The multifamily housing industry has a large influence on the Georgia economy. This sector of the housing market makes up approximately 21% of all residential units in the state of Georgia. According to the 2000 U.S. Census, Georgia ranks 11th in the nation in terms of total number of apartment units. As a symbol of the rising influence of the industry, Georgia also ranks fourth in the nation for new apartment construction. In addition, many multifamily unit owners and operators are members of the Georgia Association of REALTORS®.
In early February, a focus group sponsored by the University of Georgia’s Department of Housing & Consumer Economics was assembled in coordination with the department’s development of a new program in Residential Property Management (RPM). The focus group comprised ten professionals with diverse backgrounds and jobs within the multifamily housing industry. Participants included: a) owners/operators of multifamily properties, as well as fee-based management professionals; b) owners of both large and small properties; c) owners of low-income units and luxury units; and d) people involved with the day-to-day operation of properties, as well as people involved with support services (such as legal and marketing services) for the multifamily industry.
The focus group’s main purpose was to help the Department of Housing & Consumer Economics better determine the types of issues that UGA students first entering the field of residential property management likely will encounter, including issues related to fair housing. Several concerns among industry professionals prompted the development of the RPM program at UGA. For example, one of the most vexing problems within the property management profession is the constant turnover, which is seemingly at an all-time high, with employee retention at an all-time low. Additionally, due to government regulations, among other things, owners of multifamily structures now require more from the on-site personnel and management than they have in the past. One of these government regulations has been the enactment of the various fair housing laws and regulations with which multifamily property owners are expected to comply. These acts include, but are not limited to, the Federal Fair Housing Act, the Americans with Disabilities Act, and Georgia’s Fair Housing Law.
Focus group members cited a variety of reasons as to why residential property managers have had difficulty complying with fair housing laws and regulations. The reasons stated cover areas such as: a) the concept of operational consistency; b) issues that arise in relation to Hispanic populations; c) the complexities of managing inner-city properties; d) the role of technology in training; and e) trends in hiring.
First, an overriding concern of all the property managers in the focus group was the need to provide consistency of operations. Many times, though, inexperienced residential property managers do not entirely grasp what “consistency” means. Some new managers may equate the concept of “consistency of operations” to the need to do the same thing every time in each aspect of the one’s daily tasks. However, there actually exists a degree of flexibility that allows residential property managers to operate within the context of the fair housing laws while also exercising good business judgment in the process. New property managers should be educated about ways to balance these two concerns.
The second concern that was apparent in the focus group dealt with issues that surface in relation to Hispanic populations. During the 1990s, the Hispanic population in Georgia started to explode. At the time of the 2000 U.S. Census, the Hispanic population in the state of Georgia was approaching one half of a million people, which is over five percent of the state’s population and is about four times the size of the Hispanic population in Georgia in 1990. This rapidly growing population has many implications for property managers’ jobs. Many of the focus group participants admitted that there was still not enough known about the Hispanic population to market effectively to that group. Thus, educating the new crop of residential property managers on reaching out to Hispanics will first involve management’s ongoing education of what drives the Hispanic market. Based on their experiences, the focus group members were able to make some suggestions. The need for bilingual property managers is of paramount importance. Ideally, more Hispanic people could be hired into the profession. At the very least, more college-educated bilingual individuals need to be hired.
The language barrier is only one of the hurdles that residential property managers have to face in relation to Hispanics. Some cultural barriers may also interfere with the actual operation of the property. For example, members of some ethnic groups—including Hispanics—often are averse to turning on the air conditioning in their units. While this may not have any short-term effects, in the long run, such behavior can lead to the growth of mold. Proper education on the part of the residential property manager could prevent such problems from occurring.
Other examples of Hispanic-speaking individuals clashing with American standards involve seemingly innocuous things, such as leaving trash on balconies, rather than placing it inside a dumpster. In some instances, property managers may feel that they are marketing to the needs of the Hispanic community, but they misjudge the community’s wants or needs. In one specific example, an apartment owner bought a bulk cable package offering five different Spanish-language channels, thinking that he had done a thorough job of catering to the needs of Hispanic residents. In reality, there were other cable packages that were more desirable for his residents, which ultimately hurt his marketing efforts.
Many multifamily property owners do not realize that there are many different Spanish-speaking cultures that reside in multifamily property units. Activities and/or amenities that work well within, say, a Mexican-American environment, do not work as well in a unit predominantly occupied by South American immigrants. Therefore, new property managers should be educated about cultural and ethnic differences and possible ways of addressing these differences. Another issue mentioned by the focus group is that certain cultures will not live with certain other cultures. So, in some respects, different Spanish-speaking populations self-select where they live, and there is minimal impact that a property manager can have on integrating these various cultures.
One final thing that was noted the focus group members was the difficulty that managers have running inner-city “C” type properties. The challenges of running an inner-city property, as opposed to garden-style suburban properties, are much more numerous and broader in scope. The main stumbling block is the regulatory environment, which is more draconian in a property where residents with federal government assistance live. As a result, training new prospects in the property management field involves a lot more effort in type “C” government-assisted properties than in other properties; frustration may set in with trainees assigned to inner-city properties. Furthermore, when management companies attempt to manage both types of properties, they are prone to have limited success in doing so. Specialization among property types usually is the ingredient needed for success in the property management field, including compliance with fair housing laws.
Apartment owners and managers are also wary about the role that technological advancements can play in training property managers on fair housing issues. There have been many promising on-line training tools that have proven effective in educating managers about the day-to-day activities regarding leasing, maintenance, budgeting, and marketing. When it comes to training on fair housing issues, however, the various situations that property managers may face on the job warrant more of a case-study approach or perhaps role-playing exercises, which are better suited in a face-to-face environment than on-line.
Because the role of the property manager is becoming more specialized, there has been a shift in companies’ hiring practices within the multifamily industry, which may work against attempts to achieve fair housing objectives. Much of the industry’s roots came from the tradition of hiring property managers from among a property’s residents. This method of hiring was not necessarily bad for servicing the needs of the residents, despite the fact that these property managers often did not have a college education. As the desired skill set and education level of the residential property manager position increased, however, the method of hiring entry-level personnel necessarily shifted. Now, an increasing number of universities are offering majors in Residential Property Management, which creates a more specialized workforce. While the connections with the residential community may appear to have been taken away due to this transformation in hiring, the residential property manager can, in fact, learn the diversity needs of any property. Doing so, however, requires new managers to gain extensive exposure to the property and its residents, either by completing an intensive internship program or by moving to the property after being hired.
A few of the focus group members suggested that the image of multifamily developers (and thus, indirectly, the property management industry) has suffered, which hurts the populations residing in these units. Part of this image problem was due to the industry’s lack of an effective marketing strategy, a condition that the apartment industry in Georgia has been attempting to redress over the past few years through more intensive lobbying efforts in the legislature. Despite these efforts, there still exists a mindset among lawmakers that tends toward preferential treatment of single-family homeowners, who have been shown to vote in greater numbers than their apartment-dwelling counterparts.
The feeling of inferiority within the multifamily industry is only exacerbated by the implication made by some lawmakers that these properties do not pay enough of their fair share of property taxes for the types of services that they receive. Despite positive strides gained within the state, the effort to rehabilitate the image of multifamily housing and its residents is still considered by the focus group to be an uphill battle. Therefore, in spite of fair housing legislation that has been enacted, multifamily housing as a whole faces some amount of discrimination from society.
In total, the residential property management profession has some unique diversity issues of its own, separate and apart from those encountered in the single-family sector. Nearly all participants in the focus group believed that addressing diversity concerns ultimately benefits the profession itself. Far from simply addressing social objectives of inclusion, catering to the needs of different ethnic and racial groups is considered a good business practice as well. In order to address fair housing concerns and manage properties well, however, new residential property managers must be educated about the changes within their industry, and that education must happen in the most effective ways, such as with case studies and through on-site exposure to properties.
Andrew Carswell, PhD, is an Assistant Professor in the Department of Housing and Consumer Economics at The University of Georgia. Stephanie Vanderford is a doctoral candidate in the Department of Housing and Consumer Economics at The University of Georgia.