How the Apartment Industry Can Address Inequality
“There is a lack of investment in communities of color. When you look at the apartment industry, most of the renters in America are black and brown,” Carter tells GlobeSt.com. “After I started talking to people about the issues that we are seeing, some of the biggest names and owners in the industry have called me say that they want to see change but that they don’t know what to do. We can start off by being more inclusive in our organizations, and I have challenged my colleagues in the industry to work harder on diversity issues. They also need to think about investing in communities of color.”
Avanath lays out eight steps for investors to follow to make an impact in minority communities:
Focus on communities of color that have been traditionally underserved by institutional capital and ensure that existing residents are not displaced in the process.
Increase acceptance of residents with Section 8 vouchers, particularly in communities with strong schools and economic opportunities. This is also good business because Section 8 rental delinquencies are extremely low.
Create community forums at properties with law enforcement and elected officials to facilitate a dialogue between residents and local police officials that creates goodwill and helps to ensure the safety of apartment communities.
Accelerate diversity at all levels and functions in ownership organizations. Multifamily staffing must be reflective of its customer base. To create a diverse pipeline, apartment owners should develop internship programs targeting minority students, and public apartment REITs should significantly increase the number of board members that are African American and Hispanic.
Implement wellness programs at apartment communities. Coordinate with health service providers that will come to properties to conduct health screenings and wellness checks. These should be implemented in apartment communities nationwide.
Adopt a low-performing public school in local market areas to support the surrounding communities and ensure upward mobility. Apartment owners should provide financial support and time off for staff to volunteer at local schools in need.
Lobby for improved police community relationships. Apartment owners are important contributors to the local economy and pay significant real estate taxes. Leverage this status to lobby for improved police/community relations.
Enrich locations that are food deserts with farmers’ markets and other strategies to bring fresh food to residents. A community with healthier residents is more economically viable. It’s important for apartment owners to support fresh food initiatives, and to encourage residents who may want to create community gardens.
These policies won’t only help to create a better and more equitable society, but Carter says that they serve a major demographic of renters. “When you look at the numbers, African Americans have a 42% homeownership rate, Latinos have a 48% homeownership rate and Whites have a 72% homeownership rate,” he explains. “When you look at the math, African Americans are about 19% of apartment communities and Latinos are 21% of apartment communities. That is 40% of the renters in America. People are more motivated when there is a compelling business reason, and we really should be responding to 40% of our market and making sure that they have better outcomes.”
Typically, institutional capital that could be playing in this market is reserved for higher-end housing, but Carter is hopeful that will change. “Institutional capital typically flows into higher-end apartment communities,” he says. “When you look the rent-regulated, affordable markets, which is about 5.5 million apartment units, and the naturally occurring affordable housing, which is another 6.5 million apartment units, it is a big part of the market. Most institutional capital perceives that as being too risky. We chose to be in the affordable segment because there is virtually unlimited demand and our turnover is a lot less.”
So far, there has been an increase in interest in this space, but more owners still need to get involved. “Some have made a transition to look into this space. It is still highly fragmented with owners,” says Carter.
Source: Globest.com
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