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Targeting the Hispanic renter.

The explosive growth of the U.S. Hispanic population over the past decade is having a profound impact on the multi-family apartment industry. Almost 25 million people of Hispanic origin now reside in the United States, accounting for just under 10 percent of the total U.S. population. This figure represents a 35-percent increase since the 1980 census.

Approximately 70 percent of the Hispanic population is now divided among four states--California, Texas, Florida, and New York. Perhaps even more revealing, however, is the presence of significant Hispanic populations in every state (Figure 1).

Studies conducted by Miami-based Strategy Research Corporation reveal that sharp Hispanic population gains are also being seen in numerous second-tier northern and midwestern cities. For example, between 1980 and 1990, the Hispanic population grew dramatically in such non-Sunbelt cities as Las Vegas (340%), Cleveland (293%), Milwaukee (77%), and Portland (62%). Big gains were also recorded in Boston (47%), Philadelphia (45%), and Washington, D.C. (45%).

By far the fastest growing ethnic group, Hispanics are expected to number an estimated 35 million people, or 13 percent of the total U.S. population, by 2000. Longer-range projections published by the U.S. Census Bureau estimate that by the year 2080 the numbers of U.S. Hispanics will have grown to 99 million people, representing 28 percent of the U.S. population.

In those U.S. cities and regions where burgeoning Hispanic population growth has already occurred, opportunities abound to improve occupancy levels, reduce turnover, and reposition existing rental properties to attract the Hispanic renter. Likewise, well-planned turnaround and rehab projects can successfully target the Hispanic renter.

Areas just beginning to experience an inflow of Hispanics can develop effective rental marketing strategies to address the market needs of this significant population growth.

Current market perspectives

Although conclusive research data is not available, it has been my experience that a disproportionately large number of Hispanics remain long-term renters when compared to the general population. The continued inflow of Hispanic immigrants, spurred by Latin American population pressures, political unrest, and economic instability, also contributes to a steady, long-term demand for rental housing among Hispanics.

Fundamental to an understanding of the Hispanic rental market is an awareness of the ingrained cultural values, attitudes, and motivations of Spanish-speaking Americans. Equally important is the recognition that great diversity exists within the nationalities that make up the Hispanic population. Not only are there unique cultural, educational, and economic differences among the many Hispanic ethnic groups, but a surprising range of affluence and purchasing power exists (Figure 2).

In the past, the mainstream media have often portrayed America's Hispanics as a group of newly arrived, impoverished immigrants from Mexico or Central America. Contrary to such stereotypes, Hispanics, as a group, are not poor, with an average household income of $32,400 and a median household income of $28,980 (Figure 3).

New immigrants may start at the lower end of the economic ladder, but there also exists a large and growing middle-income class, which demands and can afford better quality rental housing. A smaller segment represents affluent renters who are seeking upscale communities as a first or second home.

To date, the preponderance of Hispanic-market research has been conducted in the area of consumer products. Prominent market research firms, including Strategy Research Corporation, Yankelovich Associates, and DRI McGraw Hill, have conducted in-depth studies and surveys of Hispanic buying habits and underlying cultural values, motivations, and perceptions.

While none of these formal studies have specifically addressed Hispanics as rental prospects or apartment dwellers, it is nevertheless useful to associate generally recognized attributes with effective rental marketing strategies and resident-retention efforts.

Such correlation is further validated by the author's two decades of experience in the South Florida rental market and numerous personal interviews and informal discussions with owners and managers of Hispanic apartment communities.

Emphasis on family

Hispanics are culturally and traditionally motivated by strong family ties and

values associated with the well-being of the family. This encompasses not just the immediate family but the extended family, including multiple generations.

Family members generally will prefer to live in reasonably close proximity to one another, and rental prospects may seek an apartment unit of sufficient size to accommodate parents, children, plus an aunt or uncle, and even a grandparent. The average number of people residing in an Hispanic household is 3.6, somewhat higher than the average of 3.1 for non-Hispanic households.

If unit size is inadequate, the prospect may ask to rent two units in order to remain together. As more family members immigrate or re-locate from other U.S. areas, additional apartment units may be rented.

The rental decision process itself may involve a number of family members; thus the person making the initial visit to the property is not necessarily the final decision-maker. He or she may first consult with other family members.

Sociability

In many instances, Hispanics are sociable and gregarious people. Personal contact and vibrant conversation are a normal part of everyday life. In apartment communities, Hispanics are quick to establish a network of friends and acquaintances.

Every apartment community has its informal "grapevine" whereby the good and bad news (and troublesome rumors) quickly spread. The alert resident manager who maintains the trust and confidence of his or her Hispanic residents will often learn of potential problems within the community long before they become serious.

Similarly, the Hispanic residents' perception of management will be shaped in part by the tidbits of news and information passed along the grapevine. An act of kindness by a staff member, for example, will likely become general knowledge throughout the community. Conversely, a perceived unfair resolution of a resident problem can send a negative message. Hispanic renters are generally perceptive and sensitive to the manner in which authority is handled by management.

Hispanics also often enjoy entertaining friends and relatives. If the apartment community has clubhouse facilities, picnic areas, game rooms, a swimming pool, playgrounds, or other amenities that encourage social interaction, these will be of special interest to this market segment.

Loyalty

The extensive Hispanic market research done for the consumer products industry consistently demonstrates that Hispanics exhibit a high degree of brand loyalty. They stick with familiar products and need compelling reasons to justify making a change.

The corollary to this consumer research conclusion might be seen in the generally lower turnover rate among Hispanic residents (compared to non-Hispanics) observed in the Miami apartment market. The Hispanic renter who has comfortably settled into a well-managed apartment community and established a network of friends is not inclined to consider moving elsewhere.

Permanence vs. mobility

According to Richard Tobin, president of Miami-based Strategy Research Corporation, his firm's 17 years of Hispanic market studies have identified what he believes is the primary value influencing the Hispanic's economic decisions including the selection of housing.

"The key factor to understanding Hispanics," says Tobin, "has to do with the concept of mobility. Hispanics are immobile, unlike the average American who is highly mobile with family spread across the country."

According to Tobin, this desire for permanence among Hispanic renters may partially grow out of the high percentage of the population that are first- or second-generation citizens. The natural consequence of this painful uprooting and loss of familiar surroundings is an innate desire to seek "old neighbors" and to "sink an anchor as deep as they can," according to Tobin.

Consequently, the typical Hispanic rental prospect will respond positively to any information that invokes a strong sense of community and shows that the rental complex is well-established and enjoys a good reputation and long-term tenant loyalty. All of these messages subtly assure the prospect that he or she can safely make the decision to move in.

The concern for family that is so often a component of Hispanic culture also makes the safety and security of family members an important component in the rental decision. Concerns with safety and security make security gates, telephone entry systems, and individual security alarm systems appealing amenities to the Hispanic renter.

Other appealing features in apartment communities might include light interior colors, balconies large enough to hold a number of planters, ceramic tile flooring, ceiling fans, and views of landscaped green areas. Such amenities reflect the tropical climate and Spanish-style architecture often found in Latin American countries.

This overview of attributes, cultural values, and the forces and perceptions that surround and shape the Hispanic lifestyle will serve as a useful reference when formulating marketing, leasing, and resident-retention programs.

Reaching the Hispanic renter

Having determined whether or not a property meets the needs of the Hispanic renter, the real estate manager now must determine how to most effectively reach this target market.

Decisions to advertise in English, Spanish, or both, and the requirement for bilingual management and staff are important matters. Rental communities that have either a mix of Hispanic and non-Hispanic residents or are planning to pursue a stronger Hispanic tenancy should consider running ads in both English and Spanish language newspapers, if locally available. Ads can be alternated or run concurrently depending on the timing of leasing goals.

Because many Hispanics also consult the major English language newspapers for rental information, it is necessary to maintain accurate records tracking the source of all Hispanic rental prospects. The Miami rental market has multiple Spanish language newspapers to choose from, some serving a particular Hispanic nationality.

Apartment rental guides are popular in many areas of the country, but the more widely circulated guides are likely to be printed only in English. To attract Hispanic prospects, consider modifying your standard apartment guide copy to include a few brief sentences or a short paragraph in Spanish. It may only repeat some of the highlights of your English-language ad copy, but it will capture the attention of Spanish-speaking rental prospects. A popular South Florida guide has added a small but eye-catching banner on its front cover announcing that rental ads in Spanish can be found inside.
FIGURE 2
U.S. Hispanic Population by Country of Origin: 1991
 Number % of
Origin (1,000s) Total
Mexico 14,680.9 58.9
Central America 3,364.9 13.5
Puerto Rico 2,542.4 10.2
South America 1,694.9 6.8
Cuba 1,545.4 6.2
Caribbean 847.4 3.4
Other 294.3 1.0
Totals 24,925.2 100.0
Source: Strategy Research Corporation


The question of employing Spanish-speaking staff, and for which staff positions, depends largely on the number of Hispanic residents in the market area, their degree of assimilation, and their proficiency in English.

When dealing with first-generation immigrants, expect to communicate in Spanish. Even second- and third-generation Hispanics with well-developed English skills often are more comfortable conversing in Spanish. They may have little or no difficulty communicating in English, but are more apt to establish a rapport when speaking in Spanish.

The preferred solution for properties with a mixed tenancy is to employ bilingual staff able to converse fluently in both languages. The person who speaks "a little bit of Spanish" is not going to be very effective. Ideally, both leasing and maintenance staff employed by mixed properties will be fully bilingual.

The Hispanic resident

Despite the perception of some Americans that Hispanics comprise a homogeneous group, each Hispanic ethnic group views itself as being quite different in many ways; the inflections and use of spoken Spanish, usage of common slang words and expressions, cultural traditions and celebrations, food, and music all reflect subtle variations. The inevitable frictions that result are sometimes seen when people of different Hispanic nationalities reside in the same rental community.

It is useful for on-site management and leasing staff to be especially sensitive to such differences and to ensure that everyone is treated fairly and equitably. Hispanic staff members of one ethnic group must use care to avoid personal bias and possible discriminatory behavior.
FIGURE 3
Median Hispanic Household Income by Market Region: 1991
Total U.S. $28,980
Southeast $31,690
West $29,460
Central $24,980
Northeast $24,300
Southwest $24,270
Source: Strategy Research Corporation


As with all new residents, Hispanic tenants should be educated as to the rules and regulations of the community. This means having the community rules printed in Spanish and having a Spanish-speaking staff member go over the regulations with all new residents.

Recent immigrants may not be attuned to typical apartment rules, so staff members should emphasize the procedures and ask that the resident acknowledge receipt of the community rules. This practice will avoid most potential noncompliance problems later.

It is also important to have operating information on unit appliances available to residents in Spanish at the time they move in. These instructions will help ensure proper care of appliances and avoid costly maintenance later.

Because it is not uncommon in Latin American countries for the apartment residents to be responsible for maintenance, it is essential that new residents understand that the necessary maintenance will be provided by management. Make residents aware that they should not try to make repairs themselves and ensure that they understand correct procedures for obtaining service. The availability of 24-hour maintenance service will often be a pleasant surprise for new Hispanic renters and can be an effective marketing tool.

Summary

The dramatic surge in Hispanic population growth is expected to continue well into the 21st century. Hispanics are not only the fastest growing ethnic group in the U.S., but they are expected to outnumber all other minorities combined before the next century.

For multi-family owners and managers, the Hispanic renter represents far more than a so-called "niche market." Rather, satisfying the rental housing needs of Hispanics will be the primary challenge in virtually all of our nation's housing markets. These needs span the full spectrum of rental housing, from low-income, government-assisted housing projects to upscale rental communities. Other opportunities exist in retirement housing and nursing homes.

Those managers who make an effort to understand the special qualities and attributes of the Hispanic renter will enjoy a decided advantage in multi-family occupancies in the decades ahead.

Peter J. Clancy, CPM|R~, is the president of P.J. Clancy & Associates in Miami. For the past 12 years, he has owned and operated a portfolio of commercial, residential, and industrial properties primarily in South Florida. His firm also specializes in management and consulting for private and institutional investors.
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Author:Clancy, Peter J.
Publication:Journal of Property Management
Date:Nov 1, 1992
Words:2387
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