Bay State Apartment Owner 4Q 2012

FOURTH QUARTER 2012

ENERGY MANDATES SPREADING ACROSS THE COUNTRY

COULD

BOSTON BE NEXT?

Three Times The reach!

reaDershiP

Bay State Apartment Owner magazine now reaches Three Times the amount of Massachusetts landlords.

*Apartment owners *Property managers *Condominium managers *Subsidized housing owners *Rental and condominium property developers *REALTORS® *Brokers and rental agents *Service providers

With the addition of 1,000 aParTmeNT OWNers to the Bay State Apartment Owner mailing list, you have the potential to reach 1,525 targeted multiunit property owners. In total distribution, your message can reach mOre ThaN 8,000 TarGeTeD PrOsPecTs within a content-rich publication.

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Publisher of banker & Tradesman

FOURTH QUARTER 2012

ENERGY MANDATES SPREADING ACROSS THE COUNTRY

COULD

BOSTON

BE NEXT?

Bay State Apartment Owner is the official publication of the Rental Housing Association. ©2012 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.

A division of the

Greater Boston Real Estate Board

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:

Karen Fish-Will Lynn Bora John Keith Gilbert Winn John E. Lafferty

COVER

Energy Mandates Spreading Across the Country Could Boston Be Next?

08

Published By

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

CONTENTS

President’s Message

04

Executive Director’s Message

06

Photo Gallery

12 14

A Great Year for RHA

Online Market Survey is Here!

RHA Calendar Fourth Quarter 2012

•

BAY STATE APARTMENT OWNER

3

President’s Message

BY KAREN FISH-WILL

A Great Year for RHA

A

s this issue of Bay State Apartment Owner goes to press, I near the end of my term as president of the Rental Housing Association. I have a new level of appreciation for the hard work of my predecessors and I am ready to assist my successor in any way possible. Great satisfaction, however, comes in looking back over the year, and seeing what we, as an association, have accomplished.

Thanks to the leadership and direction of the NextGen steering committee, RHA recruited over 100

new members, individuals who we were not formerly serving.

The “test drive” was a deeply discounted membership, which allowed participants to receive all of the benefits of RHA and NAA membership, plus access to NextGen-only events, including the quarterly gatherings, a night out at Dave & Busters, a career panel and discounted admission to RHA events.

RHA substantially expanded its services to its members. The Education Committee unveiled the “Breakfast Series,” a number of morning programs targeting site staff on topics such as disaster planning, marketing and mobile communications. The

Affiliate Council executed a highly successful affiliate signature event this summer, with over 300 people attending a tailgating party prior to a soccer double-header at Gillette Stadium.

In the fall, we launched the Rental Housing Association’s online market survey. To participate in this free service, all one needs to do is visit the RHA website, enter data about their property and update rental information. Participants can then access comp reports on their competitors, saving the time and expense of having to call around every week for comparable rent data.

Some of the activities undertaken by RHA were done

To learn more, visit the site or contact Brian O’Connell at

boconnell@masshousing.com or 617.854.1198

Go online with MassHousing!

More information, easier than ever to use.

www.masshousingrental.com 4

BAY STATE APARTMENT OWNER

•

Fourth Quarter 2012

Loan inquiry Online trainings via WebEx Occupancy agreements in 9 languages A huge library of documents Resources on issues such as hoarding and conflict resolution …and much more!

to benefit people outside of our local association. In June, RHA served as Host Committee for the National Apartment Association’s 2012 Education Conference and Exposition. Over 250 individuals associated with RHA member companies, helped more than 6,000 NAA conference attendees by providing directions, fielding questions and setting a positive mood to the conference.

Three months later, several RHA members hosted visitors from the Federation of Rentalhousing Providers of Ontario as they toured a variety of multifamily properties here in Boston. Many of our Canadian friends stayed on for 2012 Expo, RHA’s Conference and Tradeshow.

In 2012, we also began to put in place a concerted plan to boost awareness of apartment industry careers. Starting with Bay State College, RHA members participated in the Deca Professional Day, they described their career paths during a business class, and offered job shadowing opportunities to undergraduates. In the fall, RHA member companies staffed a booth at a career fair held at Johnson & Wales, raising awareness of careers in the apartment industry and identifying candidates for future job shadow opportunities.

And that is just some of the new things we accomplished!

RHA continued to deliver in the areas of advocacy, education and networking, making 2012 one of our best years ever. It has been both a pleasure and honor to serve as your president. Thank you for that opportunity. n Karen Fish Will is 2012 president of the Rental Housing Association and president of Peabody Properties, Inc.

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•

BAY STATE APARTMENT OWNER

5

Executive Director’s Message

BY JOHN E. LAFFERTY

Online Market Survey is Here!

T

he Rental Housing Association (RHA) partnered with Orlando-based MyRentComps to offer Massachusetts properties the ability to do free weekly market surveys online with their local comps, saving both time and money.

According to MyRentComps, one property manager tracked how much it cost to have a manager call around for current market information on a weekly basis. It was costing her company $3,900 per year, not including the cost of answering market survey calls that came in from other apartment communities, or filling out fax information for the litany of industry insiders who require your information.

One of the most significant aspects of the free online market survey is that there is no expenditure asked of the management companies or apartment owners.

It is a vendor-sponsored website which is available for free statewide.

Once your onsite personnel enter the property data, they will be able to participate in the online market survey and invite up to 10 of their comps to participate as well. For regional managers, senior management and owners, one of the best things about this survey system is that they have the ability see the information on all of the apartment communities that they manage across the state and view the market survey information for the comps of each of their properties as well.

Once we reach 80 percent market participation, RHA hopes to offer timely, affordable aggregated market survey reports for the local market area. Not only will senior management have access to local comp information on a weekly basis, but MyRentComps will semi-annually produce aggregated analysis of average rents and occupancies by unit type and other information at the association, region county and submarket. For that reason, it is vitally important for owners and upper management to encourage their properties to participate in the RHA online market survey.

Visit www.gbreb.com/rha

Participation could not be easier. To begin, simply go to the RHA website, at www.gbreb.com/ rha, and click on the “Blue Market Survey” button. Once you get to the RHA online market survey login screen, click on the “Become a Free Member” tab and fill out the information about you and your property. Sit back and wait for a call from the RHA online market survey support team that will get you connected to your property and answer all your questions.

Once your property is set up, make sure your comps know about this free service. It is easy to invite your comps to participate directly in the online marketing survey system, using the automated email template which is sent from the system.

Live webinar training is available, just by visiting the online market survey login screen and clicking on the “MyRentComps Weekly Webinar Training Series.”

Here you will find live weekly webinars available at a date and time that is convenient for you. And if you still need a little extra help, the online market survey support team is available at support@ myrentcomps.com.

It all begins by clicking the Blue Market Survey button on the RHA webpage. n John Lafferty is the executive director of the Rental Housing Association.

6

BAY STATE APARTMENT OWNER

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Fourth Quarter 2012

BUILD IT AND 300,000 JOBS WILL COME. WHEN WE BUILD APARTMENTS, WE GROW OUR LOCAL ECONOMY. 300,000. That’s the enormous number of new jobs the apartment industry will create this year. Jobs in construction, operations, leasing, management and skilled trades make this the welcome good news that directly impacts your community.

After all, every 100 apartments built mean, on average, 116 new full-time jobs. $5.5 million in wages. And $3.3 million in combined federal, state and local tax revenue and fees.

Bring this success home. Up to half of all new households this decade will be renters – not necessarily because they have to,

but because they want to. In fact, 86 percent of household growth over the next three decades will be those without children – young professionals and empty nesters, the people most likely to choose apartment living.

With your help, the apartment industry stands ready to meet the demand of people in your community who want apartments – and the people who want the local jobs from building them. It’s time to rethink our public policy. It’s time to support apartments, and the jobs they generate, in our communities.

www.nmhc.org

www.naahq.org

APARTMENTS CREATE JOBS THAT LIVE HERE.

ENERGY MANDATES SPREADING ACROSS THE COUNTRY

COULD

BOSTON

BE NEXT?

BY SCOTT VAN VOORHIS

PAULA CINO

GREGORY BROWN

SHAUN PHARR

JOSEPH PUCKETT

F

rom Washington D.C. to Washington state, apartment building owners are suddenly finding themselves thrust into the brave new world of energy scoring.

City officials across the country have been busy rolling out new green regulations that would require owners of multifamily rental properties to closely track their energy usage and report it for the public and prospective tenants to see. But while the proposals may seem harmless, building owners around the country say complying with the new rules can add yet another burden, requiring countless hours collecting detailed utility information from tenants.

In fact, the end result threatens to be anything but a win-win for apartment owners. Too often local officials are looking to these new scoring systems as a modern version of the old scarlet letter, aiming to shame owners of older and less efficient buildings into undertaking expensive improvements, industry experts say. Worse, some industry officials fear the scoring systems may simply be the first step towards mandates by local officials that would require owners of less energy efficient buildings to make costly improvements.

“City and state governments are not awash in money to give out [tax] incentives,” said Gregory Brown, vice president of government affairs for the National Apartment Association. “They may say ‘do it or I am going to penalize you.’”

Jumping on the Energy Scoring Bandwagon After initially rolling out rating systems for commercial buildings, a number of cities are now trying to extend these new scoring systems to residential buildings. Washington D.C., Seattle, San Francisco, New York, Chicago and Austin are among the cities that have been out front pushing for energy scoring.

Washington was the first in the country to vote in a scoring system, starting with commercial buildings in 2008. The city then extended it to residential buildings in 2010, said Shaun Pharr, senior vice president of government affairs with the Apartment & Office Building Association of Metropolitan Washington.

The only saving grace has been the slow pace at which Washington officials have moved to roll out the system, with plans for a website that would allow tenants to compare the energy ratings of various buildings nowhere near ready to roll out.

“They have green blinders on in this city,” Pharr said.

Seattle officials passed their own energy scoring ordinance two years ago, with the new regulation kicking in Oct. 1, said Joe Puckett, government affairs director for the Washington Multi-Family Housing Association. Building owners now have to report their energy use yearly to the federal Environmental Protection Agency, which works with the local utility company to produce a report scoring the building’s energy use.

Continued on page 10 Fourth Quarter 2012

•

BAY STATE APARTMENT OWNER

9

ENERGY MANDATES

continued from page 9

Added Burden The idea of energy scoring may seem like a consumer and environmentally friendly slam-dunk. But it is anything but that say trade groups representing rental property owners.

For starters, simply gathering all the energy information on a building can be a painstaking, laborious task for building owners. In the Washington area, building owners are faced with prying loose sensitive utility billing information from various apartment renters. Just collecting and collating dozens and sometimes hundreds of utility bills can be an added burden on already busy residential building owners and managers, experts say.

“You need to have the resources and staff to gather this information and put it into the format these jurisdictions are asking you to use,” said Paula Cino, senior director of energy and environmental policy at the National Multi Housing Council. “That can be a very onerous process.”

Other cities, like Seattle and Chicago, have resolved this issue by enlisting the help of their local utilities, getting them to provide the energy data on various build-

10

BAY STATE APARTMENT OWNER

•

Fourth Quarter 2012

ings to city officials, but this system has yet to be road tested.

“The red tape won’t be too horrible if it works the way they say it will,” Puckett said.

Devil in the Details However, even with all the information in hand, there are also serious questions about whether it is currently possible to devise a fair way of rating and comparing residential buildings on their energy use.

The Environment Protection Agency’s Energy Star system has been in place for commercial buildings for years, but cities like Washington are mistaken if they think it can be easily modified for use in residential buildings, Pharr contends.

Commercial building owners are likely to have advantages in monitoring and controlling the energy use of their tenants, which is typically spelled out in a lease. It’s also easier to keep heat in during the winter and cool air in the summer, with simpler building envelopes to seal off and insulate. But apartment building owners may be dealing with dozens, if not hundreds, of tenants, each setting the thermo-

stat to his or her personal preference. One tenant may be energy conscious, but another may be running multiple TVs and computers all at once, Brown said.

“People talk a lot about building envelopes, making tighter envelopes, and that’s fine. So say we make a building that is hyper-efficient and the tenant has three television sets and likes to run them all day. How does an owner control that?” Brown asked.

Apartment buildings can be harder to compare, with modern buildings likely to come out ahead in any energy scoring system compared older rental properties.

“It would be difficult if not impossible to compare one property to another because of age and other factors,” Joe Puckett.

It may also be difficult to decide how to rate garden-style developments, which may have a dozen or so smaller buildings. Should each building be scored individually, or should the entire complex be lumped together? Moreover, owners of older, rent controlled buildings, which the metro Washington area has quite a few, would face added challenges, Pharr said.

“No one is at liberty to make

capital improvements and pay for them through rents,” he said.

Mandates Next?

Building owners fear the new energy scoring systems may wind up being used as a cudgel against them to make expensive improvements.

In an era where all things are green, a low score could act as a “scarlet letter,” forcing a building owner to take on extensive renovations or risk losing potential renters.

It could also scare off investors looking to buy an apartment building as well, Cino notes.

“What their scoring proposals are driving towards is a shaming system that identifies those properties that are poor uses of information and forces them to improve,” she said.

And some industry observers fear that energy scoring is but a first step towards what could be an even more onerous and expensive regulatory system. In particular, once government officials have the data on hand to make superficial comparisons on energy usage by different buildings, a next logical step may be to mandate improvements.

Puckett in Seattle is worried that such a scheme may already be taking place. He notes that state lawmakers are discussing proposals to give tax incentives to residential building owners who make improvements.

That is a first for Seattle, which has given incentives to individual homeowners, but never to apartment building owners.

Puckett fears the carrot will be followed by a stick – actual mandates for properties which don’t make improvements. While efficiency boosters like to say new windows and insulation will save money, there is still the small matter of coming up with the money to do the work. And the payoff may be over 20 years.

“We certainly have concerns that this is going to end up in some kind of mandatory retrofit,” Puckett said.

“They have never seen fit to give any kinds of incentives for multi-family property owners.” n

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Fourth Quarter 2012

•

BAY STATE APARTMENT OWNER

11

2012 XPO

RHA Multifamily Conference & Expo September 28, 2012

12

BAY STATE APARTMENT OWNER

•

Fourth Quarter 2012

NextGen Panel October 18, 2012

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Fourth Quarter 2012

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BAY STATE APARTMENT OWNER

13

December 4, 2012

March 10 – 13, 2013

May 2013

September 27, 2013

RHA President’s Awards Dinner The State Room, 60 State Street, Boston

NAA Capitol Conference Omni Shoreham, Washington D.C.

Spring Marketing Event NextGen Night Out

RHA Fall Conference & Expo Hynes Convention Center

January 2013

NextGen Gathering

RHA Breakfast Series

April 2013

RHA Breakfast Series

February 2013

Fair Housing

April 2-4, 2013

February 28, 2013

NAA Maintenance Mania® The Lantana, Randolph, MA March 2013

National Apartment Leasing Professional Greater Boston Real Estate Board April 9 – 12 & May 7 – 10, 2013

Certified Apartment Manager (CAM) March 2013

Certified Apartment Portfolio Supervisor (CAPS)

Certificate for Apartment Maintenance Technicians (CAMT) ARS Restoration Specialists, Newton

SERVICE GUIDE DIRECTORY Real Estate and Financial Information

Trusted Real Estate & Financial Information The Warren Group 280 Summer Street Boston, MA 02210

617.428.5100 617.428.5118 www.thewarrengroup.com 14

BAY STATE APARTMENT OWNER

June 2013

March 2013

•

Fourth Quarter 2012

October 2013

RHA Spring Golf RHA Breakfast Series NextGen Gathering

RHA Breakfast Series October 2013

NAA 2013 Education Conference and Expo San Diego, CA

RHA Fall Golf Landlord Tenant Law NextGen Career Panel

July 9, 2013

November 2013

NAA Assembly of Delegates NextGen Holiday Party

RHA Business Exchange Benefitting the NAAPAC August 2013

December 2013

RHA Affiliate Event

RHA Presidents Awards NextGen Gathering

September 2013

NextGen Gathering

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