people who would qualify for relocation assistance if a property is demolished or substantially remodeled. The House bill was amended and is still alive. The Senate bill is dead. WMFHA opposed this bill. • HB 1565 / SB 5378: Makes Source of Income a Protected Class: The title of the bills has been changed from previous versions but the effect is the same. They would make Section 8 voucher holders a protected class across the state. Both bills are dead for this session but may return next year. WMFHA opposed this bill. • HB 1278: Energy Benchmarking and Disclosure: This bill mandated an energy benchmarking requirement similar to the one in existence in Seattle. Property owners would be required to supply energy data using the EPA website. WMFHA opposed this bill. • HB 1824: Long Life Smoke Detectors. This bill required retailers to only sell “long life smoke detectors” beginning July 1, 2017. These detectors have a lithium battery that the supporters of the bill claim will last 10 years. The bill does not

impose any duties on owners or property managers although the language might change. WMFHA was monitoring this bill. • HB 1609 / SB 5846: Creates Exemptions to Plumbing and Electrical Codes. These bills would have eliminated the need for using a licensed electrician or plumber for minor repairs or modifications. The House bill is dead but the Senate version is still alive. WMFHA supported this bill. • SB 5185: Creates a 6-Year Timeframe for Substantial Building Code Amendments. The name of the bill says it all. WMFHA supported this bill. • SB 5218: Allowing Use of Unlawful Detainer for At-Will Tenancies. Added a new section to the unlawful detainer statutes (RCW 59.12) and would require a 30-day notice to terminate an at-will tenancy. The bill was amended to address concerns raised by tenant advocates. WMFHA supported this bill. • SB 5219: Allowing a 3-day Notice to Pay Rent to Include All Fees. This would allow a landlord to include late fees and other fees such as utilities in a 3-day notice to pay rent. The bill was amended to make clear that

a 3-day notice could only be used if rent and other charges were owing. A 3-day could not be used only for other charges. WMFHA supported this bill. • SB 5220: Allowing for Money Judgments Against Tenants After Alternate Service. Modifies existing statute regarding service of eviction lawsuits by posting and mailing. This would allow for a money judgment to be entered if the tenant answers and defends against the lawsuit. WMFHA supported this bill. • HB 1866 / SB 5259: Requires Landlords to Provide Voter Registration Information to Tenants. Created a new duty for landlords to provide voter registration information to new tenants at time of move-in. The House version is alive but the Senate version is dead. WMFHA opposed this bill. • HB 1929 / SB 5446: Requiring Electric Car Charging Stations: These bills would require local governments to offer incentives to developers and owners of new and existing multifamily properties for installation of charging stations for electric cars. Both bills are still alive. WMFHA was monitoring this bill.

To review any of these bills visit www.leg.wa.gov, select “Bill Search” tab and enter the bill number. In March, WMFHA staff and board members attended the annual National Apartment Association Capitol Conference, culminating in a Lobby Day in our nation’s capitol. WMFHA members met with our state’s members of Congress and their legislative aides to discuss federal issues of importance to our industry. These included Immigration Reform, Tax Reform and improvements to the Section 8 program. We also reminded our Congressmen and Congresswomen that the apartment industry is a robust $1.3 billion industry that helps today’s 37 million renters live in a home that’s right for them. Apartments are a vital housing resource, building communities by offering housing choice, supporting local small businesses, creating millions of jobs, serving families and residents by providing affordable housing options, and contributing to the fabric of communities across the country. There is historic growth in renter households in our state. That’s good news for Washington state. Meeting ...continued on page 17

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RENTAL HOUSING JOURNAL ON-SITE

Behind the Leasing Desk with Heather Blume Dear Heather, I've been in my current job for about 6 years now and can't seem to move any further up in my company than the role of a property manager. I think I'm good at my workwand my employees seem to like me, but when the opportunity to move up happens, my regional always seems to find someone "better qualified." I don't want to have to leave my current company, but I feel like I've earned a promotion and I'm getting a little burned out where I am now. What should I do? -Looking for a Ladder

directly to your regional manager about this yet? So many times, the real problem is that we don't know what other people are thinking or wanting, and so we can't meet their needs. Everything past this point in my reply is based on speculation and experience, so take it for what it's worth. As a former hiring manager, one of the things I can tell you is that why you're being passed over could be due to a number of reasons. Perhaps, as you've been with your company for a while, paying you to do a higher end job would be more expensive to the payroll right now, and for many companies, they just cannot afford to pay the internal promotion 5 or 6 thousand more a year than they would have to pay an external new hire. Another reason you may not be getting moved up is that there's no one who can fill your shoes. If you are very good at your job, then it's hard for a regional manager to take the risk of someone new behind your desk who might not be able to do the job as well as you can. In the current

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Dear Looking for a Ladder, I think that it shows a lot of dedication to your company that you have stayed with them for 6 years. In the world of property management, that's a couple of lifetimes for some of us. It can be a very difficult experience for many of us to be passed over for promotions we think we have earned, so I want you to know what you're going through is incredibly common. My first real question to you is, have you talked

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market, occupancy is EVERYTHING, and if you've got it, that's not a gamble most regionals will take. The good news is that if this is the reason, then you've got a clock on the obstacle, since the economy is bound to improve AND you w can mentor up your current assistant manager so that he or she could step in to your shoes more quickly. Also, your regional manager might not yet see the skill set in you to move you up in the company. One of the easiest ways to get noticed and move up is to either volunteer for new projects that you have a skill set well suited for or to set public goals and meet them. Both are actions that regional managers respect and respond well to. Step up to the plate and mentor the younger managers in the company, or offer your marketing talents to sister properties that are maybe not having as good a run in the current market as you are. If you've found a company that you like, I encourage you to talk with your upper management. After all, there is a reason you're still work-

ing for them after 6 years, and from their point of view, they have a lot of time and energy invested in you. Ask your manager for a clear path of what it's going to take for you to move up with the company and then formulate your goals around that path. It's hard not to admire people who are willing to do what it takes to get the job done. Don't let your burnout get the better of you and your temper. Open up your communication with your regional manager and find a new way to love your job until you can ascend within the ranks of your company!

DO YOU HAVE A “BACKUP” PLAN? Good Luck! Heather Frustrated with Fibbing

Dear Heather, At our property, we are asked to do weekly shops of our competing properties. I'm supposed to call them and get how much they are renting all of their apartments for, if they have any specials, ...continued on page 19

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Rental Housing Journal On-Site • April 2015

RENTAL HOUSING JOURNAL ON-SITE

Market Trends Puget Sound ...continued from front page Apartment Vacancy Report. The survey ended on Friday, March 20th. We proofed the data on Saturday and published the report online on Sunday. We survey the entire market and collected reliable information for 232,071 units in 2,254 properties. That’s 88% of the market.

Rent Growth Slowing The rate of rent growth has slowed a little. Rents rose 2.6% in the region since September and are 7.4% higher than they were a year ago. But properties didn’t really raise their rents that much. One thing to be careful of now is the impact of new construction on rents. New units rent for more, distorting rent trends. We call this the skew of the new. New construction costs more and typically gets a rent premium of more than 40%. This rent premium has not mattered much in most of the past dozen years because there has not been a lot of new construction. But right now, with all the new construction opening up this year and next year, the higher rents in new units will create an inflated rent trend. For example, although the overall average rent rose 7.4% in the region over the past 12 months and 2.6% in the past six months, when you exclude the new units that opened this year and last year, rents rose 5.7% and 1.9% respectively. And we’re just beginning to see the distortion that new construction will create. Another thing to consider is the relationship between rents and expenses. Our latest Apartment Expense Report found that total expenses rose 6.3% last year. That’s a little faster than the rent

growth we’re seeing right now. Demand continues to keep up with supply, almost. Developers opened 8,919 units in the past 12 months and the market added 8,632 new renter households in the same period. Is that perfect timing or what? You can thank a strong local economy for that. Conway Pedersen Economics just reported our region added 56,000 jobs last year and they expect another 51,000 new jobs this year. Another positive trend has been in-migration to the region. While not exactly a measure of inmigration, driver license data is close to a “real time” substitute. The number of people in this region who turned in out-of-state licenses is up 21% in the past 12 months compared to the previous 12 months.

Expect Softening Due To New Construction But investors should expect the market to soften soon. Developers will open 12,000 units this year. And they’re not done. We are counting another 11,000 units developers plan to open in 2016 followed by even more in 2017. We are tracking a total of just over 48,000 units developers plan to open between 2015 and 2019. They probably won’t all happen, at least not as scheduled. There will be delays and some projects may get shelved. Even so, we’re looking at a lot of new units. Can demand keep up with all this new supply? The honest answer is, who knows. In the past five years new demand averaged just over 6,000 units a year. That won’t work. But keep in mind that developers didn’t build a lot in the past five years, averaging only 5,400 units a year. It’s kind of hard to create demand for something

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that isn’t there. Looking back a little farther, demand averaged just over 11,000 units a year between 1986 and 1990. It doesn’t look like developers will set a new all-time record for annual production in the region. But that’s not the case in Seattle. Development hit a record level in 2013 and then topped it last year. We expect that record to be broken again this year and this year’s record to be broken next year.

Last fall 72% of the survey respondents told us they planned to increase rents. Those increases would have resulted in rents increasing 2.8% in the region by this March. Excluding the rent increase distortion created by new construction, they actually increased rents 1.9%. Now they are telling us they plan to raise rents 3.1% by September. Only one out of every seven properties we surveyed offer concessions, averaging $744. That’s not a lot of properties offering concessions. But the size of concessions is growing. They averaged $580 a year ago and $480 the year before that. We expect the use and size of concessions will grow significantly over the next six to twelve months. Almost 80% of the properties surveyed pass through water and sewer charges to residents. Most of those also pass through garbage costs. More than half the properties include at least one parking space in the rent. Paid parking rates have not changed much since last fall. For example, garage parking averages $109 a month, up from $107 in September. Parking is likely to become a more valuable commodity though, since new construction is putting in an average of less than one parking space per unit. Mike Scott (206) 935-3458 mike@duprescott.com

Legislative Update ...continued from page 15 that demand will create thousands of jobs. To get there, we need new public policies that support the multifamily housing industry and that don’t make it harder for renters and their families to find the housing that makes sense for them and their community. In the state of Washington, there are 870,000 apartment residents in 490,000 apartment homes, creating an economic contribution of $20 billion and supporting 198,000 jobs. Job growth in this state has rebounded from the recession years, unleashing pent up demand for housing. In-migration from outside the state has dramatically increased in the last 12 months. This adds to demand for apartments. When demand exceeds supply, prices increase. When supply exceeds demand, prices decrease. Rents are going up due to forces of supply and demand. Poor public policy would be to impose artificial, government

imposed constraints on those market forces, which would result in eroding housing affordability, not enhancing housing affordability. We want to thank all of our members whose grassroots efforts to advocate for our industry are crucial to our success and our ability to serve others. For non-members considering joining WMFHA, take advantage of our current Membership Drive Campaign, with discounts on membership dues for new members. Call us today at 425-656-9077 to learn more about how to get involved and take advantage of the value of membership in our association, or visit our website at www.wmfha.org today. Thank you to all who make our association strong, vibrant and caring.

RENTAL HOUSING JOURNAL ON-SITE

Rental Boom is Boon to Seattle Economy, Contributing $15.5B Locally in 2013 Fueled by Demographic Changes, Growing Millennial Population, Rediscovery of Urban Cores, People are Increasingly Drawn to Apartment Living Washington, D.C.

he apartment industry emerged as one of the strongest sectors coming out of the Great Recession, and a new study shows just how much the Seattle economy benefited from the rental boom. In 2013 – the latest numbers available – apartment construction, operations and resident spending contributed $15.5 billion locally and supported more than 146,700 jobs in the metro area. The economic data are part of new research commissioned by the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA), which looks at dollars and jobs from apartment construction, operations and resident spending, nationally, by state and in 40 specific metro areas, including Seattle. The data, based on research by economist Stephen S. Fuller, Ph.D., of George Mason University’s Center for Regional Analysis, are available on the web-

site www.WeAreApartments.org. Nationally, the apartment industry and its 36 million residents contributed an impressive $1.3 trillion to the U.S. economy, supporting 12.3 million jobs across the U.S. in 2013. The study showed that in the Seattle metro area: • The local economic contribution from the apartment industry totaled $15.5 billion, supporting 146,800 jobs. • The economic contribution of local apartment construction totaled $2.3 billion. • The economic contribution of local apartment operations totaled $2.2 billion. • Apartment construction and operations supported $1.5 billion in personal earnings for local workers. • Renter spending in the Seattle metro area contributed $11.0 billion to the local economy.

• The total economic contribution of the apartment industry and its residents in Washington State totaled $20.7 billion and supported 198,000 jobs. "Seattle has a favorable economic environment and a high quality of life, which continues to attract highly educated Millennial apartment renters to the city’s dense urban downtown. Apartment construction remains heaviest within Seattle’s Capitol Hill, University, Ballard and Belltown neighborhoods, which are popular for their walkability and high concentration of area employers," said Jim Wiard, Executive Director of the Washington MultiFamily Housing Association. "The rental boon – both locally and nationally – has been fueled by demographic changes like the growing Millennial population and a rediscovery of metropolitan urban cores." "Here in Seattle, we're feeling the positive economic impact of the booming apartment industry, which

is helping our city thrive," Wiard explained. "The great news about the apartment industry is that the dollars and jobs don’t end with construction. The ongoing operations and resident spending make each apartment community an economic engine, supporting local jobs and making a positive economic impact in our area – and in towns across the country." "Our study showed major increases around apartment construction, with construction spending, economic contributions and personal earnings all rising substantially,” said Fuller. “The construction for multifamily apartment buildings is a significant and growing source of economic activity, jobs and personal earnings in communities nationwide." "According to our study findings, apartment construction has been on the rise over the past five years. In 2009, during the economic recession, there were only 97,000 construction starts, which was the lowest level ...continued on page 19

Rental Housing Journal On-Site • April 2015

RENTAL HOUSING JOURNAL ON-SITE

Boom is Boom ...continued from page 18 since records began in 1964. In comparison, there were 294,000 construction starts in 2013 – a significant increase," said NAA Chairman Tom Beaton, Senior Vice President, Management, The Dolben Co. "The most visible sign of the rental resurgence – apartment construction – is on the rise, contributing $93 billion to the national economy in 2013, resulting in $30 billion going directly into the paychecks of more than 700,000 workers," said NMHC Chairman Daryl Carter, CEO of Avanath Capital Management. “Besides all the dollars and jobs, the increase of available apartments will also help address affordability chal-

lenges that we see in many markets across the U.S.” In conjunction with the study’s release, the website www. WeAreApartments.org breaks down the data by each state and 40 key metro areas. Visitors can also use the Apartment Community Estimator – or ACE – a tool that allows users to enter the number of apartment homes of an existing or proposed community to determine the potential economic impact within a particular state or metro area. For more information, visit www. WeAreApartments.org/metro/seattle.

The Washington Multi-Family Housing Association is the Washington State chapter of the National Apartment Association. WMFHA is a collection of more than 80 Property Management companies, over 820 Apartment Communities, representing more than 140,000 apartment homes, with 170 service suppliers working together to promote and enrich the multifamily housing industry in Washington State. For more information please visit www.wmfha.org.

behalf of America's apartment industry. Drawing on the knowledge and policy expertise of staff in Washington, D.C., as well as the advocacy power of 170 NAA state and local affiliated associations, NAA and NMHC provide a single voice for developers, owners and operators of multifamily rental housing. Today, more than one-third of Americans rent their housing and 37 million people live in an apartment home. For more information, please visit www.nmhc.org or www.naahq. org.

For more than 20 years, the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA) have partnered on

Leasing Desk ...continued from page 16 what their traffic has been like, and what their current occupancy is. For 2 of my comps, this is really easy and they're really nice to me. 1 of the other ones never answers their phone, but sometimes if I fax them our sheet, they will return it. The other 2 flat out refuse to give us any information or they lie to us about their stuff, even though we are willing to give them ours and we're always honest. One weekend, the bigger one was doing a free 47 Inch TV with a new lease, and we didn't know about it! How can I get those two properties to

give me the information I need? -Frustrated with Fibbing Dear Frustrated with Fibbing, This is a song that we hear all too often! Kudos to you on actually doing your weekly market survey/ comp shops, since so many leasing consultants don't. Your dedication to being armed with the right information is commendable! Early in my career, I had a property that refused to work with me on my comp shops. I was annoyed with

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them, and indeed, over time I became annoyed with the whole market survey process. No matter what, every week, my surveys were incomplete because I could NOT get information from this one property. Finally, I got so frustrated that I went over there one day on my day off, scones and Starbucks in hand, and asked them why they wouldn't give me any information. When they couldn't give me a real reason (because I knew that bunk about it being "company policy" was just that - bunk), I asked them if they had any one bedroom apartments open. The leasing consultant hesitantly told me that, yes they did, and I told her I sure wished I had known that because I would have loved to send her a couple I had to turn away the day before, as my property didn't have any open one bedroom apartments. I left her my card, the Starbucks and scones, and wished them a good week. The next week when I called, they gave me the information I was looking for, because I had shown them that I could be an ally, not just an adversary. My advice to you is this: Build bridges with these people. Reach out to them on a personal level and a professional level, and even though they swat you away a few times, be

persistent. If that doesn't work, I encourage you to use the tools at your disposal by searching Craigslist for open units with their phone number. If nothing more, you'll be able to gain prices and potential specials from their postings. But before you take the sneaky route, try the more honorable method of just building the relationship. I promise you, it will yield rewards even greater than the information you're seeking now. Best of Luck, Heather

Heather is the Imagination In Charge of Behind the Leasing Desk Training & Consulting Services out of Seattle, WA. An accomplished national speaker, trainer, consultant, career coach, and author of both books as well as countless industry related articles, Heather holds her CAS designation, is NAA Advanced Instructor trained, and has been a member of the NAA Faculty since 2009, serving as a WMFHA, CAM, and NALP instructor since 2009. You can check out more of her musings, podcasts, and class offerings at www.behindtheleasingdesk.com

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RENTAL HOUSING JOURNAL ON-SITE

Section 8 and Voucher ...continued from page 8 They found a woman with two children to rent it. “The Section 8 people offered to pay us $1,600 a month for this property, which is about $300 more than it’s worth”, the manager told me. “After my client pays the monthly expenses – the mortgage, maintenance, and taxes – we are netting more than 12% on this investment. That’s a nice return in today’s world”. “Is there a catch?” I asked disbelievingly? “What if the resident didn’t pay her rent?” The manager explained that Section 8 guarantees about 75% of

the monthly rent.” So, as she informed me, even if the resident doesn’t pay, the government still deposits $1,200 into their account, no questions asked. The resident is responsible for the remaining $400. But there’s no reason for the landlord to worry about their renter’s $400 payments. The local Public Housing Agency make sure she pays her part. They act as “the enforcers”. The owners don’t even worry about her making payments on time; because the local agency handles that challenge also. Then I asked what would happen if she and her

children trashed the place? I was told that the local officials dutifully inspect the house and make sure it stays in good condition. In effect, they do the work of a property manager, free of charge. The owner-client still wanted a property manager to be their “liaison” between them and the local agency. But since the property manager hardly needed to do anything they negotiated a lower fee then the standard 10% of the rent normally paid to a property manager. When the lease expires, if the resident leaves, the government finds another resident to take her place – on the same terms, which saves the property manager and the owner that responsibility. The best part was that it’s all guaranteed and support-

ed by the federal government. Everyone including the resident came out ahead. Remember, public housing is limited to low-income families and individuals. The family or individual’s income cannot exceed 50% of the median income for the area. There are strict guidelines that owners and tenants must follow to be eligible to participate in these kinds of program. For specific details, contact your local Public Housing Agency. from PropertyManager.com a Service of AppFolio

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Rental Housing Journal On-Site • April 2015

RENTAL HOUSING JOURNAL ON-SITE

Secret Shopper ...continued from page 5 member encounters a prospective resident, the maintenance person at the very least could extend a warm, friendly greeting. The visitor could be made comfortable and offered refreshments, if available, and be given a brochure to look at while he or she is waiting. If a guest card or visitor log is available, the maintenance person could request that it be filled out. Then, if the wait time becomes excessive and the prospective resident has to go, there will

be a record of the visit, and a way to follow up. Office personnel can provide this same type of support to their maintenance team, when they are busy turning apartments and handling service requests. Every person working in the office should know how to operate a plunger and an Allen wrench. Leasing team members must also be willing to pass out flyers, pick up litter, sweep sidewalks, maintain common areas, etc. If you

are constantly paging maintenance to pass out your lease renewal letters or handle minor messes around your community, then you are delaying the make ready process, as well as prompt service to your residents. REMEMBER: Being part of a team means doing whatever it takes to get the job done; whether it’s your job or not! If you are interested in leasing training or have a question or concern that you would like

to see addressed, please reach out to me via e-mail. Otherwise, please contact Jancyn for your employee evaluation needs: www.jancyn. com ASK THE SECRET SHOPPER Provided by: Joyce (Kirby) Bica Former owner of Shoptalk Service Evaluations Consultant to Jancyn Evaluation Shops Phone: 425-424-8870 E-mail: shptalk2@gmail.com

Feeling the Squeeze ...continued from page 5 es, especially for the timing of family buying patterns. Median price measurement reflects the types of homes that are selling during the quarter and can be skewed at times by changes in the sales mix. For example, changes in the level of distressed sales, which are heavily discounted, can vary notably in given markets and may affect percentage comparisons. Annual price measures generally smooth out any quarterly swings. NAR began tracking of metropolitan area median single-family home prices in 1979; the metro area condo price series dates back to 1989. Because there is a concentration of

condos in high-cost metro areas, the national median condo price often is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes. As the reporting sample expands in the future, additional areas will be included in the condo price report. 1Areas are generally metropolitan statistical areas as defined by the U.S. Office of Management and Budget. NAR adheres to the OMB definitions, although in some areas an exact match is not possible from the available data. A list of counties included in

MSA definitions is available at: http://www.census.gov/population/estimates/metro-city/ List4.txt. 2According to the U.S. Bureau of Labor Statistics, actual market rents paid by individuals who do not own the home they live in rose by 3.4 percent in January from January 2014 – the 10th consecutive month of growth above 3 percent. 3The median existing-home price for all housing types in January was $199,600, which is 6.2 percent above January 2014. 4According to U.S. Census Bureau data from 2008-2014.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the "News, Blogs and Videos" tab on the website. Statistical data in this release, as well as other tables and surveys, are posted in the "Research and Statistics" tab. Photo - http://photos.prnewswire. com/prnh/20150210/174672 Logo - http://photos.prnewswire. com/prnh/20150210/174673LOGO

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Rental Housing Journal On-Site • April 2015

RENTAL HOUSING JOURNAL ON-SITE

Student Loan Debt Affects Real Estate Investments in a Big Way By Clifford A. Hockley, President Bluestone & Hockley Real Estate Services

ally did everything right. She was accepted into her first choice college and received a first rate education to pursue her dream career. She filled out the student loan applications like everyone told her to; after all, she couldn’t afford the $90,000 degree without it. When she graduated, she started out

entry level in her chosen field, making near minimum wage which just covered her rent (with three roommates) and living expenses. She deferred payment on her student loans for 2 years but after watching the interest inflate her debt up to $170,000 she had to move back in with her parents to concentrate on

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paying it off before it got any worse. Then her boyfriend proposed to her. He talked about wanting to buy a house and have a family, the whole American dream, but though he knew she lived with her parents in order to pay off her student loans, he didn’t know the extent of her situation. She knew her debt would make buying a house impossible, so she called her loan provider to see if she could get her interest reduced. They said no, she already had .25 for direct deposit taken. Her interest was 8%. She could barely make the minimum required monthly payment to take care of the interest let alone get down to the principal. Worst of all, when she told her fiancé this, he withdrew his offer; he didn’t want her bad debt ruining his good credit. According the National Association of Consumer Bankruptcy Attorneys, seven out of ten college seniors who graduated in 2012 had student loan debt, with an average of $29,400 per borrower. Currently 29 million of 86 million Americans aged 20 – 39 have some level of student debt, which translates into 16.8

million households. Because federal law treats student debt as non-dischargeable in bankruptcy proceedings, borrowers can be burdened with this debt for a lifetime even if circumstances make it unlikely that the borrower will ever be able to repay. Asking nicely won’t make it go away. How does this affect real estate investors? In a 2014 blog post, Rick Palcios Jr. and Ali Wolf of John Burns Real Estate Consulting, LLC, estimated that 414,000 real estate transactions would be lost in 2014 due to student debt. At a typical sales price of $200,000 for an entry level home, they calculated that out to $83 billion in lost sales volume or 8% of the total marketplace demand. (8% of 20 -29 year olds usually buy a home each year, which would be equal to 1.35 million transactions a year.) They calculated that 5.9 million households under the age of 40 pay over $250 a month in student loans as compared to 2.2 million in 2005. As a percentage, that is from 22% in 2005 to 35% in 2014. In that same ...continued on page 23

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Rental Housing Journal On-Site • April 2015

RENTAL HOUSING JOURNAL ON-SITE

Student Loan Debt ...continued from page 22 eleven year timeframe, student debt increased from 241 billion to between $1.1 and $1.2 trillion dollars, which is even greater than current credit card debt. That basically means that those that sought shelter in the halls of academia during the economic downturn, often have no way to pay it back. Even with a college education and a decent job, some of these college graduates live with as much expendable income as those under the poverty line since all their wages go to living expenses and to pay down their student debt. We know that home builders are selling fewer homes. As investors, we want to know how long this will go on and how this will impact the demand for alternate living arrangements. Bear in mind The percentage of students who cannot pay their student loans have a huge impact on American society and economic growth: • They can’t afford to buy a car, and their credit may be too bad to finance one. • They are hesitant to marry, because they don’t want to assume liability for unpaid student loan debt or they don’t want their future spouse and household to be burdened by the debt.

• They are hesitant to have children, because they can’t afford to raise them or put them through school. (The last thing they want is to have their children pay their student loan debt as well.) • They are putting off medical care because they don’t have the money to pay the deductibles or even afford insurance premiums. • They can’t buy a house, not only is their credit bad but they cannot afford the house payments, not to mention the down payment required to close.

As they move to potentially lower rent apartments in the suburbs, their peers without student loan debt will be buying homes and home builders will see some increased demand. Another option for the future would be to encourage the federal government and Sallie Mae, (one of the major holders of student loan debt,) to refinance loans at lower interest rates and to forgive late penalties and interest rate hikes since, as they say, you can’t squeeze water from a stone. Credit unions are showing some interest in helping the Y generation

recapitalize their debt, but they are very cautious, and should be given that many of these student loans are delinquent and their holders have low credit scores. If the Y generation can refinance this debt, then the opportunity exists that within 5 – 7 years a new cohort of buyers might end up in the housing marketplace. In the meantime the members of this debt-ridden generation are renting apartments and houses together, fueling the apartment building boom.

Where does this take us? We have already seen a boom in apartment construction. It is estimated that this boom will continue through 2015 as young people continue to move in together to save money. Many of those tenants don’t have a car and want to live in the downtown of a large city where they can walk or bike everywhere they need to go. At some point, high downtown rents will force those with student loan debt out of the city center, because the rents needed to fund new construction will not be affordable. The Y generation will then need a car, a small used car with high gas mileage, or find a place with easy access to public transportation.

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Rental Housing Journal On-Site • April 2015

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