Job Hopping, Concessions, Give-Away Wars, and other Local Market Battles.

If it's not one thing, it's another.

That was Gilda Radner's recurring assessment of life as she played the comic philosopher Roseanne Roseanadanna on Saturday Night Live. The oft repeated Roseanne Roseanadanna line can certainly be applied to multifamily rental housing these days.

In general, throughout most of the country (with some location-specific exceptions in the midwest and northwest) the rental market is robust. Of course, there are always sub-markets, even in the best of places, where the competition for residents remains keen. For these slower market areas, attracting and retaining residents is still top priority. On the other hand, at this time, and in most of the country, the healthy economy and low unemployment rates have created serious competition for qualified staff. Finding and keeping qualified staff is, of necessity, what appears to be uppermost in the minds of property owners.

JOB HOPPING (EMPLOYEE RETENTION)

The search for qualified employees isn't limited to the apartment business. It's an across-the-board issue nationally. Take a look at your newspaper's help wanted ads if you doubt this fact. But the property management business is feeling the difficult employment environment in several important segments, including maintenance, leasing, and management slots.

George Allen of the Texas Apartment Association, based in Austin, explains it this way: "The market it so tight that it's hard for people to find apartments, especially at the low end. You don't have to be as aggressive in marketing because the economy is so strong here." He went on to say that this is an entirely different situation than in the '80s, especially after the Tax Reform Act. In those days, people gave rent concessions, microwaves, six-month leases, and even vacations. "But now," he says, "we're at full employment and you find folks fighting over staff."

The tried and true techniques of keeping qualified employees may work: broadening employee benefit packages; providing free or reduced rent apartments; offering incentives (for example, a percent of a lease to a leasing consultant is no different than commissions provided in retail businesses); and using gifts, time off, and prizes. But, money talks and staff are being lured away by enough of an increase in pay. How much can a property budget handle in order to sweeten the pot?

A property owner in Austin said it is such a problem to find skilled labor that many companies are "importing" employees from other states. However, he says, the growth of real estate investment trusts (REITs) and multi-state firms have "ratcheted up" pay rates that sometimes can't be matched by smaller, local companies. An established record of having a good work environment and promotion from within help to retain staff if the salary differences aren't too great.

"I work trade shows and the Internet to find qualified staff," the Austin owner says, ".... and we shop the service industries. We watch people who work in restaurants and department stores. If they know how to provide good service, we can train them for front office and other service oriented jobs."

"Frankly," another owner said, "the employee is in the driver's seat right now."

Stephen Miller, a member of the board of directors for the Denver Apartment Association and a former property manager, now works for the Colorado Department of Labor. He said in his area, too, it's a very tight market for staff, especially for top-flight managers at the high end. He said companies have to have some history as employers who provide a stable working environment, good benefits, a discounted apartment, and still be willing to pay the highest salary from among their competitors.

Julie Smith, vice president of management for the Bozzuto Group in Maryland, says lesser-known companies suffer. "If you're known to be a good employer, it's easier to get good staff," she says. Some companies "shop" their competitors looking for qualified, service-oriented leasing professionals who they can entice away.

Employers are finding that highly trained management staff who had responsibility for several properties are now able to get a job on one property, keeping the same salary with a less stressful job situation.

In this environment, how do we staff the properties? Many companies are using on-the-job training, others are turning to companies that specialize in training, or providing temporary staff. Rick Leeds of CFM Management in the Washington, D.C., market area, provides permanent and temporary service employees. He has people who don't want long-term jobs and others who have the skills but need some hand holding. This kind of placement gives the owner and/or manager breathing room to find and train permanent staff. Leeds' premier services provide that, along with in-depth training in all aspects of property management.

Ann McConnell, executive vice president of CLASS (Certified Leasing and Sales Specialists), based in Atlanta, but working nationwide, says, "When they hire CLASS, they're hiring someone to do their leasing." She explained that front-office leasing staff often may need short-term support. According to McConnell, even when the market is strong, front-office staff are often distracted by tasks other than leasing and fail to do what's needed to close on a lease. "A few months of support and training are a good investment. We bring in highly trained staff. We provide them with two weeks of intensive training in the Dale Carnegie-style public relations mode. We are usually on-site for about 45 days, seven days a week. We provide support with an on-site trainer ... we'll go on-site and train permanent staff as they work out real life situations property managers face every day."

BUT WHAT ABOUT GETTING AND RETAINING RESIDENTS?

As strong as the market may be, proper ties still have to attract and retain residents. The best approach, whether it is a property in the planning stage or an older development, is to do your homework and know your market. What are similar properties located in the same general area offering for amenities ... and charging for rent? The choice of a rental apartment is frequently made because of a geographic preference, so it's essential to know what your neighbors-your competitors--are doing. Although Realtors say it's "location, location, location," this may be as much or more the case for renters. Home owners will drive farther to own and are more willing to commute long distances for work. Renters generally want easier access to employment, transportation, and shopping. That's why a frequent marketing ploy is to "raid" the neighboring properties through carefully targeted mailings. Renters are often referred to as the "bookend" folks: very young people in their first or second apartment, not yet ready for home ownership, or older folks who are empty nesters and now want less space, easier maintenance, and access to amenities. The art of the targeted mailing list is highly refined. Looking for senior citizens who are selling their homes and ready for a more maintenance free, carefree life? Hoping to lure residents of nearby apartments who might find your amenity package enticing? Mailing list firms narrow your target and get results. Here again, research is important. Property owners need to know their competition. When people decide to move and take on a higher rent burden, they will do it by degrees, says Robert Vogt, vice president of Danter Marketing, based in Ohio. Rents have to be positioned within a reasonable "step-up." "It's a psychological thing," Vogt says. "Rents shouldn't be too high or too low. There's a dollar figure people will accept and you can't go higher."

Monetary concessions seem to work best at lower income properties. For high-end properties, service incentives often work better. For all, perceived value for the dollar (and often by square footage) will usually win, according to several marketing firms.

Nancy Freeman of Summit Properties in Charlotte, North Carolina, says the market there is generally healthy, ranked about 14th in new market product, but bordering on over-building. She will give rent concessions but says good initial training for staff followed by periodic update training, good customer service, the amenity package, and responsive maintenance are all important elements in both attracting and retaining residents.

In some areas, like the Washington, D.C., suburbs, though there are selected older buildings with the "right" address that have long-term residents, new properties are the ones that attract residents. These are people with little loyalty. Retention has to receive special attention. Residents are more easily retained if property managers keep alert to curb appeal, services, or simply how their residents are treated by the management. One front office manager, responsible for supervising all staff, said she was recently called away from the office and left a newly hired, in-training staff person at the front office. She returned to find an irate, long-term resident being hassled about a late rent check (a first for this valued client). She quickly took care of the situation, but it's this kind of treatment that leaves a bad taste and can lose a resident.

In areas where new apartment buildings are in the neighborhood of older properties, a property just a few years old may find the need to update. Possibilities include converting an apartment to a fitness center, offering concierge services, and introducing other new amenities to compete with newer neighbors. Freshening up the grounds, moving away from laundry rooms and providing individual washers and dryers sometimes becomes a necessity. Some properties bring in "interest amenities" like book clubs, exercise classes, art shows, and musical performances.

In certain market areas "older is better" for a variety of reasons. The tightest rental markets are in Boston, San Francisco, and New York City, where limited buildable space, sturdy and classy construction, combined with freshening up of amenities, have been able to command high rents. In Denver, the older apartment homes have the highest occupancy levels. Rehab is active and so are rent increases. But in some market areas (like the D.C. suburbs), older is the latest property management headache. Aging properties (the housing of the '70s and '80s) is vying with shiny new product that looks so appealing. "But," says Sue Spokany, of Gerstin Spokany, a marketing/advertising firm that has specialized in real estate, "on careful scrutiny, older sites can copycat with parallel amenities; i.e., cable wiring, business centers, concierge services, mini-vans to transit services.... then they promote everything a seasoned property can legitimately lay claim to like better construction, bigger units, sound proofing, landscaping.... older properties only suffer from the newer ones because they no longer have the developers' big bucks to promote them. You can improve and then advertise your property as `a little older and a lot better.' But the property owner and management firm should allow for regular, consistent marketing of their product."

Danter's Vogt, whose market research firm has clients all over the country, says it's tough to compete with the newer apartments. The two-and three-story garden apartment walk-ups with modest closet space are no longer attractive to the market. "People have more clothes these days." He says the renter of the '90s and probably the early 2000 years want bigger bedrooms, more closet space, and dramatic entries that give a feeling of spaciousness.

In many market areas, this is a time when it's almost a situation of "if you build it they will come." But there's a lot of room for mistakes and competitors' advantage in the word "almost." Nothing can be taken for granted. Even in a "hot" market, new properties coming on line should have already shopped the competition. Will a pool be needed? Parking services? A computer room and a community room for parties? These decisions, made before construction, will be key to attracting residents. Signage is critical about six months before completion. A clearly readable sign needs to carry a telephone number (with an attractive informational message that also takes names and addresses) and marketing staff needs to follow up in a timely manner. All types of bells and whistles are used to attract residents. Incentives can include rent (for a month or reduced and spread over the year), payment of a fixed amount for moving, carpet, or drapes.

"New properties, competitively priced, have endless varieties of marketing gimmicks to get 'em, close 'em, and keep 'em," says Spokany. "It's the art of pacing, chasing, and closing. Every job, every corner, in every city, is different." She talks about one property where she decorated models where visitors would "trip" a humorous sound system inviting the customer to take a better look. One marketer sent a virtual video to a targeted market with the offer of a restaurant meal (cooperative arrangement with the restaurant) upon a visit to the property and return of the video.

Julie Smith of Bozzuto Companies said even in a healthy market, "You still have to hustle. You've got to have more interesting marketing, hospitable staff ... anything to give you an edge ... like keeping the office open late."

Ken Szymanski of the Apartment Association of North Carolina, based in Charlotte, says that all kinds of inventive marketing goes on along with the traditional concessions. But, in an aggressive market, the tendency to "raid" other properties can be a borderline ethical issue. When asked if property managers in different neighborhoods try to work together to avoid this, he said this, too, can be a problem. "When you have a trade association and you get together," he says, "you have to be careful not to do anything that could be construed as restraint of trade."

In general, the overall turnover rate is around 50 percent. Reduce that turnover rate and you have a healthier bottom line. And remember, when the market loosens, retention becomes even more important. But other forces are at work. There's a high rate of transiency related to employment and low interest rates that have made home ownership possible for some renters who might have thought themselves years away from that option.

In Portland, Oregon, a leasing manager said response from the Internet has been "awesome," attracting new residents moving to her area from all over the country. Along with the Internet, however, she also uses the time-tested apartment guides, direct mail, and newspaper ads. Broadcast, she says, can work, but mainly for the younger market.

What about the "affordable market?"

In times like these, the potential clients of the lower end of the market feel the greatest stress. With plenty of demand for new product, rehabilitation of older properties becomes more attractive. Rehabs, with or without tax credits, result in higher rents. Lower income workers--needed community employees--end up spending a high percentage of their salaries on rent. Everyone interviewed agreed that, along with the search for labor, training employees, and finding and retaining residents, the lack of affordable housing remains a problem that needs to be addressed.

Siegel is a freelance writer based in Bethesda, Maryland.