Topic: Is anyone starting to grow a conscience? These 10/15/20% renewal increases are getting to me.

Is anyone starting to grow a conscience? These 10/15/20%% renewal increases are getting to me. I’ve been doing this for well over a decade and doing this to long-term residents is sincerely bothering me. These people moving from the north that can now work remote have no problem paying the rents we’re throwing out, but our long-term locals are struggling - they cannot pay what we’re proposing for renewals, and they cannot find anywhere else in the city that they can afford. I’ve never seen this before and I’m questioning my morals. Anyone else experiencing this?

Every single day.

Unless you are in Affordable Housing, do not forget that we are running a business!

Totally agree!! I have been in their shoes before. Have you thought of giving less of increase for long term resident renewing?

Thank you for asking a question that I have been struggling with as well (have a feeling we are in the same area based on your wording). And when the market crashes are we going to be decreasing on renewals?

I have always thought this. I will tell residents who can afford to renew but that are considering to buy, to just buy. Because it doesn’t matter anymore if you pay on time, if you’ve been here x number of years etc, every year your rent is going to go up.

It’s one of those things where we have to use our votes and vote for change.

Are you advocating for govt rent control?

I’m even not necessarily sure to be honest. I’m sure there are other things that could be proposed to vote on. After working in property management there are a lot of things that are unfair. For example, where I work we adjust our rates to our competitors. However all of our competitors are luxury buildings. Brand new. Amenities. Our property though was built 2012. Has not had a single upgrade. Water heaters are over 10 yrs. No amenities, not even free coffee. No clubhouse. Nothing to even rent out. Yet we’re pricing our homes at about the same rate, maybe a $20 difference.

I do feel that communities maybe need to be assessed the value of the units?

I know this is also an issue that should be brought up to management which it has but hey I’m just the leasing manager, but the community manager.

Then we also don’t assess whether the resident has had a pay increase or decrease before renewals and then assess.

I just think property management is about the corporations rather than the people. But that’s also just how the US is in general.

Market rents are based on comparable properties. If yours is, for example, Class B in an ocean of Class A space, your rents might be a bit higher than if your property were surrounded by Class C properties. But, yes, the market does tell us where to price properties (just as the market tells your employer what to pay you). Generally, speaking, if your property is priced too high, vacancies will climb within a month or two--depending on other variables of course. May I ask, what is your current vacancy rate?

I’m struggling too.

I worked on site during the 07/08 crash, I’ve had to extend 20%- 30% increases and I’ve also had to extended decreases - it’s all based on your business needs. As a CM or on site team member, our job is to run the building the most efficiently so we can continue to provide all of those services our residents are paying for. It’s a very tough moral conundrum, but at the end of the day, it is a business, and not charging rents in line with the market, rising salaries, rising costs to do business will make your business fail.

These high increases during a pandemic is sad. Truly.

I'm in Texas and the pain is real. Wages not moving, but rent and everything else blowing up.

Besides being seen as a bunch of money grubbers it isn’t good business. They are willing to sacrifice good paying long term residents for a few extra bucks. Extra bucks they will mostly spend to turn the apartment over and over again.

Money is great, I wish I had some, but it’s not the only thing that matters.
When the bottom falls out the greediest ones will be stuck with a lot of empty, overpriced units. And nothing hurts your brand worse than being forced to cut your prices.

I spoke to an executive about this today and he mentioned that, regarding renewal increases, their motto was "People over Profit." A rare perspective, indeed.

I 1000 percent agree. The greed is real.

Unfortunately just like we have to put aside our emotions when dealing with an angry resident,

We have to do it with the ones we like too

You are ultimately running a high dollar asset, with other peoples money, and you are there to make sure it runs smoothly and bring a profit for the owner

Some of us cope with drinking problems

Edited to add:

I agree, it sucks. As someone who grew up poor and lived in C-, D properties until I moved out at 17, watching my single mom work 3 jobs to pay rent and put food on the table was rough

Overall our cost of living has quadrupled in ALL areas in the last 40 years, and our income has NOT kept up

We have properties going up $600 on renewals! That is outrageous. Managers are going to prove heir residents out of a home.
In our area? There are few vacancies. These residents are going to be on the streets

Hope the owners see the newbies paying more, default.

2 out of the 3 areas in which we have properties are still not allowing increases on renewals.

If our residents are at market rent. We do not increase if they sign 90 days out. If they sign 60 days out it goes up $25
30 days out it goes up $50.
We are 2 renewal incentives 90 days out 1 renewal incentive 60 days out and nothing 30 days out.
If they are not at market then we go to market.

What kind of incentives do you offer?

Carpet cleaning, blind replacements, new kitchen or bath faucet. Or they can request something specific. Had one ask for new carpet we went up a $100 on her rent had another 1 that wanted a new dishwasher we went up $50 on hers

Unfortunately for a lot of us the increases aren’t an option. The cost of supplies, labor & taxes increased significantly this year. Our city didn’t have a problem increasing property taxes last year and in order to hire staff we have had to pay more per hour. Don’t forget that lumber alone has increased by a lot causing other suppliers to increase their parts. It’s a vicious cycle.

Yes! We are here too. Everyone is moving from elsewhere and don’t bat an eye at paying $1600 for a 2 bedroom at a 17 year old property. Furthermore my company does not give any renewal bonuses so it doesn’t give onsite staff any incentive to try and keep a resident here.

Why is it always the landlord/owner’s fault? I can only speak for myself, but property taxes have gone through the roof. So has property and health insurance costs.

I'm guessing you didn't read the email today from the COO of HD Supply. I will share it for you in full here... (please note: I don't use HD Supply so this in no way an endorsement or advertisement).

Dear Valued Customer,

We are proud to provide the service and support you require to operate your properties in a safe and effective manner. As your supplier, we think it is important to share key trends we are observing in the current market around product cost and availability. The insights below are from the manufacturer partners we work with, as well as publicly available data on raw materials provided by the US Bureau of Labor Statistics from the Producer Price Index Detailed Report dated May 2021.

* Cold Rolled Steel up 107% YOY — Used in Water Heaters, HVAC Equipment
* Polypropylene up 57% YOY — Used in Liners, PVC/CPVC Fittings, Plastics
* Copper up 58% since May 2020 — Used in Plumbing, Motors, Compressors

It is not just raw material pricing that is up. Crude petroleum is also up 185% since May 2020, which impacts energy and transportation costs. Transportation costs alone are up 7.3% from March 2020 to March 2021.

In addition, many of the products your business relies on are also impacted by manufacturing constraints. For example:

* Refrigerator inventory shortages are expected to continue into next year, driven by increased demand. We are sourcing additional private-brand options and inventory to help meet this challenge.
* Water heater supply is limited due to component and labor shortages. We have worked with our suppliers to secure large allocations to support your needs in Q3 and Q4.
* Severe pool chemical shortages are causing a spike in prices and reduced availability of alternate products. We expect these challenges to extend into 2022. We have secured market-leading allocations of liquid chlorine to act as an alternate pool sanitizer.

In order to keep your property stocked with the products you need, we recommend ordering ahead.

The good news is this: There is no other distributor better equipped to meet these challenges than HD Supply. Backed by the power of The Home Depot, we are working closely with our global network of suppliers to monitor market conditions, mitigate price increases, and secure the products you need. We also recognize that there may be unavoidable price increases or volatility in the market, and we are committed to communicating such updates as they materialize.

Please know our team of 12,000 Associates is fully committed to providing the products and services you need to safely operate your properties.

Regards,

Brad Paulsen
Chief Operating Officer, HD Supply

Agree, it hurts us to have to offer a higher rate to long term and reliable residents. And we have no control over it. Hopefully providing exceptional service makes up for that. Most of our resident will pay and won’t leave because of how we treat them.

While you're deciding what to do, just remember, it's a job. It's not your morals that are in question.

That being said, I've walked away from companies like this. Unfortunately, if they can get the rents, they're not going to listen to any reasons why they shouldn't charge even more.

I already voiced my opinion on this to my upper management but it was not well received. I’m all for raising vacant units as high as the sky, but it’s literally making me sick to pass along 30% rest increases to residents struggling from the pandemic who have made every effort to pay on time and in a town where no apartments are available. Very sad times. And I’m in a smaller market where the locals think I’m the one setting prices. I actually fear for my safety in public and at home. Greedy landlords are loathed here.

These 10% increases are outrageous and the market prices are equally outrageous. I like my career of the last 20+ years but, I can't and don't feel right about these crazy increases! I don't care that people are paying them. "Just because they can, doesn't mean they should" in regards to these ridiculous pricing modules most of us use now. IMO.

You're are definitely not alone. The struggle is real.