BUSINESS FUNDAMENTALS
PREPARATION
expressed interest in talking and are eager to obtain data. Now, the rental housing industry can step up by a show of strength in numbers that cannot be ignored: 10-11 million individual investor/landlords managing an average of two units each, many with just one unit. 1 IT’S TIME FOR RENTAL HOUSING PROVIDERS TO TAKE A SEAT AT THE TABLE FAIR Housing has been created as a nonprofit organiza- tion to bring a non-partisan, apolitical voice to advocate for the interests of the rental housing industry, whose beneficiaries are both landlords and tenants. As a non- profit, doors open to opportunity for substantial impact. WHY CREATE FAIR HOUSING NOW? Industry advocacy is needed because irresponsible policy and legislation that impacts all rental housing (44 million homes) is often created in response to the one percent or less of rentals that have a dispute. Usually these disputes are disproportionately higher among low-cost rental units. The rental supply for lower- and middle-income households is decreasing by a rate three times faster than new units being built in metro areas. Housing costs have risen higher than non-housing goods. And the predictable result is more delinquency and evictions. This increased activity fuels affordable housing advocacy that often points to a personal story of an eviction, which furthers public perception that housing providers are greedy profiteers who take advantage of the poor. Pro- liferation of tenant advocacy groups is immense, where the independent real estate operator/investor is not optimally represented by incumbent associations. FAIR HOUSING + SOCIAL ENTERPRISE FAIR Housing is a nonprofit social enterprise to ad- vance innovation in rental housing with a mission to eliminate unnecessary and preventable evictions. It leverages technology to match financial resources as an easy way for both landlords and tenants who might be in financial distress to apply for aid. FAIR Housing addresses needs of vulnerable low- cost housing renters and the part-time landlords they rent from, where unstable rental housing dynamics are created, adversely impacting community economics, health, and education. Our learning center helps landlords limit their legal exposure and preempt liability to prevent costly evictions. Tenants can receive rental payment assistance through a platform to match available resources and utilize the learning center to gain confidence and knowledge.
Affordable housing and evictions are decades old problems that researchers and government have failed to solve. It’s time to empower the community and partner with private enterprise to deliver different and innovative solutions. IMAGINE THE POWER OF 10 MILLION RENTAL HOUSING PROVIDERS Of all rentals, 60 percent are non-corporate, individ- ually owned rentals between two parties where nei- ther has a representative organization. If you’re in the business of providing rental housing of any sort (e.g., short-term, long-term, AirBnB, vacation, etc.), whether it be high-end luxury or low-cost affordable housing, you will be impacted by the affordable housing debate. The trend to impose new rules on the growing private rental housing sector is unlikely to slow; expect an ev- er-increasing rising tide of regulation facing the private sector landlord, which ends up affecting the tenant due to increasing costs and rent. There is a way to track and monitor both local, state, and national legislation. It requires real organized ef- forts to be effective at responding to and advocating for legislation. FAIR Housing will be highly influential even if we simply had a list of names. That is where we have strength — in numbers. •
Preparation Not Panic HOW SMART REAL ESTATE INVESTORS ARE INSULATING THEIR PORTFOLIOS FROM THE 2020 RECESSION.
YourVoice Matters What are your thoughts on this issue? Tell us. We really want to know. Go to FAIRH.org and share your views on our open forum. And be sure to come to the formal launching of this organization at the March 2020 Think Realty Expo in Baltimore.
by Charles Sells, PIP Group
M
ost analysts agree that we will see a recession in the
During the last recession, the Millennial generation came of age and was, largely as a result of the downturn, stalled for years as they accumulated student-loan debt and struggled to launch into their own homes and lives. They have a skewed perception of economic cycles because the last one was so horrible for them and a “unique” perspective on how things might be better managed to prevent the catastrophe of a downswing ever happening again. Younger adults do not even have the perspective that Millennials enjoy. They have no memory of adult life during a downswing and,
as a result, cherish an unnatural fear of it. These factors, along with the uncertainty that comes with every presidential election year and a number of classic market indicators that have been predicting reces- sions for the past century, seem to be driving the point that a recession (or a downturn) is coming home. What can stop this downswing? Probably nothing. What could stall it and subse- quently make the eventual down- swing much, much worse? Politicians pandering to their public and burying their collective heads in the sand.
next 12 months. Will it be on the par of “The Great Recession” that followed in the wake of the last housing crash and subsequent global financial melt- down? Probably not, but real estate investors must accept we are overdue for an economic downturn. That downturn could be magnified by legislation and policy decisions made by politicians afraid to say “No” to an electorate comprised of many voters who were children during the last recession and, as a result, have an unrealistic fear of the concept of an economic cycle.
BrianWojcik is a housing industry advocate who transitioned into real estate, both as an investor and property manager, after more than two decades of experience in engineering, sales, executive management, and operational/business process reengineering
consulting. He resides in Howard County, MD, where he volunteers to teach a “Tenant Success” program he created for Bridges to Housing Stability, and where he created Landlord411 to assist rental housing providers. His expertise of the independently owned rental-housing market has been sought after for local and state level legislation/policy development. Mr. Wojcik has been published in national publications about legislative issues, affordable housing matters, and rental housing advocacy. He holds a Bachelor of Science degree in Manufactur- ing Management from Clarkson University and a Master of Science degree in Real Estate from The Johns Hopkins University. He is founder of diyRealty.co.
1 https://www.huduser.gov/portal/pdredge/pdr-edge-frm-asst-sec-061118.html
34 | think realty magazine :: january / february 2020
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