Liberty and housing for all

First published 2009 May

The government housing specialist, whose company today operates 40,000 apartments across the country and has contracts with Uncle Sam to do complete residential makeovers at five military bases, was lured into real estate by a $300 commission.

"I thought that was all the money there was in the world," he said in an interview in May, recalling the summer job with his father's real estate company, after his junior year in pre-law at Dickinson College in Carlisle, Penn., in 1954. "I sold a house and that $300 commission changed my life. I wondered, why in the world did I want to be a lawyer I should be in real estate," said Levitt.

Fifty-five years later, Levitt's organization consists of a squadron of seven affiliated real estate service
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Truth be told

First published 2009 May

Consumer confidence jumped in May, the most in six years, causing some to think economic revival is just around the corner.

The hope is that consumers, who account for 70 percent of the economy, will finally begin to spend. And while unemployment, real estate values and dampened credit remain a focus in a number of markets, pent-up demand continues to grow with each passing day. This looming “pop” is expected to be immediate and sharp, as retailers have kept inventories meager. As such, any sudden demand would vibrate immediately through the economy.

Right on target, according to multifamily guru and chairman of Equity Group Investments, Sam Zell, who last year said we'd clear this “malaise” by Q4 2009. There's now broad consensus on th
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Memphis multihousing sweet spot

First published 2009 May

"Don't feed the rent monster," said Fogelman Properties President and COO Mark Fogelman, recalling the slogan on fliers circulated throughout the mid-2000s. "He actually had a picture of a monster taking money out of a couple's pockets."

Times change.

Today's monster is foreclosure. The relevant picture might be of a couple hanging upside down on their front porch, their last coins falling from pockets turned inside out.

"We overbuilt here on the residential side, but it's hard to overbuild on the multifamily side because lenders are more conservative," said Steve Woodyard, president of Woodyard Realty, a brokerage for multifamily real estate.

"From an operations perspective, we think multifamily will hold up better than the other r
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Your memory may not be so bad after all

First published 2009 May

As explicit discrimination has receded in the last two decades, culminating in the elevation of an African-American to the Presidency, a woman to the House Speakership and a black woman to the galactic dominance known as being Oprah Winfrey, those who study the effects of racism and sexism have had to cope with a difficult question: If discrimination is less powerful, why do some groups in society continue to fare worse than others Has bias merely become better hidden, or are there other forces at work

One theory that has gained influence among sociologists is that some members of stigmatized groups, when faced with stressful situations, expect themselves to do worse -- a prophecy that fulfills itself. These expectations, which can occu
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Mastering the complex lease

First published 2009 May

Every sale is not a good sale. About 35 percent of all sales are bad sales. In one way or another, they leave the customer disappointed or the seller with excess costs and diminished returns. Often salespeople are so concerned with "getting the order" that they write business that is not good for themselves, their company or the customer.

Walking away from a situation that is not profitable for anyone is the right thing to do. It requires that the salesperson become comfortable with both hearing and saying "no" and moving on to the next opportunity. When professionals move on, they open themselves more quickly to higher levels of opportunity and success.

Spectacular success is always preceded by unspectacular presentati
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Mortgage investors fear safe harbor law
First published 2009 May
As part of a larger housing bill, President Obama signed a provision granting special legal protection to mortgage servicers that modify loans under the administration's Making Home Affordable plan and the Federal Housing Administration's foundering Hope for Homeowners program.

Advocates say giving servicers more legal protection will decrease the number of unnecessary foreclosures, mitigating the next wave of defaults that are expected to hit in the next few years. Safe harbors "ensure a more efficient process for assisting troubled borrowers," says John Courson, president of the Mortgage Bankers Association.

Mortgage investors don't like modifications because lower interest payments for borrowers means less money or even losses for th
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All that Twitters isn't gold
First published 2009 May
The world may be buzzing about Twitter, but will the San Francisco- based messaging service with the high cool factor ever be a money maker Or will it operate at a perpetual loss, as one Wall Street analyst suggested, "until the next cool Web 2.0 social networking concept comes along and Twitter tweets no more."

Just three years old, the free service, which allows its users to send messages of up to 140 characters, is the Internet's fastest growing social networking site, according to the research firm, Nielsen.

Unique visitors to Twitter's Web site skyrocketed from 475,000 unique users in February 2008 to more than 7 million in February 2009. And those statistics don't count people using the service on their mobile phones.

Twitte
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Social networking: the good, the bad and the presumptuous
First published 2009 May
This is tough on those with a solid foundation in market messaging; those doing good things with modern technologies around the age old concepts of market "conversations" or word of mouth.

Ten years ago the book, The ClueTrain Manifesto put forward ninety- five theses, essentially expanding on the following:

A powerful global conversation has begun. Through the Internet, people are discovering and inventing new ways to share relevant knowledge with blinding speed. As a direct result, markets are getting smarter — and getting smarter faster than most companies.

The ClueTrain Manifesto was written in the era of email and mailing lists, news groups, chat/instant messaging and, of course, Web pages; it was conceived during the heig
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The power of leasing remains with integrated media
First published 2009 May
"We track our lead generation," says Peggy Hale, director of sales, marketing and training for Morgan Properties of King of Prussia, Penn., ranked 30th largest multifamily owner/operator in the country with 31,238 units. "During Q1 2008, we found that 87 percent of all new prospects made their initial contact with us through the Internet." She shares how this information was beneficial in optimizing her 2009 Apartment Guide print strategy to more effectively integrate with other marketing, including Internet and mobile solutions.

"First quarter results showed that our Apartment Guide print buys were generating leads, and drew even stronger results when combined with other Internet-based products. In combination, they are our number one so
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Don't train. Empower.
First published 2009 May
No matter how good the material or engaging the presenter, employee training often fails to produce the desired return on investment. And, if companies don't measure the effectiveness of their training, they'll never know why their programs aren't working.

While it is commonly recognized that training is a critical component of operations, most companies are unable to evaluate their training beyond the first two Kirkpatrick levels, simply because they lack the data collection tools to make higher level evaluations.

CallSource, which has been tracking and evaluating industry statistics for nearly 15 years, recently achieved level four training with Results, the company's own integrated marketing analysis and sales training system that in
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Opportunity amidst challenges
First published 2009 May
Fortune smiled on The Bozzuto Group in this economic downturn. The company not only had no projects scheduled to start in 2009, its subsidiary Bozzuto Management Company took home the Pillars of the Industry Property Management Company of the Year award last March, in the midst of an economy that allows little else in the way of adding value.

"I guess we just got lucky to have a number of projects under construction that started in 2008 and we have projects in our pipeline that we are hoping we will start in 2010," The Bozzuto Group CEO Tom Bozzuto said in an April interview.

"And that is really fortunate because I'm not sitting here beating my head on the ground because I can't get financing," he said of the serendipitous timing of the
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The inside on outsourcing
First published 2009 May
Given the finance-starved state of development and the number of layoffs, abandoned projects and impairment charges that have hamstrung apartment companies this year, CAS Construction's 80 percent reduction in workforce would appear to make good fiscal sense.

"Due to the economic times, capital projects can not get funded and at CAS Construction we had a cadre of people on the bench. So we went through and really right-sized the organization to current projects and current demand, yet I think we took a very conservative approach,"

CAS Partners CEO Toni Portman told MHP on May 22.

CAS Construction remains open, but 28 of its 35 employees are gone.

"It was a tough choice but, quite frankly, we just didn't have the demand. What we'
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Marketing makeover
First published 2009 May
Even though times are tough, this is not the time to cut back on marketing, veteran multifamily experts say. Apartment companies with decades of experience and good track records for riding out economic storms, like the Michaels Organization and The Bozzuto Group, recognize that reality and recently responded by hiring new VPs of corporate marketing in the spring.

"Despite the economic downturn, our third-party management and construction business lines have experienced strong growth," said Tom Bozzuto, CEO and co-founder of the 21-year-old, Greenbelt, Md.-based The Bozzuto Group, when Jamie Gorski, who has more than 25 years of multifamily marketing experience, joined the privately-held real estate services organization last April as sen
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Goodwill hawking: Morgan Management
First published 2009 May
Several newspapers, for instance, wrote about Rochester, NY-based Morgan Communities' No Fear Lease, a warranty of sorts, which the company had printed on parchment paper, that gives new and renewing renters the option to break their leases if they lose their jobs, or to continue to rent at a 20 percent discount for up to three months while they search for new employment.

When Cleveland, Ohio-based Goldberg Companies' announced its Layoff Proof Lease, which allows newly unemployed residents to remain in their apartments rent-free for two months while they look for another job, the story was picked up by Fox News, CBS and CNN, as well as a number of local and national print publications.

And, when Phoenix-based Mark-Taylor Residential do
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Goodwill hawking: Goldberg Company
First published 2009 May
The message from Senior VP Jordan Goldberg on the company's recently launched Web site, www.layoffproof lease.com invites renters to stop worrying and start living.

It goes on to explain that if they sign a 12-month lease and have paid three consecutive months' rent, residents are eligible to live for up to two months rent-free if they are laid off, and if they are unable to afford to stay after 60 days, can break their lease without financial consequence. Even if they are unable to stay after the free- rent period, they never have to pay the company back.

"Our thinking was these are people who might not otherwise rent or renew with us because of uncertainty about what the future might bring. Hopefully, the economic climate will get bet
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Goodwill hawking: Mark-Taylor Residential
First published 2009 May
Dale Phillips, president of Mark-Taylor Residential, one of the largest apartment developers and fee managers in Phoenix, believes that perfect opportunities for charitable donations present themselves in periods of slow development growth.

For the past two years, Mark-Taylor has partnered with the Save the Family Foundation to provide a rent-free apartment to a client of the 21-year-old, Phoenix-area non-profit that helps homeless families become self-sufficient.

This year, with so many Americans facing financial ruin, the Scottsdale-based apartment firm decided to do more, donating 12 apartments to families in crisis. "The need is certainly great and we wanted to do what we could," said Phillips.

Nearly 3,000 people are living on th
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You're fired
First published 2009 May
Some of these programs allow customers to opt out of their contractual agreements without penalty, if they become involuntarily unemployed and meet certain additional criteria. Others, some of them tied to insurance products, will pay all or a portion of the customer's monthly payments for a set period of time. A few even offer money-back guarantees.

Hyundai Motor Co. was first on the scene with a layoff protection plan in January, just as the U.S. auto industry hit its lowest point in 27 years. The Korean-based car manufacturer gained national attention with a program that allows customers to hand back the keys if they are laid off within a year of leasing or purchasing a vehicle. The company expanded the plan in February, promising to m
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MH industry applauds IRS guidance on utility payments
First published 2009 May
The National Multi Housing Council (NMHC) and National Apartment Association (NAA) applauded guidance issued early May by the IRS concerning utility allowance calculations on Low-Income Housing Tax Credit (LIHTC) properties that submeter.

At the urging of NMHC/NAA, last July the IRS issued regulations changing the way rents are adjusted on LIHTC properties where residents pay for their own utilities. The changes allowed property owners to use more accurate data to calculate resident-paid utilities.

"These changes were very important to the nation's supply of affordable housing," said David Cardwell, NMHC's vice president of capital markets. "Rents on LIHTC properties are reduced by the amount a resident pays in utilities. Before last y
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Appeals court rules against exclusive TV deals
First published 2009 May
Comcast Corp., Time Warner Cable Inc., and other providers of cable television services may not use exclusive contracts to block competitors from apartment buildings and condominiums, said a federal appeals court.

The Federal Communications Commission didn't exceed its authority when it banned such contracts, citing their anticompetitive effects, the U.S. Court of Appeals ruled in May.

The FCC voted in October 2007 to cancel exclusive agreements between cable companies and apartment owners, opening the way for AT&T Inc., New York-based Verizon Communications Inc., and others to offer services in buildings that had locked them out. The National Cable & Telecommuni-cations Association appealed, saying the agency had exceeded its authority
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The closer
First published 2009 May
The U.S. has evolved into an efficient, sometimes callous, economic machine. The ease at which companies can discard workers has helped underpin productivity and corporate profit levels in spite of a recession and has traditionally helped the economic behemoth in recovery.

But as the government steps in to bail out automakers and financial institutions, is the world's largest economy undermining the very process of creative destruction that has propelled it thus far

Steven Davis, a professor of international business and economics at the University of Chicago Booth School of Business, said the solid employment and productivity performance of the U.S. of the past 25 years has been driven to a considerable extent by the country's success
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