Being aware of the challenges, opportunities and pitfalls in affordable-housing property management is the key to profitability and success, NAR’s Megan Booth tells GlobeSt.com in this IREM Global Summit preview.
CHICAGO—Being aware of the challenges, opportunities and pitfalls in affordable-housing property management is the key to profitability and success, Megan Booth, senior policy representative for the National Association of Realtorsin Washington, DC, tells GlobeSt.com. Booth will be moderating the Affordable Housing Management panel session during IREM’s Global Summit here Oct. 10-13. We spoke with her about the session and what property managers need to know regarding affordable housing.
GlobeSt.com: What are the greatest challenges in affordable-housing property management?
Booth: Especially if property managers are managing federally assisted housing, they should know that the rules tend to change pretty frequently. HUD, Rural Housing Service (part of USDA) and even the IRS put out new regulations and guidance pretty regularly, so property managers have to be aware of and keep up with the new rules and guidelines that come out several times a year. Another challenge is tight budget constraints, including limits on rent increases and costs that are outside of their control such as utility costs. In affordable housing, they can’t make that up in the rent, so operating efficiently can be a challenge.
GlobeSt.com: Where are there untapped opportunities for property managers to add value to these properties?
Booth: One of my members termed it is the “senior tsunami.” As the Baby Boomers age, there are going to be a lot of seniors on fixed incomes who will need affordable housing. Some of what you do for seniors might be different than what you do for families. You may be able to hire or contract with service coordinators who can provide services for seniors such as food or health programs. Sometimes, HUD will allow service coordinators to be hired; this will be a growing market because there will be more and more seniors needing this type of housing. It’s important for people to be up to speed so these services can be in place as the need grows. For instance, you don’t want garden-style apartments for the elderly—they need buildings with elevators. This is a special-needs community and one that property managers should learn about now so that they’re ready for it.
GlobeSt.com: What are the pitfalls to be avoided in this realm?
Booth: One of the trickiest things, especially in programs with some sort of federal subsidy attached, is that administrations come and go, and there will be changes in how to fund these programs. You never know if funding is going to be cut for a program you’re using. One thing property managers can do is to share the properties with members of Congress: have them come visit the properties and the residents. If they can see them and the benefits they’re getting from these programs, it can help quite a bit.
GlobeSt.com: What else can attendees hope to gain from this session?
Booth: Many people in our industry don’t realize that IREM members manage almost 40% of federally assisted housing in the country. People think it’s really a specially-niche thing, and yes, there are a lot of technicalities to be aware of, but property-management companies are participating in it. Most communities have huge waitlists for affordable housing, so depending on where the government goes with some of these programs, they could be expanded or cut. For example, the LIHTC program legislation, if it passes, might expand the program and offer more ability for people to live in these properties, and hopefully they will have professional property managers there who know what they’re doing. You never know what’s going to happen, but this is not a niche that is going to go away.