Bay State Apartment Owner 1Q 2013

FIRST QUARTER 2013

THE

TRILLION DOLLAR APARTMENT INDUSTRY

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www.naahq.org

The Offical Magazine of the Rental Housing Association (RHA), a division of the Greater Boston Real Estate Board and an affiliate of the National Apartment Association

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FIRST QUARTER 2013

THE

TRILLION DOLLAR APARTMENT INDUSTRY

Bay State Apartment Owner is the official publication of the Rental Housing Association. ©2013 The Warren Group Inc. and the Rental Housing Association. All rights reserved. The Warren Group is a trademark of The Warren Group Inc. No part of this publication may be reproduced in any manner without the express written consent of the publisher.

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One Center Plaza, Mezzanine Level Boston, MA 02108 Phone: 617-423-8700 Fax: 617-338-2600

RHA Officers President: President Elect: Vice-President: Secretary: Executive Director:

Lynn Bora Joseph E. McPhee Jr. Gilbert Winn Sarah Mathewson John E. Lafferty

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THE WARREN GROUP Creative / Production / Advertising www.thewarrengroup.com 280 Summer Street Boston, MA 02210 Phone: 617-428-5100 Fax: 617-428-5118 custompubs@thewarrengroup.com

COVER

The Trillion Dollar Apartment Industry

08

CONTENTS

President’s Message

04

Service Animanls:

05

Executive Director’s Message

06

Photo Gallery

12 14

An Honor and a Privilege What You Need to Know Content is Key at NAA Conference

RHA Calendar

First Quarter 2013 • BAY STATE APARTMENT OWNER

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President’s Message

BY LYNN BORA

An Honor and a Privilege

I

© 2013 Brian McCarthy

t is both an honor and a privilege to serve as president of the Rental Housing Association.

The honor is being included in the ranks of the industry leaders who have preceded me. The privilege comes in leading a diverse and engaged membership as together we move RHA forward.

As president, I have the opportunity to articulate my goals for the association, and in concert with the RHA leadership, watch them evolve into our achievements.

My goals for RHA in 2013 will be to grow the membership, develop meaningful educational offerings, recognize professional excellence and give back to the community.

Growth in membership will come from many fronts. First and foremost, we will encourage and support the efforts of the NextGen committee, which through a heavily discounted one year membership, exposed relative new comers to the industry to the benefits of RHA. 2012 NextGen benefits included discounted admission to certain RHA programs and events, member-only education sessions, and social events designed by and for the NextGen peer group. The result was a 20 percent increase in the RHA membership!

On another front, we will build on our success in developing relationships with local colleges.

Our established programs with Bay State College and an emerging one with Johnson & Wales University provide opportunities for job shadowing, curriculum development and leadership programs. As we build awareness of careers in the apartment industry, we gain exposure to an educated and motivated group of professionals who will be entering the workforce

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over the next year. These are the future members of the association and future leaders of the apartment industry.

Meaningful education offerings ensure our member companies realize the value of their membership. We will continue to offer and support the National Apartment Association’s designation courses in marketing, management and maintenance and our Massachusetts specific courses on Fair Housing and Landlord Tenant law. In addition, we are committed to developing timely topics for our breakfast program series, spring marketing event and annual Education Conference.

Annually, the leaders of the multi-family rental industry gather for the RHA President’s Awards, where we celebrate excellence in public service and industry excellence. One of my goals will be to build on our prior success and increase participation at the event.

Finally, I have charged a subcommittee of RHA to examine how we can best give back to the community. We have been fortunate over the years to have had sufficient resources to make significant donations to notfor-profits whose work includes providing housing, the most recent beneficiary being Homes for Our Troops. I firmly believe this is a mission we should continue, the process should be transparent and the results relevant to the membership.

Motivational speaker Earl Nightingale said, “Success is the progressive realization of a worthwhile goal.” With so many worthwhile goals, and such a strong and engaged membership to make them a reality, RHA success on many fronts in 2013 is assured. n Lynn Bora is 2013 president of the Rental Housing Association.

SERVICE ANIMALS: What You Need to Know

BY KENNETH A. KREMS

Y

ou manage a building with a no-pet policy. A resident walks into your office and proclaims that she needs to have a companion animal, a big Siberian Husky, right now. Your inclination is to tell her no way, because you don’t allow any pets, and certainly not a gigantic dog. What should you do?

Recently, there have been many more requests from residents and applicants for service animals. In the past, these primarily involved seeing-eye dogs, but now there are numerous requests for emotional support or comfort animals, which are primarily dogs or cats, but can also be other animals such as birds, monkeys or iguanas.

Various studies have demonstrated that emotional support animals can assist in the treatment of physical and mental illness.

They can help decrease depression, stress and anxiety. An increasing number of hospitals now allow pets on their floors to comfort patients.

A request for a service animal in a no-pet building, or a request for an overweight animal or prohibited breed in a pet-friendly building, triggers fair housing issues. Both Massachusetts and federal law make it unlawful for a landlord to refuse to make a reasonable accommodation in rules, policies, practices or services when the accommodation is necessary to afford a disabled person an equal

opportunity to use and enjoy the apartment. Waiving a no-pet policy, or allowing an overweight animal or a prohibited breed, are examples of reasonable accommodations.

A request for a reasonable accommodation must be considered on a case-by-case basis, and a resident’s need for an emotional support animal may not be obvious.

You should have the resident complete a reasonable accommodation form, and obtain documentation from the resident’s physician as to the resident’s disability, as well as the connection between the disability and the companion animal.

If the physician indicates that a particular animal is needed for the resident’s treatment, you generally have to allow the animal.

But what if the animal is a pit bull or a Rottweiler? These are not just prohibited breeds, but also potentially dangerous dogs. If you encounter this situation, first confirm the need for a service animal and then continue with the interactive process, making it clear that you will allow a service animal but perhaps not a dangerous breed. Place the burden on the resident to demonstrate why he needs this particular animal as opposed to one which is not potentially as dangerous.

It is clear that whether you have a no-pet building or a pet-friendly building, you must allow service animals and overweight and prohibited breeds. Not following the fair housing laws can be costly.

One example occurred in Chelsea a few years ago. A resident of the Housing Authority requested a companion animal for her emotional disorder that caused Continued on page 11 First Quarter 2013 • BAY STATE APARTMENT OWNER

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Executive Director’s Message

BY JOHN E. LAFFERTY

Content is Key at NAA Conference

I

f you have not already made your plans to attend the 2013 National Apartment Association’s Education Conference and Exposition, June 19 – 23, 2013, in San Diego, now is the time. As of our press deadline, the next scheduled price increase is April 20, 2013, so there is still time to do so, and beat the $100 price increase in April. You will be joining over 6,200 industry leading professionals in the biggest industry event of the year.

Content is always key at the NAA Conference, and 2013 is no exception. Let’s start with Sir Richard Branson, Erik Wahl and Bert Jacobs, general session speakers.

Don’t miss this opportunity to see Sir Richard Branson, international business magnate and founder of one of the world’s most recognized and respected brands, Virgin Group, deliver the keynote speech to NAA attendees. Much can be learned from this business icon and his leadership approach.

He’ll share insights into how he’s identified new markets, engaged stakeholders and inspired them to come along with him, and how he’s challenged legacy dominant players to win market share.

Internationally recognized graffiti artist, author and entrepreneur Erik Wahl will delight and move NAA attendees with his on-stage painting that seamlessly becomes a visual metaphor to the core of his message, encouraging organizations toward profitability through innovations and superior levels of performance.

Bert Jacobs delivered a mov-

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ing message at the NAA Education Conference in 2012. Attendees walked away with a gift of positive energy and ideas to improve the strength and meaning behind their brands. He’s back again in a special Saturday session, so stick around and don’t miss this truly unique and successful business executive as he helps you understand how “Life is Good.”

Thought leaders include Vernice Armour, pilot, author and motivational speaker, who ultimately impacts organizations and individuals with an understanding of the passion and leadership required to excel. Through her keynotes, she conveys messages of “Zero to Breakthrough” via her unique insight and life strategy and will help you figure out how to ignite your spark and make your dreams a reality. In addition, Janine Driver, author, media expert and communications trainer, will share her expertise on an elite certification program that offers award-winning advanced communications training that help executives, sales people, and other professionals build executive presence, explode their selling skills, and create and deliver business presentations that win new business.

Make sure to attend the Conference Kick-Off Celebration & Reception on Wednesday, June 19. This celebration has been moved to Wednesday evening to give everyone time to ease into the conference the right way. Firsttimers and veterans alike will

enjoy networking at this fun, fastpaced session. You’ll get information on how you can make the most of your education conference experience and get in the right state of mind for a week of learning. Make new friends, learn how to maximize your opportunities at the conference, and win valuable prizes!

Stick around after the session for a networking reception.

NAA rocks the block with the NAA Opening Party “Sparking Connections” on Thursday, June 20. Be a part of what is sure to be a great and memorable event.

It will be a night to remember as NAA attendees stroll into the historic San Diego Gaslamp Quarter and enter into NAA’s very own private block party as the streets, sidewalks, restaurants and shops will be closed to the public! The NAA Gaslamp Quarter Block Party will take over two full city blocks, which will be filled with food and beverage, live music, theme lighting, and interactive entertainment – just for NAA attendees!

The NAA Gaslamp Quarter Block Party includes 10 restaurants located within the two city blocks of the party and will provide food in the streets as well as in each

of the restaurants. The unique storefronts, wide brick sidewalks, traditional gas lamps and historic architecture of the neighborhood create the perfect backdrop for a spectacular event.

In San Diego, a world of possibilities awaits you. With friendly laidback locals, 70 miles of coastline, spectacular year-round weather, and easy accessibility to beaches, mountains, deserts and a dynamic downtown, your trip planning is only limited by the number of days you have to experience it all. Bring your family and friends and tack on a few extra days before or after the NAA Education Conference & Exposition and enjoy this beautiful region. The San Diego Convention & Visitors Bureau has developed a custom website for NAA attendees at www.meetmeinsandiego.com/ NAA. See you in San Diego in June! n John Lafferty is the executive director of the Rental Housing Association.

Construction Professionals for Quality Residential Development For more information contact Jeffrey Ellowitz / 781.272.9440 / jellowitz@erland.com Erland Construction

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www.masshousingrental.com First Quarter 2013 • BAY STATE APARTMENT OWNER

7

“

The

Trillion Dollar Apartment Industry”

BY STEPHEN S. FULLER, Ph.D.

Reprinted with permission of the National Apartment Association and Stephen S. Fuller, Ph.D., from the February 2013 issue of units.

Despite the worst economy in a generation, the combined spending by the apartment industry and its residents generated $1.1 trillion to the national economy and supported 25.4 million jobs in 2011.

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T

hrough economic highs and lows, the contributions of multifamily rental housing to national, state and local economies have remained a positive, lasting power.

I recently completed research to quantify apartments’ important and sustained economic contributions; the results are featured in the report, “The Trillion Dollar Apartment Industry,” published by NAA

and the National Multi Housing Council. Despite the worst economy in a generation, the combined spending by the apartment industry and its residents generated an economic contribution of $1.1 trillion to the national economy and supported 25.4 million jobs in 2011, the most recent year for which data are available.

To put this number in perspective, that means that apartments and the people who live in them contribute, on average, more than $3 billion a day to the economy.

In addition to covering the economic impact of new apartment construction, existing apartment operations and apartment resident spending activity on the national and state levels, the report also provides measures of the economic impact of apartment construction and operations in select metro areas.

With this information, industry stakeholders and federal, state and local officials can better estimate the substantial, sustained contribution apartments make to their communities and the nation as a whole.

While apartment resident spending activity by far was the largest contributor to apartments’ economic impact, operating, maintaining and improving the nation’s apartment stock also was a significant factor.

In 2011 alone, the industry spent $67.9 billion to operate, maintain and improve apartments. Apartment operations spending directly supported local employment and business activities

across four main categories: building services, including materials and labor costs (42.8 percent); management (27.4 percent); utilities (15.5 percent); and repairs and maintenance (14.3 percent). When the indirect effects of that spending are included, operating, maintaining and improving the nation’s existing apartment stock had a total economic contribution of $182.6 billion.

Apartment operations spending also created $56.8 billion in personal earnings and supported a total of 2.3 million jobs. Apartment firms directly employed workers in 686,000 onsite positions such as property managers, leasing agents and maintenance workers. Apartment operations also indirectly supported nearly 1.7 million more jobs from companies providing goods and services to apartment firms, as well as the people they employ.

First Quarter 2013 • BAY STATE APARTMENT OWNER

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The report’s data also show other key factors demonstrating apartment operations’ importance: • Compared with the economic activity generated by new apartment construction, ongoing apartment operations generated four times the dollars for the economy and supported seven times the jobs.

• Operating 100 apartment homes generates $352,000 in direct spending and supports 8.5 jobs in operations.

• The total impact of just one of the nation’s 17.1 million occupied apartments contributes, on average, $64,327 to the national economy annually.

Boosting Goods and Services, Construction Apartment residents produced a significant economic impact in 2011, beginning with their spending of $421.5 billion on goods and services. Spending of those dollars, primarily in the local economy, strengthened metro area and state economies and supported job growth. As that spending cycled through the economy, it spurred additional spending for a total of $885.2 billion to the national GDP, with an estimated $648.8 billion spent locally.

As the number of renters and renter households continues to grow —as many as 7 million new renter households could be created this decade—America’s apartment residents will become an even more important player in economic development.

Apartment construction has made a significant contribution to the economy even at the below-normal construction levels over the past several years. During 2011, the industry spent $14.8 billion on new apartment construction, generating a total of $42.5 billion to the national economy, adding $12.7 billion in

About This Research Dr. Fuller’s research utilizes a number of government sources, including the U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics and U.S. Census Bureau.

Additional data were provided by NAA’s Survey of Income & Expenses in Rental Apartment Communities. For this report, apartments are defined as residential units in buildings with five or more units. personal earnings and supporting nearly 324,000 jobs. Nearly two-thirds of those jobs were directly supported by apartment construction. As construction activity begins to catch up to demand, the apartment industry will make even greater contributions to the U.S. economy.

As construction rebounds and the number of Americans demanding apartments continues to grow, many states and metro areas will experience significant economic benefits from expanding markets for apartments. As a result, policymakers, community leaders and other industry stakeholders must educate themselves and their peers on the value of the apartment industry to their localities. To undervalue the contributions of the people who build, work and live in apartments is to ignore the opportunity for significant growth that will fuel their future economic growth.

Stephen S. Fuller, Ph.D., is the Dwight Schar Faculty Chair, University Professor and Director of the Center for Regional Analysis at George Mason University.

New Interactive Website to Launch as Part of NAA/NMHC’s PR Campaign “THE TRILLION DOLLAR APARTMENT INDUSTRY: how the apartment industry and its 35 million apartment residents drove a trillion dollar contribution to the national economy” will be available online in its entirety at www.naahq.org/government affairs after Feb. 12.

In conjunction with the release of “The Trillion Dollar Apartment Industry,” NAA and NMHC have created a new website to promote the industry: www.WeAreApartments.org. The site features an interactive map that allows you to view the economic impact of apartments in all 50 states plus the 12 metro areas in the report: Atlanta, Boston, Chicago, Dallas, Denver, Houston, Los Angeles, Miami, New York City, Philadelphia, Seattle and Washington, D.C. The website, which goes live in midFebruary, also allows you to download and print a PDF of the economic impact 10

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of apartments by state or select metro areas that you can take with you to any meeting. Or, you can send people directly to their own state with a special link.

In addition, the website features ACE, the Apartment Community Estimator.

This calculator allows users to enter the number of apartment homes of an existing or proposed community to determine the potential economic impact within a particular state. For example, if you have a proposed project in North Carolina, you can enter the number of units planned and ACE will calculate the potential economic impact and jobs from apartment construction, operations and resident spending that will stay within your state. You can also print a PDF of the calculation to take to your local planning meeting.

The second phase of the website, the “story portion,” will launch in March.

With the story portion, NAA and NMHC

are taking an innovative and unconventional approach to create some “buzz” for the industry. In an almost video game format, the story portion will allow users to “walk” through a community and see all the ways the apartment industry makes it stronger.

Stay tuned for much more this spring.

The economic impact report and joint website kick off NAA and NMHC’s major public relations campaign. Its goal is to ease the legislative and regulatory environment for our industry by communicating apartments’ many benefits to Americans and to the communities in which they live.

Questions: Contact NAA’s Carole Roper at carole@naahq.org.

SERVICE ANIMALS

continued from page 5 migraines, anxiety and depression. Her physician supported her request. The authority allowed her to have a dog, but not a German shepherd, which far exceeded the 20-pound weight limit. The attorney general sued, asserting that enforcement of the weight limit constituted a failure to reasonably accommodate her disability. The authority settled the case, allowing her to have the German shepherd and paying $78,000 in damages.

However, the law does provide that a resident’s request for a reasonable accommodation which results in an undue hardship to the landlord, or a direct threat to other individuals, need not be granted, so a service animal must not cause serious problems for other residents.

If it bites or threatens other residents, or barks incessantly after warnings, you can inform the resident that he or she must remove the service animal, but may replace it with another animal that will abide by the lease. If the resident refuses, you may be able to commence eviction proceedings, depending upon the specific circumstances.

Similarly, the resident must take proper care of the animal. It must have all required vaccinations and licenses, and dogs must be kept on a leash. The resident is liable for any damage the animal does to the unit or any common areas.

If you allow pets and charge monthly pet rent, remember that you cannot charge anything for a service animal because it is not considered to be a pet.

In the future there will be an increasing number of requests for all kinds of service animals. When dealing with these requests, you must follow fair housing laws so as not to open yourself up to a claim of discrimination. By knowing the proper procedures and carefully considering each request, you can keep your building running smoothly while protecting the rights of those who are entitled to have a service animal. n Kenneth A. Krems is a partner in the Boston law firm of Shaevel & Krems, LLP, where he focuses on residential and commercial real estate management and other real estate issues.

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President’s Awards Dinner December 4, 2012 The State Room, Boston

DECA Professional Development Day: 4th Annual DECA Professional Development Day Bay State College

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First Quarter 2013

catch the wave of

success

come to San Diego for innovations, connections, and inspiration!

Don’t miss out on: Sir Richard Branson, Founder, Virgin Group, and one of the most successful businessmen of this generation who will share insights from his experiences.

More than 350 suppliers who will be demonstrating innovative gadgets, goods, and services on the market.

50 breakout sessions led by inspiring industry experts.

Exciting networking events where you’ll connect with some of the 6,200 conference attendees.

FOR MORE INFORMATION REGARDING UPCOMING RHA PROGRAMS AND EVENTS, PLEASE VISIT

WWW.GBREB.COM/RHA.

JUNe 19–22, 2013 I SaN DIeGo, ca RegisteR toDay at www.naahq.oRg/aDunits First Quarter 2013 • BAY STATE APARTMENT OWNER

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2013 March - May Certified Apartment Manager (CAM) Norwood Gardens March 10 – 13 NAA Capitol Conference Omni Shoreham, Washington D.C. March Certified Apartment Portfolio Supervisor (CAPS)

April 9–12 May 7–10 Certificate for Apartment Maintenance Technicians (CAMT) ARS Restoration Specialists, Newton April RHA Breakfast Series May Spring Marketing Event June RHA Spring Golf

March NextGen Night Out

June NextGen Gathering

April 2-4 National Apartment Leasing Professional Greater Boston Real Estate Board

June 19 – 23 NAA 2013 Education Conference and Expo San Diego, California

July RHA Breakfast Series

October Landlord Tenant Law

July 9 RHA Business Exchange benefitting the NAAPAC

October NextGen Career Panel

August RHA Affiliate Event

November NAA Assembly of Delegates

September NextGen Gathering

November NextGen Holiday Party

September 27 RHA Fall Conference and Expo Hynes Convention Center

December 12 RHA Presidents Awards Renaissance Waterfront, Boston

October RHA Breakfast Series

December NextGen Gathering

October RHA Fall Golf

Where indicated, dates and locations are subject to change.

For additional information, visit www.gbreb.com/rha.

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