Rental Housing Journal On-Site July 2017

Rental Housing Journal On-Site

July 2017

3. Rent Stable At Mid-Year New Report Says 4. South Seattle Apartments Sell For $109 Million 5. Seattle Property Management Firm Integrated Into Security Properties 6. Buy vs. Rent Index Shows Rising Prices and Mortgage Rates Moving Housing Markets in the Direction of Renting

7. The 10 U.S. Cities Where The Cost Of Living Is Rising Fastest 8. Dear Maintenance Men - Faucets, Storage and Vacancies 9. New Seattle Laws Affecting Apartments 13. Job Gains And Household Growth Provide Positive Outlook For U.S. Housing Market

14.71 Percent of Homeowners Believe It's a Good Time to Sell 16. Who Is Gen Z? Attracting the Next Generation of Renters 17.Multifamily Employee and Resident Satisfaction Are Tied Together Study Says 18.First Half of 2017 Ends with Record Sales 23.3 Property Managers Share Their Secrets to Success

www.rentalhousingjournal.com • Professional Publishing, Inc 17,000 Papers Mailed Monthly To Puget Sound Apartment Owners, Property Managers & Maintenance Personnel Published in association with Washington Association, IREM & Washington Multifamily Housing Association

Why Is The Internet So Bad In Apartment Complexes?

Fewer Renters Think It Is A Good Time To Buy A Home

By The Editors

A

new survey shows fewer renters think it is a good time to buy a home and they are not optimistic about the economy and their personal financial situation, according to a release.

The National Association of Realtors (NAR) released the new quarterly Housing Opportunities and Market Experience survey showing how the morale of renters about buying a home has declined.

"Paying more in rent each year and seeing home prices outpace their incomes is discouraging, and it's unfortunately pushing home ownership further away — especially for those

Can A Multifamily Internet System With WiFi Installation Be The Ticket?

A

continued on page 11

Top 3 Biggest Stressors For Property Owners and Managers in 2017

By John Triplettt

I

n a new survey of 700 rental property owners across the country, maintenance repairs and replacement continues to be the biggest stressor overall for property owners and managers, according to Buildium.com.

Overall 61% of respondents reported maintenance and repairs as stressful, compared to 62% last year, according to the survey.

“It is clear property owners are struggling with both maintenance and tenant management,” Darcy Jacobsen, content manager at Buildium.com said during the webinar about the property owners perspective survey.

“If you are an owner and you are struggling with these issues you are not alone.

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By Hart Steen n Educational Series for Apartment Owners Part 1 "Modem Service" A busy, always connected lifestyle demands the Internet. So much so the FCC, in a 2016 ruling, deemed the Internet a utility and it will be regulated as such. Regardless of government policy, the fact remains, access and experience are extremely important to consumers. Internet, as a utility, is an important distinction in today’s marketplace. Most Internet users experience a “Dirty City Water” Internet experience because it’s poorly maintained and rarely managed by monopolistic Internet Service providers (ISP’s ) – leaving a bad taste in the consumer’s mouth. Most agree the continued on page 20

“If you are a property manager these are things you might want to bring up when you are trying to win more business, or emphasize in your marketing materials, or when you are talking to owners,” Jacobson said.

Top 3 biggest stressors for property owners and managers 1. Maintenance, repairs and replacements 2. Dealing with problem tenants 3. Finding and keeping good tenants Dealing with problem tenants now No. 2 While maintenance scored as the top stressor, three out of owners’ four continued on page 12

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Rental Housing Journal On-Site · July 2017

Rental Housing Journal On-Site

Rents Stable At Mid-Year New Report Says Cities where rents rose the most in the first half of 2017 according to Abodo.com

By The Editors

R

ents were relatively stable through the first six months of 2017, according to a new report.

While the national median rent fluctuated, but it ended up exactly where it began at $1,016 for a one-bedroom, according to Abodo.com.

Prices fell from January to March, bottoming out at $1,003 before creeping back up in the spring. In all, the national median rent always stayed within 1.3% of its starting value.

"Mid-year rent trends are an important metric to follow when analyzing the rental market across the U.S. And while San Francisco and New York City stand at the top of the most expensive rental market rankings, as usual, it's important to analyze the average monthly change on the coasts and in the Midwest," said Sam Radbil, senior communications manager for Abodo.com

Seattle still an exception Eight of the top 10 cities for rental hikes were in the Southwest or South.

The only geographic outliers were Seattle, WA, which saw rents rise an

average of 3.6% over the first half of the year, and Honolulu, HI, at 2.6%.

"On the West Coast, cities like Phoenix, Seattle and Glendale all ranked in the top-ten for the biggest increases in rent price for a 1-bedroom apartment for the first half of 2017. On the other end of the spectrum, San Jose and Colorado Springs ranked in the top-ten for the biggest decreases in rent price," Radbil said.

"When taking a more detailed look at the West Coast, our research shows that San Francisco, San Jose, Los Angeles, Oakland, Seattle, Santa Ana, San Diego, Long Beach, Portland and Denver all appear in the top-20 for the most expensive rental markets in the country," he said.

Topping the list was New Orleans 6.3% and an average rent of $1,167, followed by Glendale, Arizona in the Phoenix metro area at 4.7% and an average rent of $764. Others in the top 10 for rents increases were: • Houston, TX • Reno, NV • Atlanta, GA

• • •

Miami, FL Phoenix, AZ Lexington, KY

High rents cities largely unchanged The cities with the highest rents are largely unchanged since last month’s report.

San Francisco rents dropped $40 to $3,240, but that wasn’t enough to bump the city from its spot atop the rankings.

As usual, New York City ($2,913) and San Jose ($2,378) rounded out the top three. The only real movement in the list of the country’s highest rents was near the bottom: Chicago ($1,861) superseded Miami ($1,855) for eighth place.

Rents rising in half of the states Rents are rising in just over half of the nation’s states, and certain cities are seeing sustained increases in rent month to month, according to the Abodo.com mid-year report.

Cities where rent was already high — New York, D.C., Los Angeles — are still high, but the most notable rental increases are in growing markets in the

South and Southwest, “a continuation of a trend we noticed in our 2016 Annual Report,” the report says.

In the next six months, rental prices in those markets will be a good barometer for how well new development is keeping up with what appears to be continued — and rising — demand for rentals.

There has been concern that with new apartment inventory coming onto the market in many cities, that either rents would decline or vacancies would increase.

About Abodo.com ABODO creates first-of-their-kind, localized rental marketplaces for underserved, tier two U.S. cities Each month, using over one million ABODO listings across the United States, we calculate the median 1-bedroom rent price by city, state, and nation and track the monthover-month percent change. For this report, we analyzed data for the first six months of 2017 and found the average of the monthly percent changes in list price separately for each state and city. We also calculated the 2017 average list price in each state by taking the average of all monthly median list prices.

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Rental Housing Journal On-Site

By The Editors

A

South Seattle Apartments Sell For $109 Million

south Seattle 576-unit multifamily property, apartments that were acquired for $58 million in 2014, has sold for $109 million, according to a release.

Rock Creek Landing, a wholly-owned 576-unit multifamily property in Kent, Washington, was sold by Kennedy Wilson, a global real estate investment company. The cash proceeds of $73 million from this transaction were used to fund the previously announced acquisition of 90 East, an office campus in greater Bellevue.

“This sale demonstrates our ability to leverage our vertically integrated investment platform to identify undermanaged investments where we can create value through the execution of our asset management program,” Shem Streeter, Managing Director of Kennedy Wilson Multifamily Investments, said in the release.

“With an abundance of older multifamily housing stock in our target markets, we look to continue replicating our value-add asset management strategy on new investment opportunities,” he said.

Rock Creek Landing was acquired in 2014 for $58 million as part of a three-property 1,212-unit multifamily portfolio located across the southern submarkets of Seattle and acquired for $127 million.

After acquisition, Kennedy Wilson invested an additional $6 million in completing its value-add asset management program, including upgrades to the leasing center, interior renovations, common area improvements, and other property enhancements, according to the release.

Grew apartments net operating income by 56 percent During its ownership period, the net operating income of the property grew by 56 percent to $5.3 million. Through the disposition of Rock Creek Landing and the acquisition of 90 East, the company expects to add an incremental $7 million of annual recurring net operating income.

Kennedy Wilson maintains a large presence in the State of Washington with an ownership interest in 1.4 million commercial square feet and over 9,700 multifamily units.

About Kennedy Wilson Kennedy Wilson (NYSE:KW) is a global real estate investment company. We own, operate, and invest in real estate both on our own and through our investment management platform. We focus on multifamily and commercial properties located in the Western U.S., UK, Ireland, Spain, Italy and Japan. To complement

our investment business, the Company also provides real estate services primarily to financial services clients. For further information on Kennedy Wilson, please visit www.kennedywilson.com.

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Rental Housing Journal On-Site · July 2017

Rental Housing Journal On-Site

Seattle Property Management Firm Integrated Into Security Properties

By The Editors property management platform," David Dufenhorst, CEO of Security Properties, said in the release.

Property management firm will continue work for Security Properties As Security Properties Residential, the firm's existing 426 employees will continue to provide residential management services for Security Properties residents, its high-net worth investors, and its institutional real estate partners and lenders.

Madrona Ridge was created in 2010, after a 15 year non-compete related to the sale by Security Properties of its prior management company expired.

Its purpose is to increase the value of its real estate holdings by more closely managing its assets.

M

adrona Ridge Residential, a property management firm and affiliate of Seattlebased Security Properties, is being fully integrated into Security Properties and rebranded as Security Properties Residential, according to a release.

As part of this integration, Security Properties is also announcing that

Mike Voorhees, formerly of Holland Residential and Holland Partner Group, has recently joined Security Properties Residential as President.

"We are very fortunate to have found Mike Voorhees, who is clearly a cultural match for us, especially with his deep skills and experience. We look forward to Mike's leadership in growing our

Mike Voohees "I look forward to building on the talent, experience and systems that have allowed Security Properties Residential to reach the point where it is today and to help expand the platform to serve the needs of our residents, partners and investors," Voorhees said in the release.

Operating throughout the Western U.S., Security Properties Residential services include property, construction and compliance management

services “that create positive living environments for residents and build value for investment clients,” according to the release.

Under this new organization, Security Properties Residential will have a unified brand and organization, and will be further integrated with the Security Properties platform to enhance coordination and risk management.

About Security Properties Security Properties is a national real estate investment, development, and operating company headquartered in Seattle, Washington.

For nearly 50 years, Security Properties has provided quality housing to its residents as well as excellent financial performance for its investors. Since its founding, Security Properties has acquired or developed over 81,600 residential units at a cost of over $5 billion. Security Properties maintains a focused multi-family strategy supported by integrated teams of professional acquisition, development, construction, investment, and property management specialists. For more information, visit www. securityproperties.com

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YOUR SCREENING SOLUTION  Learn more about your tenant screening options at: RHAwa.org | Products + Services | Tenant Screening *RHAWA’s Tenant Screening department does its due diligence to make sure that its in compliance with any mandated regulations. Must have an active RHAWA membership and be Full Credit Certified.

Rental Housing Journal On-Site · July 2017

5

Rental Housing Journal On-Site

Buy vs. Rent Index Shows Rising Prices and Mortgage Rates Moving Housing Markets in the Direction of Renting

By Florida Atlantic University College of Business

S

lowing rents coupled with rising home prices and mortgage rates are pushing many housing markets in the U.S. into rent territory, according to the latest national index produced by Florida Atlantic University and Florida International University faculty.

"The major drivers for this quarter's scores appear to be slowing rents relative to the costs of ownership and climbing mortgage rates," said Ken Johnson, Ph.D., a real estate economist and one of the index's creators in FAU's College of Business. "Thus, on the margin, more potential owners should favor renting and reinvesting in a portfolio of stocks and bonds as opposed to ownership.

This shift should slightly lower the demand for ownership and contribute to the slowdown in housing prices."

Based on numbers from the end of the first quarter of 2017, the latest Beracha, Hardin & Johnson Buy vs.

Rent (BH&J) Index follows recent S&P/ Case-Shiller 20-City Home Price Index

scores, which find an average annual increase in home prices of 5.78 percent, suggesting that prices, while increasing, are slowing.

"Higher BH&J scores favor renting over ownership in terms of wealth accumulation," said Eli Beracha, Ph.D., co-creator of the index and assistant professor in the T&S Hollo School of Real Estate at FIU. "All of this upward pressure in the tradeoff between renting and buying should serve, in general, to slow property price appreciation around most of the country."

The latest BH&J scores show 11 of 23 cities in the index remain in buy territory. Another nine cities hover around a BH&J score of zero, suggesting a tossup between buying and renting in terms of wealth accumulation.

Many metro markets, including Chicago, Cincinnati and Cleveland, among others, remain soundly in favor of ownership. The remaining three metro areas (Dallas, Denver and

Houston) are in heretofore unseen territory in terms of both pricing and BH&J scores.

"Interestingly, housing price appreciation continues to increase at a double-digit pace in both Dallas and Denver in the face of increasing BH&J scores," Johnson said. "However, in Houston, annual property price increases have slowed to 4.4 percent, seemingly in response to conditions that favor renting and reinvesting over buying."

The BH&J Index and other FAU real estate activities are sponsored by Investments Limited of Boca Raton.

SOURCE Florida Atlantic University College of Business http://fau.edu

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Rental Housing Journal On-Site · July 2017

Rental Housing Journal On-Site

The 10 U.S. Cities Where The Cost Of Living Is Rising Fastest

By GOBankingRates

A

merican household debt totaled a record $12.73 trillion as of March 2017, so cost of living concerns are more pertinent than ever.

Personal finance news and features website GOBankingRates conducted a study to identify which cities across America have seen the largest increase in cost of living expenses from 2016 to 2017. The study evaluated U.S. cities based on two principal metrics: • The increase in a city's cost of living index, which includes food, rent, utilities and transportation.

(out of a total 100) and the amount of income required to live comfortably had also risen. Combining these two metrics provides both the objective and more subjective side of cost of living expenses. Most cost of living indices do not account for the ability to save or pay for unnecessary purchases, and yet they're both important parts of people's financial lives.

For full study results and more details on methodology, visit: The 10 U.S. Cities Where the Cost of Living is Rising Fastest

• The Increase in the amount of income required to "live comfortably," a concept used in GOBankingRates studies that combines the money needed to pay for necessities — including food, rent, utilities, transportation and healthcare — with the amount one should budget toward discretionary spending and savings.

Top 5 Cities Where the Cost of Living is Rising Quickly

GOBankingRates identified the cities where the cost of living index had increased by at least two points

5. Jacksonville, Fla. • Live Comfortably Amount Increase: $2,095 • Cost of Living Index Increase: 3.36 points 4. Austin, Texas • Live Comfortably Amount Increase: $1,407 • Cost of Living Index

Rental Housing Journal On-Site · July 2017

Increase: 3.84 points

3. Louisville, Ky. • Live Comfortably Amount Increase: $2,066 • Cost of Living Index Increase: 4.49 points 2. Seattle • Live Comfortably Amount Increase: $3,190 • Cost of Living Index Increase: 7.32 points 1. Nashville, Tenn.

• Live Comfortably Amount Increase: $9,135 • Cost of Living Index Increase: 8.61 points Additional Study Insights Home prices have been surging in Nashville. From April 2015 to April 2017, the median list price for a home rose by almost 30 percent, from under $260,000 to nearly $340,000.

According to new income limits set

by HUD, an individual earning $50,500

a year in Los Angeles County (#6 on the list) is now considered low-income.

The cost of living has actually gone down in New York, San Francisco, and Honolulu — cities with notoriously high expenses.

About GOBankingRates GOBankingRates.com is a personal finance news and features website dedicated to helping visitors live a richer life. From tips on saving money, to investing for retirement or finding a good interest rate, GOBankingRates helps turn financial goals into milestones and money dreams into realities. Its content is regularly featured on top-tier media outlets, including MSN, MONEY, AOL Finance, CBS MoneyWatch, Business Insider and dozens of others. GOBankingRates specializes in connecting consumers with the financial institutions and products that best match their needs. Start your journey toward a rich mind and full wallet with us here.

7

Rental Housing Journal On-Site

DEAR MAINTENANCE MEN

By Jerry L'Ecuyer & Frank Alvarez

Faucets, Storage and Vacancies Dear Maintenance Men: When the bathroom faucet was new, turning off the hot or cold water knobs would cut the flow of water immediately.

Two years later, upon turning them off, the faucet weeps a bit of water. Is this a sign the knob isn’t working? Can a clogged spout screen be fixed? With all these problems, do I need to buy an entire new fixture?

Paul Dear Paul: Most types of faucets are repairable with standard tools and a rebuild kit.

Note the brand and style of the faucet and find a corresponding repair kit at the local plumbing supply house or home improvement center.

Repair kits often come with the specialized tool you may need to repair the faucet.

The faucet screen can be cleaned and is housed in a removable assemble at the end of the spout. These can be spun off and the screens cleaned and replaced.

Keep in mind the cost of repairs may rival the cost of replacement. If the cost of repair is more than fifty percent of the cost of replacement, we recommend the faucet be replaced with new modern fixture.

8

Dear Maintenance Men: How can I add more storage to my utilitarian type bathrooms?

The residents complain that they need to store their toilet paper in the hallway!

Please list a few suggestions on what to do?

Robert Dear Robert: It does seem bathrooms are sometimes designed as an afterthought. Sink, toilet, bath and that is it. A modern bathroom will take into consideration the need for storage, electrical devises, personal hygiene etc. The first item that comes to mind is installing a bath sink

cabinet. An old style cabinet might only have a set of doors under the sink.

We find this is not adequate and a cabinet should have drawers along with access to under the sink. The drawers can store hair dryers, and all manner of personal bath items. A unique system we like utilizes the space between the studs in the wall. Cabinet doors or mirrors can be used to cover storage in the walls. The wall storage is perfect for toilet paper, rolled up towels, tooth brushes, and most other small items.

Install multiple towel racks on the back of the bathroom door for additional towel storage. The space above the toilet can easily accommodate an overhead

cabinet for larger items. Reversing the swing of the bathroom door from inward to outward will greatly increase the usable room and make the bathroom appear larger.

Dear Maintenance Men: It is currently summer time and that is when we get the most vacancies. How do I keep my residents from moving?

Denise Dear Denise: Often residents relocate during the summer months due to a change in schools their kids attend. They want ...continued on page 12

Rental Housing Journal On-Site ¡ July 2017

711 Powell Ave. SW, Suite 101 Renton, WA 98057 (425) 656-9077 • (425) 656-9087 (fax) admin@wmfha.org

Executive Director - Jim Wiard Board President - Becky Sanders Vice President - Sheri Druckman Treasurer - Laura McGuire Secretary – Melissa Downs Vice President of Suppliers Council - Rob Pendleton Immediate Past President - Brett Stevens

New Seattle Laws Affecting Apartments

A

s most everyone is aware, the Seattle City Council has been busy the past two years enacting new laws limiting how the rental housing industry does business in the City of Seattle.

While WMFHA has made every effort to educate the City Council on the potential negative impact on renters and the rental market in Seattle as a result of these proposed laws, the Council has pushed forward unilaterally to pass these onerous laws.

WMFHA is committed to educating our members and the rental housing industry of the complicated nuances of these laws. We encourage everyone with rental property in the City of Seattle to read the actual ordinances as passed by the Council.

The following are a few key points from the various laws recently passed which prohibit certain actions by landlords.

These laws are applicable to rental properties in the City of Seattle only.

Voter Registration Requirements The City of Seattle will now require rental housing providers to provide voter registration information to tenants. Voter registration information will be included with the Summary of Laws, in a new “packet” of information created by the City.

The law, proposed by Councilmember Kshama Sawant, requires SDCI to notify

rental housing providers when the packet is updated and becomes available.

After the packet becomes available, and SDCI has notified rental housing providers of the packet’s availability, the packet must be distributed to all tenants within 30 days of it becoming available.

As a reminder, Seattle law requires rental housing providers to provide the packet of information at the initiation of any tenancy, at renewal of any existing rental agreement, and annually in any month-to-month tenancy.

Move-In Fees Ordinance On December 12, 2016, the Seattle City Council unanimously passed legislation capping the amount housing providers can collect from residents when they move-in. The bill took effect January 15, 2017.

Specifically, the bill does the following: • Limits non-refundable fees to the tenant screening fee and any onetime cleaning fee charged at the initiation of tenancy.

• The tenant screening fee is limited to the actual cost of obtaining the tenant screening report, criminal background check, or credit report.

This cost must not exceed the customary cost charged by a tenant screening service in the City of Seattle.

• Under State law, the housing provider may charge for the actual costs of performing any rental references required as a part of the rental application process.

• The non-refundable application fee and cleaning fee cannot exceed 10 percent of the first full month’s rent.

An exception exists when the cost of the tenant screening report or tenant’s background investigation exceeds 10 percent of first month’s rent.

• If the tenant has paid a non-refundable cleaning fee, the housing provider cannot deduct the actual costs of cleaning normal wear and tear when the tenancy terminates.

• Prohibits any other non-refundable one-time fees charged at movein (commonly referred to as the administrative or application fee) and any other fees associated with pets.

• Limits the maximum security deposit to the first month’s rent, less any non-refundable fees charged.

• Permits the resident to pay all nonrefundable move-in fees, the security deposit and any last month’s rent charged in a payment plan.

• All rental agreements must include language describing the terms and conditions of the payment schedule, if a payment plan is requested by the tenant.

ºº For leases of six months or longer, the tenant may elect to pay the security deposit and nonrefundable move-in fees in six (6) consecutive equal monthly installments; ºº For leases of between 30 days and six months, the tenant may elect to pay the security deposit and nonrefundable move-in fees in four (4) consecutive equal monthly installments; • Payment plans are not applicable to security deposits and nonrefundable fees that are equal to or less than 25 percent of the first month’s rent.

• Requires housing providers to apply any money paid by the tenant to the rent first and then to other costs owing, except when either a three-day or 10-day notice has been served for non-payment of housing cost, then to the amount owing in that notice.

• Limits the pet damage deposit to no more than 25 percent of onemonth’s rent, regardless of the number of pets owned.

• Permits the tenant to request payment of the pet damage deposit in three consecutive monthly payments. The rental agreement must describe the terms and ...continued on page 19

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Rental Housing Journal On-Site

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Rental Housing Journal On-Site · July 2017

Rental Housing Journal On-Site

Fewer Renters Think ..continued from page 1 living in expensive metro areas on the East and West Coast," Lawrence Yun, NAR chief economist, said in the release.

Confidence among renters that now is a good time to buy a home continues to retreat Fifty-two percent of renters think now is a good time to buy, which is down both from last quarter (56 percent) and a year ago (62 percent) 80 percent of homeowners (unchanged from last quarter and a year ago) think now is a good time to make a home purchase.

Younger households, and those living in urban areas and in the costlier West region are the least optimistic.

The surge in economic optimism seen in the first quarter of the year appears to be short lived, according to the survey.

The share of households believing the economy is improving fell to 54 percent in the second quarter after soaring to a survey high of 62 percent last quarter.

Homeowners, and those living in the

Midwest and in rural and suburban areas are the most optimistic about the economy. Only 42 percent of urban respondents believe the economy is improving, which is a drastic decrease from the 58 percent a year ago.

Dimming confidence about the economy's direction is also leading households to not have as strong feelings about their financial situation.

The HOME survey's monthly Personal Financial Outlook Index showing respondents' confidence that their financial situation will be better in six months fell to 57.2 in June after jumping in March to its highest reading in the survey. A year ago, the index was 57.7.

"It should come as little surprise that the confidence reading among renters has fallen every month since January (64.8) and currently sits at its lowest level (53.8) since tracking began in March 2015 (65.7)," said Yun. Low housing turnover at the root of supply and affordability problems The survey also showed 71 percent of

homeowners believe it is a good time to sell. But whether they plan to list their home for sale is another question.

This quarter, 71 percent of homeowners think now is a good time to sell, which is up from last quarter (69 percent) and considerably more than a year ago (61 percent). Respondents in the Midwest (76 percent) surpassed the West (72 percent) for the first time this quarter to be the most likely to think now is a good time to sell.

There is an apparent mismatch between homeowners' confidence in selling and actually following through and listing their home for sale.

"There are just not enough homeowners deciding to sell because they're either content where they are, holding off until they build more equity, or hesitant seeing as it will be difficult to find an affordable home to buy," Yun said in the release. "As a result, inventory conditions have worsened and are restricting sales from breaking out while contributing

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to price appreciation that remains far above income growth."

"Perhaps this notable uptick in seller confidence will translate to more added inventory later this year. Low housing turnover is one of the roots of the ongoing supply and affordability problems plaguing many markets," he said.

Under half of respondents believe homes are affordable for most buyers; one in five would consider moving In this quarter's survey, respondents were also asked about the affordability of homes in their communities.

Overall, only 42 percent of respondents believe they are affordable for almost all buyers, with those living in the Midwest being the most likely to believe homes are affordable (55 percent) — and not surprisingly — West respondents (29 percent) being least likely to think homes are affordable.

Additionally, 20 percent of respondents would consider moving to another more affordable community.

Those earning under $50,000 annually (27 percent) and those age 34 and under (29 percent) were the most likely to indicate they would consider moving.

"Areas with strong job markets but high home prices risk a migration of middle-class households to other parts of the country if rising housing costs in those areas are not contained through a significant ramp-up in new home construction," said Yun. About NAR's HOME survey In April through early June, a sample of U.S. households was surveyed via random-digit dial, including a mix of cell phones and land lines. The survey was conducted by an established survey research firm, TechnoMetrica Market Intelligence. Each month approximately 900 qualified households responded to the survey. The data was compiled for this report and a total of 2,711 household responses are represented.The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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Rental Housing Journal On-Site

Top Three Biggest Stressors ...continued from page 1 topcomplaints were solidly in the area of tenant management.

Last year, ‘finding and keeping tenants’ came in a very close second (58%). This year it dropped to #3 (49%).

It swapped spots with ‘dealing with problem tenants’, which is now #2 (52%). ‘Tenant damage and vandalism’ came in fourth place this year (38%).

The take-away here seems clear.

Maintenance woes scored highest on their own, but three out of owners’ four top complaints were solidly in the area of tenant management. In fact, you have to go very deep into the list to find additional maintenance-related issues—such as pest management and severe weather, which tied at 6%.

Property owners were 54% men and 46% women, according to the survey.

Buildium said in the survey that, “As a rental property owner, whether you are a strategic investor or someone who has fallen more unexpectedly into ownership, you are probably curious about the experience of others.

How are they keeping property ownership profitable and enjoyable?

What are their best practices?”

“Or perhaps you are a property manager looking for insights on what owners care about most.”

How can you connect with them?

What are their expectations from property management and ownership?

Breaking down the top maintenance issues When Buildium.com broke down the top maintenance issues in the survey, to highlight problems that have hit owners and property managers the worst in recent years, roofing, painting, foundations and landscaping came to the top.

Maintenance upkeep costs were clearly at the top with “bad tenants” right behind, so “no wonder then when we asked owners why they might look for a property manager, 60% told us their top reason was maintenance,” Buildium.com said in the survey.

Owners said in the survey, “I would like someone else to deal with maintenance and emergencies,” was the top answer. And, 52 percent said managing property day-to-day is too time consuming.”

About the survey: In March 2017, Buildium and All Property Management deployed this second annual Property Owners Perspectives Survey to nearly 700 rental property owners across the U.S., asking them about property, what they expect, and where they turn for information advice and help.

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Dear Maintenance Men ...continued from page 8 to be close or within walking distance.

The other more problematic reason is poor maintenance service.

According to the 2011 national resident study, "Getting Inside the Head of the Online Renter," the number one factor in a resident's decision to renew a lease is "Quality of Maintenance Services."

Additionally, the current SatisFacts Insite® Index for Work Orders indicates that 18% of all service requests are not completed right the first time. And of those, only one-third of residents received notification that there would be a delay in completing the request.

What the above means is poor maintenance service can lead to higher vacancies. It does not matter if you have 10 units or 100 units; maintenance is a critical tool in the physical wellbeing of your property and the happiness of your residents. Think of it this way. A service call and parts may cost $250 to service a broken washing machine or water heater, resulting in a satisfied resident. However, a resident having to live with a broken washing machine or intermittent hot water may elect to move rather than dealing with the hassle of calling in repeated service requests. That resident vacating will now cost the owner thousands of dollars in loss rent and rehab work to bring the unit back to rent ready condition. Good maintenance is a year round tool to keeping your investment healthy and your residents paying the rent month after month.

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Rental Housing Journal On-Site

Job gains and household growth provide positive outlook for U.S. housing market Demand for housing expected to continue despite unsustainably strong house price gains weighing on affordability

By Nationwide

N

ationwide's latest forwardlooking barometer of the U.S. housing market health continues its positive outlook despite unsustainably strong house price gains weighing on affordability. The primary reason: housing demand. Household formation growth picked up sharply over the last quarter to move above the long-term average, and job gains remain solid.

"Household formation growth over the past year had a notable uptick this quarter over last, playing a big factor in driving up demand for housing and maintaining a strong market," said David Berson, Nationwide senior vice president and chief economist. "We are, however, keeping a close eye on affordability and especially house price appreciation as it is well above the longterm average."

According to Nationwide's Health of Housing Markets Report (HoHM Report), household growth is expected to remain above average during the next few years, increasing demand on an already limited supply of homes.

In fact, while the National Association

of Realtors just reported that national home inventory-sales ratio is around four months at the current sales pace, several markets are experiencing a month's supply of inventory turnover in half – and even a quarter – of that amount of time.

MSAs with the lowest housing inventory-sales ratios in 2017 Q1 are, in order: Seattle-Bellevue-Everett, Wash.; Denver-Aurora-Lakewood, Colo.; Tacoma-Lakewood, Wash.; Boulder, Colo.; Fort Collins, Colo.; Portland-Vancouver-Hillsboro, Ore.Wash.; Mankato-North Mankato, Minn.; Olympia-Tumwater, Wash.; San Francisco-Redwood City, Calif.; Sacramento-Roseville, Calif.; Fort Worth-Arlington, Texas; Dallas-PlanoIrving, Texas; San Diego-Carlsbad, Calif.; Columbus, Ohio; and OaklandHayward-Berkeley, Calif.

The report, measuring data as of 2017 Q1, also found that: Regionally, the rankings show positive and healthy housing trends in more than 75 percent of MSAs, suggesting sustainable expansion

during the next year.

While markets with strong ties to the energy sector (including North Dakota, Texas, Louisiana, and Alaska) continue to dominate the bottom 10 rated MSAs, the outlook for housing in these areas is slowly improving as energy production and employment recover.

The top two metro areas are in Pennsylvania, followed by two in Oklahoma. The 10 top metro areas in the index are, in order: Lancaster, Pa.; Scranton-Wilkes-Barre, Pa.; Fort Smith, Ark.-Okla.; Lawton, Okla.; Durham-Chapel Hill, N.C.; Pittsfield, Mass.; Toledo, Ohio; Springfield, Mass.; Philadelphia; and Vineland-Bridgeton, N.J. Victoria, Texas, ended a run of four straight quarters for Bismarck, N.D., as the bottom performing MSA. Half of the bottom 10 MSAs reside in Texas.

In order, the bottom 10 are: Victoria, Texas; Bismarck, N.D.; Texarkana, Texas-Ark.; Longview, Texas; Dallas-Plano-Irving, Texas; HoumaThibodaux, La.; Anchorage, Alaska; Sherman-Denison, Texas; Lafayette,

La.; and Asheville, N.C. The Dallas metroplex and Asheville are on this list primarily because of rapid house price appreciation and a resulting drop in affordability.

More information about the HoHM Report, including the methodology used, can be found at blog.nationwide. com/housing. The HoHM Report is released on a quarterly basis online and in print.

About Nationwide Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the U.S. and is rated A+ by both A.M. Best and Standard & Poor's. The company provides a full range of insurance and financial services, including auto, commercial, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; banking and mortgages; excess & surplus, specialty and surety; pet, motorcycle and boat insurance. For more information, visit www.nationwide.com.

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Rental Housing Journal On-Site

71 Percent of Homeowners Believe It's a Good Time to Sell Economic and Financial Confidence Dips

By National Association of Realtors

E

xisting housing inventory has declined year over year each month for two straight years, but new consumer findings from the National Association of Realtors® offer hope that the growing number of homeowners who think now is a good time to sell will eventually lead to more listings.

That's according to NAR's quarterly Housing Opportunities and Market Experience (HOME) survey1, which also found that fewer renters think it's a good time to buy a home, and respondents are less confident about the economy and their financial situation than earlier this year despite continuous job gains.

One trend gaining steam in the HOME survey is an increased share of homeowners who believe now is a good time to sell their home. This quarter, 71 percent of homeowners think now is a good time to sell, which is up from last quarter (69 percent) and considerably more than a year ago (61 percent). Respondents in the Midwest (76 percent) surpassed the West (72 percent) for the first time this quarter to be the most likely to think now is a good time to sell.

Lawrence Yun, NAR chief economist, says it's apparent there's a mismatch between homeowners' confidence in selling and actually following through and listing their home for sale. "There are just not enough homeowners deciding to sell because they're either content where they are, holding off until they build more equity, or hesitant seeing as it will be difficult to find an affordable home to buy," he said. "As a result, inventory conditions have worsened and are restricting sales from breaking out while contributing to price appreciation that remains far above income growth."

Added Yun, "Perhaps this notable uptick in seller confidence will translate to more added inventory later this year. Low housing turnover is one of the roots of the ongoing supply and affordability problems plaguing many markets."

On the decline: renter morale about buying a home and financial and economic optimism Confidence among renters that now is a good time to buy a home continues to retreat. Fifty-two percent of renters think now is a good time to buy, which is down both from last quarter (56 percent) and a year ago (62 percent). Conversely, 80 percent of homeowners (unchanged from last quarter and a year ago) think now is a good time to make a home purchase.

Younger households, and those living in urban areas and in the costlier West region are the least optimistic.

The surge in economic optimism seen in the first quarter of the year appears to be short lived. The share of households believing the economy is improving fell to 54 percent in the second quarter after soaring to a survey high of 62 percent

14

last quarter. Homeowners, and those living in the Midwest and in rural and suburban areas are the most optimistic about the economy. Only 42 percent of urban respondents believe the economy is improving, which is a drastic decrease from the 58 percent a year ago.

Dimming confidence about the economy's direction is also leading households to not have as strong feelings about their financial situation.

The HOME survey's monthly Personal Financial Outlook Index2 showing respondents' confidence that their financial situation will be better in six months fell to 57.2 in June after jumping in March to its highest reading in the

survey. A year ago, the index was 57.7.

"It should come as little surprise that the confidence reading among renters has fallen every month since January (64.8) and currently sits at its lowest level (53.8) since tracking began in March 2015 (65.7)," said Yun. "Paying more in rent each year and seeing home prices outpace their incomes is discouraging, and it's unfortunately pushing home ownership further away – especially for those living in expensive metro areas on the East and West Coast."

Under half of respondents believe homes are affordable for most buyers; one in five would consider moving

In this quarter's survey, respondents were also asked about the affordability of homes in their communities.

Overall, only 42 percent of respondents believe they are affordable for almost all buyers, with those living in the Midwest being the most likely to believe homes are affordable (55 percent) – and not surprisingly – West respondents (29 percent) being least likely to think homes are affordable.

Additionally, 20 percent of respondents would consider moving to another more affordable community.

Those earning under $50,000 annually (27 percent) and those age 34 and under ...continued on page 21

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Rental Housing Journal On-Site · July 2017

Rental Housing Journal On-Site

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Rental Housing Journal On-Site · July 2017

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Rental Housing Journal On-Site

Who Is Gen Z? Attracting the Next Generation of Renters Defining Generation Z

I

t’s still not easy to pinpoint the exact dividing line between Millennials and Generation Z (Gen Z). It usually takes a few years to gain true perspective on the characteristics that separate one generation from another. Many historians suggest that Gen Z began with babies born at some point in the 1990s. Most important, the definition of Gen Z includes children who were born in and grew up with the Digital Age. The members of this younger generation are now starting to look for their own first apartments—consider some trends that property managers need to know if they hope to attract the youngest adult renters.

Gen Z Won’t Write Checks To understand how Gen Z will prefer to do business, it’s helpful to refer to this 2014 infographic about Millennial renters. A couple years ago, almost a quarter of Millennials said that they had never written a check, so it’s fair to assume that this percentage will increase for Gen Z. Basic checking accounts rarely even come with checkbooks anymore; debit and credit cards are now the norm.

To attract young adults, property managers need to offer online payment

systems. In addition, Gen Z members prefer to communicate with property management via emails or text messages. If they don’t write checks, it’s also likely that they don’t check the mailbox daily; however, they check their phones multiple times throughout the day.

Gen Z Researches Online According the infographic mentioned earlier, 75 percent of Millennial renters checked online reviews when they were shopping for a new home to rent. It’s fair to assume that the next generation will be even more likely to base their housing choices upon information they can find online.

Members of Generation Z may search review sites, social networks, and forums before they ever pick up the phone or schedule a visit. This makes it critical for property owners to invest in online reputation management if they hope to attract these young renters.

For example, it’s important to gather positive reviews and to learn how to handle negative comments.

Gen Z Demands Connectivity Certainly, college students will require the internet for their homework.

However, almost all young adults want

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to connect their computers and phones in order to use them for entertainment, shopping, and communication. This means that cable internet services might not be enough. Gen Z members will also expect wireless reception.

Real estate agents used to say the first things that prospects checked were the kitchen and bathroom. With Gen Z, the first thing they may check is the number of bars they see on their phone screen. When properties can advertise fast internet speeds and good wireless reception, they are likely to gain a competitive edge with young adults.

of electronic security systems and keyless locks.

Why Property Managers Should Care About Gen Z The oldest members of Generation Z are entering the market and starting to shop around for their first apartments.

Of course, their tastes aren’t so different from younger Millennials; but property owners and managers can secure their future business by learning more about their preferences and trying to accommodate them.

Gen Z Pays More for Smart Apartments Wakefield Research helped conduct a study to uncover some surprising preferences that younger renters might have. According to this study, Gen Z won’t just want online access for their computers and phones; in addition, they will also prefer all sorts of smart, connected appliances and devices.

Some examples might include smart thermostats that can help keep apartments comfortable and save money on power bills. Younger renters also have security concerns, and they might prefer the safety and convenience

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Rental Housing Journal On-Site · July 2017

Rental Housing Journal On-Site

Multifamily Employee and Resident Satisfaction Are Tied Together Study Says

I

t is becoming more important than ever that a multifamily company be seen as being socially responsible, much as Google says “Don’t be evil,” according to a new benchmark study.

Corporate social responsibility is now an expanding concept, according to ManagInc’s new study, and includes caring for all stakeholders, including everyone who has an impact on a multifamily company’s success from employees and suppliers to residents and to the communities one does business within. It is especially important to Millennials.

There is a direct relationship between multifamily employee and resident satisfaction An analysis of the responses to the survey’s 2016 employee and resident turnover rate questions shows the clear relationship between the two, the study says. Even without viewing these striking findings, one intuitively understands that engaged and satisfied employees deliver more superior service, which of course impacts resident retention.

• Engaged and satisfied employees are less likely to resign.

• Engaged and satisfied employees are more likely to be motivated to provide superior service.

• •

Superior service leads to improved resident satisfaction and resident turnover.

As the research cited earlier shows, greater engagement and reducing employee and resident turnover have clear and significant impacts on the bottom line.

In the workplace in multifamily As a point of reference, the National Apartment Association reported employee turnover historically has shown employee turnover rates to be in the low 30% range, while the historical resident turnover rate lies in the low 50% range.

The goal is to outperform the industry

Rental Housing Journal On-Site · July 2017

due to reduced employee and resident turnover impact, the study says.

• Where we are succeeding, the report says • Employee recognition and appreciation program / events • Annual Personal Time Off offered increases based on tenure • Annual Personal Time Off offered is at least 15 days • In-house education staff and/or outsourced education program • Company pays for employee certification education and licensing program (i.e. NAA CAM designation)

• • • •

All position openings promoted to all existing staff Human Resource department/ staff Company vision and goals clearly articulated to all employees Monthly or quarterly communications to all employees regarding company updates

Where we are falling short, the report says • Paid maternity leave offered • Paid paternity leave offered

...continued on page 22

17

Rental Housing Journal On-Site

First Half of 2017 Ends with Record Sales

H

alfway through 2017, the U.S. housing market is on pace for another record year as four of the last six months have topped same month sales from 2016, according to the July 2017 RE/MAX National Housing Report. June home sales were 1.4% higher than June 2016, which was previously the month with the most home sales in the nine-year history of the report. To access the housing report infographic, visit rem.ax/2cYFT50.

The combination of increased sales and a record low inventory that slipped further to 2.8 months resulted in higher sales prices. June's median sales price of $245,000, up 7.5% over last June, also set a RE/MAX National Housing report record. In fact, prices increased in 50 of the report's 53 markets.

The average number of Days on Market dropped to a report-record low of 47, while inventory dropped yearover-year in 87% of the markets.

Other notable numbers: • Thirty of the 53 metro areas experienced an increase in transactions.

• The June 2017 Median Sales Price of $245,000 was the highest in the history of the report.

• Decreasing 15.2% from June 2016, inventory continued to decline year-over-year. This is the 104th consecutive month of year-over-year declines dating back to October 2008.

• The June 2017 average Days on Market was 47, the lowest Days on Market in the history of the report.

"Sellers continue to benefit from limited inventory, getting top-dollar for their homes, and as a result, overall sales are at a record high," said Adam Contos, RE/MAX Co-CEO. "But buyers shouldn't be discouraged.

Mortgage rates are still relatively low and the market may be taking a positive turn, albeit subtle, as recent Labor Department data showed a decline in open construction jobs which could mean more workers focused on new home builds."

Closed Transactions Of the 53 metro areas surveyed in June 2017, the overall average number of home sales increased 7.5% compared to May 2017 and 1.4% compared to

June 2016. Thirty of the 53 metro areas experienced an increase in sales year-over-year including, Trenton, NJ +14.9%, Fargo, ND +14.6%, Wilmington/Dover, DE +12.9%, Albuquerque, NM +10.4% and Billings, MT +10.4%.

Median Sales Price – Median of 53 metro median prices In June 2017, the median of all 53 metro Median Sales Prices was $245,000, up 5.6% from May 2017 and up 7.5% from June 2016. Only three metro areas saw a decrease in Median Sales Price (Trenton, NJ, -12.1%, Anchorage, AK, -2.5%, and Wilmington/Dover, DE, -1.3%). Ten metro areas increased by double-digit percentages, with the largest increases seen in Las Vegas, NV +13.7%, Nashville, TN +13.7%, Seattle, WA 12.3%, Manchester, NH +12.2%, and San Diego, CA +11.6%.

Days on Market – Average of 53 metro areas The average Days on Market for homes sold in June 2017 was 47, down four days from the average in May 2017, and down seven days from the June 2016 average. The four metro areas with the lowest Days on Market were Omaha, NE at 20, Seattle, WA at 20, Denver, CO at 21 and San Francisco, CA at 22. The highest Days on Market averages were in Augusta, ME at 119 and Miami, FL at 85. Days on Market is the number of days between when a home is first listed in an MLS and a sales contract is signed.

lowest Months Supply of Inventory continued to be in the west, with San Francisco, CA at 1.0, Seattle, WA at 1.1, and Denver, CO at 1.2.

and an attempt is made to include at least one metro from each state. Metro area definitions include the specific counties established by the U.S. Government's Office of Management and Budget, with some exceptions.

Contact For specific data in this report or to request an interview, please contact newsroom@remax.com.

Definitions

About the RE/MAX Network: RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. Over 110,000 agents provide RE/MAX a global reach of more than 100 countries and territories. Nobody sells more real estate than RE/MAX, when measured by residential transaction sides. RE/MAX, LLC, one of the world's leading franchisors of real estate brokerage services, is a wholly-owned subsidiary of RMCO, LLC, which is controlled and managed by RE/MAX Holdings, Inc. (NYSE: RMAX).

With a passion for the communities in which its agents live and work, RE/MAX is proud to have raised more than $157 million for Children's Miracle Network Hospitals® and other charities. For more information about RE/MAX, to search home listings or find an agent in your community, please visit www.remax.com. For the latest news about RE/MAX, please visit www.remax.com/newsroom.

Description The RE/MAX National Housing Report is distributed each month on or about the 15th. The first Report was distributed in August 2008. The Report is based on MLS data in approximately 53 metropolitan areas, includes all residential property types, and is not annualized. For maximum representation, many of the largest metro areas in the country are represented,

Transactions are the total number of closed residential transactions during the given month.

Months Supply of Inventory is the total number of residential properties listed for sale at the end of the month (current inventory) divided by the number of sales contracts signed (pended) during the month. Where "pended" data is unavailable, this calculation is made using closed transactions. Days on Market is the number of days that pass from the time a property is listed until the property goes under contract for all residential properties sold during the month.

Median Sales Price is the median of the median sales prices in each of the metro areas included in the survey.

MLS data is provided by contracted data aggregators, RE/MAX brokerages and regional offices. While MLS data is believed to be accurate, it cannot be guaranteed. MLS data is constantly being updated, making any analysis a snapshot at a particular time. Every month the RE/MAX National Housing Report re-calculates the previous period's data to ensure accuracy over time. All raw data remains the intellectual property of each local MLS organization.

SOURCE RE/MAX, LLC Related Links http://www.remax.com

Months Supply of Inventory – Average of 53 metro areas The number of homes for sale in June 2017 was up 1.2% from May 2017, and down 15.2% from June 2016. Based on the rate of home sales in June, the Months Supply of Inventory was 2.8, compared to May 2017 at 2.6 and June 2016 at 3.2. This is the fourth consecutive month that months supply has been below 3.0. A 6.0-months supply indicates a market balanced equally between buyers and sellers.

In June 2017, 52 of the 53 metro areas surveyed reported a months supply of less than 6.0, which is typically considered a seller's market. At 6.4, Miami, FL continued to be the only metro area that saw a months supply above 6.0, which is typically considered a buyer's market. The markets with the

Advertise in Rental Housing Journal On-Site Circulated to over 6,000 apartment owners, on-site and maintenance personnel monthly.

Call 503-221-1260 for more information www.rentalhousingjournal.com 18

Rental Housing Journal On-Site · July 2017

711 Powell Ave. SW, Suite 101 Renton, WA 98057 (425) 656-9077 • (425) 656-9087 (fax) admin@wmfha.org

Executive Director - Jim Wiard Board President - Becky Sanders Vice President - Sheri Druckman Treasurer - Laura McGuire Secretary – Melissa Downs Vice President of Suppliers Council - Rob Pendleton Immediate Past President - Brett Stevens

New Seattle Laws ..continued from page 9 conditions of the payment schedule.

• No other fees may be charged for keeping a pet. Monthly pet rent is ok to charge.

• Deductions from the pet damage deposit are limited to damage caused only by pets the tenant is responsible for.

• The holding fee, authorized by State law, is excepted by this law. Housing providers can charge a holding fee, of any amount, and apply it to either the security deposit or to the first month’s rent.

First In Time Law In a unanimous vote on August 8, 2016, the Seattle City Council created a first of its kind, First-In-Time policy.

Though the law took effect January 1, 2017, enforcement of the First-in-Time provisions began on July 1, 2017.

The law requires a housing provider to screen the first applicant that provides a completed application and, if the applicant qualifies per the predetermined screening criteria, offer tenancy to that applicant. There are three important components to this law: I. Screening Criteria First-in-Time adds to the State’s screening criteria requirements. The following must be included in all screening criteria for properties in the City of Seattle: • Disclosure of the minimum threshold for each criterion used to screen an applicant in the written screening criteria.

• If the property includes rent restricted units, such as MFTE, the screening criteria must identify the different or additional criteria used for these rent restricted units.

• All information, documentation and other submissions necessary to complete applicant screening (including those documents associated with an individualized assessment).

• How to request additional time to complete the application. The law permits a request for additional time because of a reasonable accommodation or because of a request for meaningful access.

“Meaningful access” is defined as the need to obtain language translation assistance. The housing provider is not required to provide language translation services.

II. Advertising All advertising of an available apartment home on any website must include direct access to the screening criteria. The Office of Civil Rights has determined by rule, that the advertisement may include the full text or a hyperlink to the required information.

The hyperlink must be obvious in the advertisement and must take the applicant directly to the screening criteria. The hyperlink cannot take the applicant to the home page of the property.

In addition, all property websites that advertise available apartment homes must include a direct link to the screening criteria. For example, below the link to “Availability” on a website’s homepage, there must be a direct link to the screening criteria. (Note: the law does not specify where on the website to place a link to the screening criteria, just that the link be conspicuous and self-evident.)

III. Selecting a Resident First, after accepting a completed application, the housing provider must date and time stamp the application.

All applications must be screened in the order they are received. The law does not limit making a unit unavailable while screening the first applicant.

If, after screening the applicant, the housing provider needs more information (i.e. conditional approval), the housing provider may request additional information by telephone, in writing, or in person and must provide at least 72 hours for the applicant to provide the information.

The housing provider must provide qualified applicants with 48 hours to accept any offer. An applicant may request additional time to complete an application or request meaningful access. If additional time is requested, the date and time of the completed application is the date and time of the request for additional time.

The housing provider may request reasonable documentation to support a request for meaningful access with the completed application. Requests for reasonable accommodations are governed by the Federal Fair Housing Act. Source Of Income Ordinance This new law affecting rental housing in the City of Seattle only was unanimously passed by the City Council on August 8, 2016. The law became effective September 16, 2016.

WMFHA participated in the original stakeholder group pertaining to source of income legislation only, and provided public comment at three committee hearings and Full Council, and written comments on multiple occasions at various stages of the process on the entire ordinance.

Those comments expressed concerns over the unintended consequences of this legislation and the lack of direct impact in solving the City’s housing supply problem. The Council deemed those comments and suggestions unimportant in their consideration of this ordinance.

The law is multi-faceted and includes three distinct parts.

Preferred Employer Programs: The use of “preferred employer” programs is now prohibited within the City of Seattle limits. This means that discounts on fees and security deposits provided to employees of certain companies (Boeing, Costco, Microsoft, etc.) can no longer be offered to incentivize these prospective residents to rent in your communities.

Rental Housing Journal On-Site · July 2017

However, any resident currently residing in your community, who received a “preferred employer” discount when they moved in, may keep that discount until they (the resident) terminates the lease and vacate the property.

Exceptions to the new law include employer owned housing offered to employees of the employer, publicly funded housing, and housing for the benefit city or public employees.

Source of Income Protections: The new law expands the Section 8 protected class of individuals and requires rental housing providers to accept a prospective resident whose income is derived from any lawful and verifiable source, other than compensation for employment.

Verifiable income is income that can be confirmed as to amount and receipt.

This includes social security benefits and other retirement programs, child support, and any federal, state, local government, private or nonprofitadministered benefit program.

Rent to Income Ratio: The law requires a rental housing provider to deduct any subsidy benefit the resident receives from the total monthly rent prior to determining whether the resident meets a pre-determined rent to income ratio.

The law also requires the rental housing provider to include all legal and verifiable sources of income in calculating the prospective resident’s total monthly income.

Community Pledge: The new law requires a rental housing provider to accept a written community pledge for past due rent, housing costs and any attorney fees and legal costs owed, if the pledge itself or in combination with any other payments by the resident satisfies the entire outstanding balance owing.

A community pledge must be accepted by a rental housing provider prior to the expiration of a three-day pay or vacate notice.

The community pledge must not commit the rental housing provider to any conditions and the provider of the pledge must commit to paying the pledge within 5 business days. A community pledge is a commitment by a local government or community organization that commits to paying all of or a portion of a resident’s past due rent.

Tenant Protections Ordinance The Seattle City Council passed an ordinance allowing a tenant to challenge a rent increase if defective conditions exist that may affect health and safety. The new law took effect in July, 2016.

Here’s how the new law works: After a landlord delivers a notice of rent increase of any amount, the tenant may notify the landlord in writing or by email about defective conditions the tenant believes exist in the apartment unit. The new ordinance requires the tenant to give the written notification to the landlord before the effective date of the rent increase.

After the tenant has notified the landlord and prior to the rent increase taking effect, the landlord or tenant may request an inspection from the City. If an inspection is not requested by the landlord or tenant prior to the effective date of the rent increase, the rent increase becomes effective and any subsequent request for an inspection cannot suspend a rent increase under this law.

If the City inspection determines defective conditions do not exist, or if the defective conditions were caused by the tenant, the rent increase goes into effect on the date identified in the rent increase.

However, if the City inspection determines that a defective condition does exist, the rent increase is suspended until the landlord remedies the condition and the City re-inspects the apartment unit. Any request for inspection should be made to the Seattle Department of Construction and Inspection.

Criminal Records Screening The City Council is considering a new law prohibiting landlords from screening applicants for criminal convictions older than two (2) years from date of conviction (the current state law is 7 years from release).

It is already a best practice to not consider arrest records, and to not screen for criminal records by using blanket exclusions. It is also becoming practice to allow for individualized assessment of the person’s circumstances surrounding their crime or crimes.

However, the new law will make it illegal to reject an applicant because of a serious criminal conviction that is more than two years old, including serious or violent crimes such as arson, assault, burglary, domestic violence, homicide, manslaughter, kidnapping, robbery and sex offenses. A history of repeated or multiple criminal convictions, if more than 2 years old, could not be considered as well.

Our government affairs team, as well as that of other housing associations, have consistently attempted to meet with Councilmembers to offer advice, guidance and assistance in drafting legislation that is fair, productive and might result in effective legislation.

Unfortunately, the Councilmembers have no interest in hearing from the industry that they are trying to regulate, and consistently lock the rental housing industry out of negotiations on new laws that attempt to regulate our industry.

For more information regarding Seattle laws or Washington state law changes, feel free to contact the Washington Multi-Family Housing Association at 425-656-9077 or go to www.wmfha.org.

19

Rental Housing Journal On-Site

Why Is The Internet So Bad In ..continued from page 1 Industry needs improving; just as there are quality options for drinking water in the market, there are quality options for Internet. A “Glacier Water” Internet experience stands apart from typical Internet offerings for the residents, simultaneously generating revenue, increasing brand loyalty and maximizing retention for an apartment owner.

Comparing “Dirty City Water” to “Crystal Clean Glacier Water” is like comparing “best-effort” Cable Modem or DSL services (a.k.a. Modem Service) to a professionally managed, highly reliable, Fiber Backed Property-Wide WiFi service (a.k.a. Pure Internet).

When a network is installed and managed correctly, the true essence of “Pure Internet” can be achieved; if not, the likely experience is the statusquo (or worse) that plagues American Internet services today. Most have always known they’re paying too much for an inconsistent, inferior service and it’s no secret “Big Box” Internet Service Providers (ISP’s) are often ranked last in customer surveys. What’s not as intuitive is why.

The 4 pillars to “Dirty City Water” (Modem Service) Pillar 1 - Bandwidth: Calculating Internet speeds are often misunderstood by consumers.

The industry has done a fabulous job of masking what’s important in achieving true speeds and a pure Internet experience.

A) Internet Speeds: Bad news! Buying more Mbps (Megabits per Second) seemed the answer to faster Internet speeds but that’s not exactly true.

Purchasing more Mbps buys capacity not speed. Speed, how we comprehend it, is perceived in distance; like with miles per hour (MPH). Contrary to most beliefs, Internet speed is more accurately expressed as latency. Lower the latency, increase webpage load times. Isn’t that what we are looking for?

Picture the Internet like a freeway; purchasing more Mbps buys you more lanes not a higher speed limit.

Unknown by most, your lanes still move at the speed of your latency regardless of how many lanes you buy. Latency is something most ISP’s won’t discuss.

They cannot control, manage or sell lower latencies effectively; instead they sell you more “slow lanes” of capacity.

“What’s important to note here, and this confuses a lot of people, is that your internet isn’t any faster from 1 Mbps to 5 Mbps, or however much bandwidth your connection has. Your data is just transferred to you at a faster rate because more data can be sent at the same time. It’s more efficient, making your internet perceptually faster, not technically faster.”

Your true Internet speed is the relationship between bandwidth (how much) and latency (how fast) – not just bandwidth alone.

B) Oversubscription: Modem Services are notorious for oversubscription ratios that routinely surpass 100 to 1.

Meaning, 100 people are sharing the same allocation of bandwidth on the same “Internet pipe”. There’s nothing inherently wrong with oversubscribing bandwidth; most people aren’t fully utilizing their bandwidth. Further, it increases the cost efficiencies of a network.

However, when oversubscriptions are high, it causes 20

peak period slow-downs for end-users.

One hundred (100) households with 5 devices or more, all sharing the same internet pipe, is simply too much.

C) Symmetrical Speeds: Many forms of Internet, namely modem services, have asymmetrical speeds. This means higher downloads speeds than upload speeds.

It’s common to see a 10-to-1 ratio. This can be a problem for live communication applications; like video streaming (e.g.

Skype), VoIP or chat. If you are “... running any real-time applications like Microsoft Office365, VPN, VoIP, video conferencing, web conferencing, and/or you have a need for large file transfers, you will benefit from high speeds in both directions…”

Read more about this here. A growing number of businesses facilitate remote work from home.

Hence, the virtual work force is rapidly growing; it’s imaginable to see a majority of the workforce working remotely in the future.

D) Privacy: Make no mistake your Internet habits are being monitored, recorded and stored. With recent Internet laws being passed, it’s now legal for ISP’s to collect and sell “ALL” of your browser history and other relevant data. IT professionals can dodge this; however, for the rest of us, prepare to share your online habits with your ISP.

Pillar 2 – Management: A) Dirty Data: Modem services are a WIDE OPEN pipe from the Internet to your home. This means that hackers have the ability to penetrate your network; the only obstacle is your $60 router from Best Buy, configured and managed by you. The “average Joe” is expected to configure their router in an attempt to protect against these professional hackers. Managing a network at this level is not for the faint at heart, yet we have been relegated to “figuring-it-out.” Millions of Americans are “on-their-own” which creates legitimate risks and concerns.

B) Customer Support: Unfortunately support from most “Big Box” companies only exists to maintain THEIR wiring and equipment. If they confirm it’s not THEIR fault, you’re on your own. In some cases, you may find they offer expensive network support to help guide you through the perils. However, most ISP’s simply confirm the signal to your modem and don’t support it further. A perfect storm of bad equipment, bad wiring, monopolistic attitudes and profit-first philosophies fuel this lackluster and inept support experience. In the end, customer support falls short of par for most ISP’s. “…Without competition, there's no incentive for internet providers to improve infrastructure. These massive telecom companies create a bottleneck in the last mile of service by refusing to upgrade critical infrastructure. And they can charge exorbitant prices for the sub-par service while they're at it.”

C) Best Effort Service: Unfortunately, most Americans are relegated to “Dirty City Water” because they have “best effort” modem service as their primary residential connection. Somehow the industry has thrived by offering lowestcommon-dominator-services.

They even named it similarly, “Best Effort.”

The ISP is saying they will try their best to provide what you paid for. Only, there are no Internet-quality-police to hold them accountable. Worst yet,

there’s often a monopoly or duopoly which creates very little incentive to improve quality of service and customer support. That’s why the industry’s biggest providers are routinely voted the most hated in the U.S. Security: You are on your own in terms of security. Relying on virus protection or your operating systems firewalls can certainly help stop certain types of online threats. However, you are still in grave danger from hackers.

Without professional management the network is left with a “Mom and Pop” security environment that lamely attempts to thwart determined threats.

A study by CNET.com stated… “… all [14 top home routers] had critical security vulnerabilities that could be exploited by a "remote adversary" and could lead to unauthorized remote control of the router.”

Pillar 3 – Design/Configuration: A) WiFi Installation & Design: In a small space it may appear like WiFi design doesn’t really matter – there isn’t enough square footage to cause coverage issues, right? Not exactly, the WiFi radio frequencies (RF) from neighboring routers are all fighting for the same limited air space, with zero synergy. This is compounded in a multifamily environment; more WiFi interference means slower connections and decreased security, effectively creating a hodge-podge design that is counter-productive to “Pure Internet”.

B) Configuration: Configuring a home router may seem intuitive if you know the basics. However, your home network is inherently disadvantaged because of the limited-feature-set found in a home router. They usually don’t include enterprise firewalls, bandwidth shaping, black lists and interference mitigation. The lack of features vastly limits proper security. Even if an enterprise router was used, the weakest link is still the novice home network engineer. A BBC article titled “How easy is it to hack a home network?” puts novice configurations and home networking blunders into perspective.

“I found out just how severely compromised my home network was in a very creepy fashion. I was on the phone when the web-connected camera sitting on the window sill next to me started moving. The lens crept round until it pointed right at me. I knew that the attackers were on the other end watching what I was doing, and potentially, listening to the conversation.”

Pillar 4 – Equipment & Wiring: A) Competition: It’s all about the bottom line, thus your local ISP plans on using their antiquated wiring infrastructure for as long as possible.

Most ISP’s enjoy monopolistic environments. They won’t ordinarily upgrade unless there are extenuating forces. For example, in Google Fiber territories, local ISP’s magically upgraded their fiber infrastructure to compete. Googles expansion has since come to a halt. Google knows if they expand to new cities the local incumbents will simply ramp-up services in that area. Atlanta is the perfect example -- 99% of the country is not so fortunate to have a turf war driving down prices and forcing fiber upgrades. With little to no competition there’s no incentive to upgrade wiring

and cannibalize profits. Unless something changes, most of America will have to wait for fiber -- hunker down and get used to antiquated wiring for decades.

B) Antiquated Delivery: Bandwidth delivered over coaxial or copper wire is outdated, and, by association, the entire delivery process has technological bottlenecks. Your delivery is only as strong as the weakest link. Even with fiber-to-the-home (FTTH), your bottleneck may still be the wiring inside the home, fiber media convertor, router or modem. There are many places the delivery could be bottlenecked when dealing with old wiring.

“Most of America's telecommunications infrastructure relies on outdated technology, and it runs over the same copper cables invented by Alexander Graham Bell over 100 years ago. This copper infrastructure—made up of "twisted pair" and coaxial cables—was originally designed to carry telephone and video services. The internet wasn't built to handle streaming video or audio.”

C) Over-the-Counter Routers: Most people either rent a modem/ router or buy one and, while overthe-counter WiFi equipment is priced to sell, it does not provide premium technology. Bigger living spaces can experience dead spots and most turn to mesh equipment, repeaters or other consumer grade “Whole-Home WiFi Solutions”. These types of solutions commonly relay the WiFi signal, which slows speeds around 50% per hop.

Internet is only as fast as the weakest link. Next to bandwidth, equipment is the most common area that contributes to bad Internet experiences.

Underserved/Overpriced: The typical Internet connection “sucks” and is overpriced. The average cost of residential Internet is around $75.

Additionally, most pay $10 a month to rent their modem. The cost of Internet is not necessarily more than other utilities but definitely comes with the lowest quality and reliability.

It is as essential as running water, but has all the problems of a do-it-yourself environment. Other utilities don’t pose the same dynamics. For most, the water pressure doesn’t drop every time neighbors run a bath. We pay $75+ for an essential utility service; we want the service to work – no headaches or training involved. From an antiquated infrastructure to user-error the entire experience is often a nightmare.

Next month: Part II How to Fix Slow Internet for Residents, Generate Revenue and Ditch the “Cable Guys” With a Multifamily Internet Service Fiber Stream is a provider of futuristic high speed Internet and TV services. Fiber Stream’s target markets include Apartments, HOA'S, MDU's, and senior living communities. Headquartered in Phoenix, Arizona, Fiber Stream is a nationwide "Full Service" Internet provider, offering Fiber to the Unit (FTTU), Fiber-Backed Property-Wide Wi-Fi, Gigabit Internet, Managed Wi-Fi solutions and IPTV. Fiber Stream developed one of the first Revenue Generating Internet Systems of its kind. For more information, visit us here or at www.FiberStreamWiFi. com or call 1-888-644-9434.

Rental Housing Journal On-Site · July 2017

Rental Housing Journal On-Site

71 Percent of Homeowners (29 percent) were the most likely to indicate they would consider moving.

"Areas with strong job markets but high home prices risk a migration of middle-class households to other parts of the country if rising housing costs in those areas are not contained through a significant ramp-up in new home construction," said Yun.

About NAR's HOME survey In April through early June, a sample of U.S. households was surveyed via random-digit dial, including a mix of cell phones and land lines. The survey was conducted by an established survey research firm, TechnoMetrica Market Intelligence. Each month approximately 900 qualified households responded to the survey. The data was compiled for this report and a total of 2,711 household responses are represented.

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

1 NAR's Housing Opportunities and Market Experience (HOME) survey tracks topical real estate trends, including current renters and homeowners' views and aspirations regarding homeownership, whether or not it's a good time to buy or sell a home, and expectations and experiences in the mortgage market. New questions are added to the survey each quarter to reflect timely topics impacting real estate.

Seattle

...continued from page 14 HOME survey data is collected on a monthly basis and will be reported each quarter. New questions will be added to the survey each quarter to reflect timely topics impacting the real estate marketplace. The next release is scheduled for Monday, June 12, 2017 at 10:00 a.m. ET. 2 Index ranges between 0 and 100: 0 = all respondents believe their personal financial situation will be worse in 6 months; 50 = all respondents believe their personal financial situation will be about the same in 6 months; 100 = all respondents believe their personal situation will be better in 6 months.

Information about NAR is available at www.nar.realtor. This and other news releases are posted in the "News, Blogs and Videos" tab on the website.

Some statistical data in this release, as well as other tables and surveys, are posted in the "Research and Statistics" tab. Follow NAR Media's Newsline blog at http://narnewsline.blogs.realtor.org and Twitter at @NARMedia.

SOURCE National Association of Realtors Related Links http://www.realtor.org

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Rental Housing Journal On-Site

Employee and Resident Satisfaction ...continued from page 17

• • • • • • •

Student loan repayment program Mandatory new employee orientation program Formal mentoring program Formal career development program Annual employee satisfaction survey program Policy requiring responding to all online employee-generated reviews (i.e. Glassdoor.com) Annual supplier satisfaction survey program

Where we are succeeding with the resident experience • Policy requiring responding to all online resident reviews (i.e.

ApartmentRatings.com, Yelp) • Resident satisfaction feedback/ survey program • Mass text, email or call blast system for property-wide announcements

22

Where we are falling short with the resident experience • In-unit apartment upgrade lease renewal incentive program • Service request guarantee • 30-day move-in satisfaction guarantee program Where we are succeeding with the greater good and green initiatives • Company-organized community service events • Company permits personal time off to volunteer and perform community service • Low impact LED and CFL lighting used at properties • High efficiency Energy Star appliances used for in-unit appliance replacements and turnover units • Water conservation systems/ programs implemented

Where we are falling short in these areas • Company donations made for employees who volunteer individually or as a group • Automatic payroll deductions for charitable donations • Charitable donation matching • Recycling available at all properties • Sustainability training and certifications for maintenance teams • Promote local utility company renewable energy options to residents • Renewable energy utilized at any properties (solar, wind, geothermal) • Subsidize / encourage carpooling, car sharing, mass transit, or bicycling

• •

CSR is important to residents, especially Millennials: 80.3% CSR can positively impact our company’s reputation: 95.1%

About ManagInc ManagInc is the multifamily industry's first-ever Corporate Social Responsibility consulting service. Our philosophy is that everyone wins when all stakeholders' needs are priorities – with the company's "win" being the bottom line implications of reduced employee and resident turnover, and an improved reputation. Earning a reputation of being a socially responsible company is critical due to the impact this has on employment and purchasing decisions

by Millennials, the largest segment of the U.S workforce and rental market. For this reason, CSR has been called the evolution of reputation management. Beyond investigating online reviews from current residents and employees, prospective residents and employees also now evaluate a company's commitment to having a positive impact on society; research shows the significant impact all of this has on a company's appeal.

What we agree on about importance of corporate responsibility in multifamily • My company is committed to being a socially responsible company, caring for employees, suppliers, residents and the communities we operate within: 80.6% • CSR does, or can, have an impact on employee retention, resident retention, company’s performance: 90.3% • CSR is important to employees, especially Millennials: 88.7% • CSR is important to suppliers, especially Millennial employees: 53.3%

Rental Housing Journal On-Site · July 2017

Rental Housing Journal On-Site

3 Property Managers Share Their Secrets to Success

by Sydney Daly-Weber

B

eing a property manager is very demanding. Owners, tenants, maintenance technicians, coworkers … someone is always trying to get a hold of you. You also need to possess many different skills to balance your every day tasks and responsibilities.

But being a property manager can also be very rewarding if you don’t let the stress consume you.

To help you on your path to stressfree property management, some of the property managers at Utopia Management, one of southern California’s premiere property management companies, have been kind enough to compile a list of tips to help make you a more successful property manager.

Tip #1: Know Your Properties Inside and Out It’s important to be knowledgeable about each specific property you manage in order to answer any questions potential renters may ask.

Get to know the property to learn about any unique qualities or quirks it has. This helps you provide more information to renters, shows you have actually set foot on the premises, and saves you time by not having to look it up each time.

Knowing about the general area is helpful, as well. This allows you to provide prospective clients with information such as nearby freeway access, shopping centers, restaurants, etc., which in return helps them decide if it’s somewhere

they would like to live. Try to avoid more sensitive subjects such as crime rates, school districts, churches, and racial population in the area. Providing information on these topics would be considered illegal steering.

People interested in renting in the area need to do their own research in order to make the best decision for themselves.

But knowledge is power and the more knowledge you have in regards to each specific property, the more success you will have when it comes to renting the property and therefore maintaining a good relationship with the owner and/or renter.

Check out What Millennials Want for ideas on what types of questions you might get asked.

Tip #2: Be Dependable and Available Being a dependable person is extremely beneficial to being a successful property manager.

It’s important to respond to phone calls and e-mails in a timely manner. If you are managing numerous properties you will be very busy, but being available when owners and/or tenants need to speak with you is essential. This builds trust within your business relationship and makes your client feel confident that they can rely on you.

You certainly have a life outside of work. There is no need to give out your personal cell phone number. As long as they have your e-mail address and you

try to keep yourself available as much as possible during regular business hours, that is enough.

Time management and organization are also a huge part of being dependable.

Don’t spread yourself too thin. Make sure you schedule meetings accordingly in order to meet your clients’ needs.

Lastly, a great quality to possess is people skills. You will be working with numerous people and it’s your job to keep them satisfied. Inevitably, you will encounter some unhappy folks. Try your best to give them a positive customer service experience.

Tip #3: Practice Good Marketing Techniques Property management is not about being a salesperson; however, you do need to sell owners on your capabilities and spike the interest of prospective tenants in the property. Owners need to be confident that you will be successful in renting their property to a quality tenant. Tenants need to be intrigued by the property. This is where marketing comes in. The internet is your number one resource to utilize. Many renters use the internet to hunt for houses/ apartments. For Utopia Management, the best websites to advertise listings on are Craigslist, Zillow, and Facebook.

Make sure you provide good quality pictures, useful information, and lots of description.

Tip #4: Work with a Great Team It may sound cliché, but teamwork really does make the dream work. All of the responsibilities that come along with being a property manager are too much for one person to take on. The more resources you have for owners and tenants to utilize, the happier they will be.

One specific system you can use is the tier system: property manager, assistant property manager, and leasing agent.

The property manager will handle all owner related and delicate matters. The assistant property manager will be the main point of contact for all existing tenants. The leasing agent will handle all rental inquiries and schedule all property showings. This way, there is a specific person for clients to speak with and issues are resolved a lot quicker. It is also important to have maintenance, accounting, and insurance departments in order to handle specific issues, respectively.

Client satisfaction is your main goal.

Happy clients mean more business, and more business means more success!

Utopia manages a wide variety of rental property throughout Southern California, including single-family homes, individual condos, apartment communities, office buildings, industrial buildings, commercial centers and accounting for home owners associations. For more information visit UtopiaManagement.com.

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Rental Housing Journal On-Site

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Rental Housing Journal On-Site · July 2017