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The National Apartment Association Responds to Today Show Interview

On the February 3, 2009 edition of The Today Show, host Meredith Vieira spoke with Barbara Corcoran, founder of The Corcoran Group, and contributing author and real estate “guru”, about the decrease in apartment rental rates, and how it is currently “renter’s market” Corcoran explains that because of current market conditions, competition is fierce, and renters have the upper-hand.

“You (the renter) can ask for pretty much whatever you want,” said Corcoran, “because you have the protection of the lease, and the landlord’s not going to throw you out or raise your rent to punish you, so you can ask for whatever you want.” This, referring to perks such as free rent, owner paying any broker’s fees, flexible lease terms, a signing bonus (such as a cash back or discounted rent, new appliances), free amenities (free membership to the pool, parking, gym, or clubhouse) or an upgraded apartment were all mentioned in this interview. Corcoran also discusses how tenants can negotiate a cheaper rent with your landlord including tactics of hinting that they will be vacating, as well as circumventing the property manager and going directly to the landlord.

This interview has sparked many discussions throughout the multi-family industry, and the National Apartment Association has posted their own thoughts on this segment. The link for the February 3 interview is also listed below:

Talking Points in Response to ‘Today Show’ Segment About Concessions 

Featured on the National Apartment Association’s website, www.naahq.org

Arlington, VA, Feb. 4, 2009 - Many of you may have seen the segment that aired Feb. 3 on The Today Show about residents negotiating rent with their apartment owners. A link to the clip of the interview between Meredith Vieira and real estate agent Barbara Corcoran about the rental market in these tough times is:

Scenario: If a current resident or a prospective resident comes to your community’s leasing office and demands free rent and any other unreasonable amenities/concessions, be prepared to speak to the value of apartment living. Do not simply give in to their requests.

First and foremost, apartment staff must consider Fair Housing. It’s the law. What you offer to one resident, you legally must offer to all. And, whatever “deals” that may be offered to residents should first be put in writing by the owner and shared with the leasing staff. Leasing professionals should not “wheel and deal” with current residents or prospective residents and should not offer “rogue” renewal agreements.

Following are some other key “selling points” to use in such cases:

1. For current residents who are seeking a renewal, owners should consider offering the same concessions as they would to prospective, first-time renters. Again, details of such “deals” should be communicated in writing to leasing agents from upper-level management.
2. If a resident specifically mentions “The Today Show” segment, remind them that the guest on the show is from New York City, which operates in a different “type” of rental and economic climate (ie. condos). What is acceptable in NYC does not necessarily equate to conditions in Seattle, Denver, Orlando or (fill in market) from most of the rest of the country.
3. Tout the benefits of living in a professionally managed apartment community, compared to signing a lease with inexperienced owners of condos or single-family homes. Staff at professionally managed communities are experienced and capable of serving their residents’ needs in an effective way.
4. Mention that the ownership of some single-family homes and condos can be unstable in today’s economic climate and these properties run the risk of suffering foreclosures in the near term. Apartment communities owned and managed by established companies are more stable, as their owners invested in these homes for the long term. Operating apartment buildings is their core business. They are not in it as part of a get-rich-quick plan.
5. For communities owned or managed by large firms, remind prospective residents that they have set their rents based on yield management software, which determines rental rates on a daily basis, using sophisticated formulas and algorithms, and that the resident truly is getting the best price, based on the competition, in that specific submarket.
6. If your community offers flexible lease terms (such as monthly, or six-month plan), promote the benefits of signing a lease under those conditions to create more flexibility for these residents’ lifestyles. And with a set rent rate, these residents are living “inflation free,” especially if they lock in their leases for longer term leases, such as 2 years.

The National Apartment Association (NAA) is America’s leading advocate for quality rental housing. NAA’s mission is to serve the interests of multifamily housing owners, managers, developers and suppliers and maintain a high level of professionalism in the multifamily housing industry to better serve the rental housing needs of the public.

Upcoming Local  Events
Here are some local industry events. For more detailed information and registration forms, visit the CTAA website at www.ctaahq.org

It’s election time once again! The nominations for 2009/2010 board members are in.
Watch your mailbox for Ballots!

The slate is as follows:
Vice President  - Ela Lagasse - AvalonBay Comminutes, Inc.
Vice President of Associate Affairs - Rachel Vincent - CORT
Treasurer - Andew Lund - Winn Residential 
Secretary - Heather Winn - Northland Investment Corp.                   
Director of Northern CT - Odis Coleman - Winn Residential
Director of Southern CT - Joan Heckman - Konover Residential
Director at Large - Brian Lemire - Winn Residential
Director Associate Affairs:
Robert Chesson, Esq. - The Landlord Law Firm
Heidi Casertano- ForRent Media Solutions