Achieving maximum occupancy: Tip #2
Tip #2: Know your current occupancy rate, and track it on a monthly basis.
Another important step in achieving maximum occupancy involves not only knowing your current occupancy rate, but tracking it on a monthly basis. The property manager will be interested in the occupancy rate for the development, whereas the asset manager will be interested in the occupancy rates for all public housing developments in the PHA's portfolio.
In Tip #1, we discussed how HUD determines the occupancy rate under management operations for the year. In order to track it on a monthly basis, property managers will basically use the same principle, but based on the number of unit days available and unit days leased in each month.
HUD-approved vacancies are exempted in calculatingthe occupancy rate. 24 CFR 990.145 provides a list of
approved vacancy categories. PHAs receive subsidy for
approved vacancies; it's important to know what they are.
Specifically, to calculate occupancy rate for the month, first multiply the number of days in the month by the number of units in the development, then find the sum of the number of vacancy days for each vacant unit. Do not count the number of unit days attributed to approved vacancies, only the days for unapproved vacancies.
Next, subtract the number of unapproved vacancy days from the total number of unit days in the month to arrive at the number of occupancy days for the month. Finally, divide the number of occupancy days by the total number of unit days to arrive at the occupancy rate.
For example, if there are 15 units in a development and 30 days in the month, the total number of unit days for the month would be 450 (15 x 30 = 450). If there are 29 vacancy days, excluding approved vacancies, you subtract 29 from 450 to arrive at the total number of occupancy days, 421 (450 - 29 = 421). To calculate the occupancy rate, you'd then divide the 421 occupancy days by the 450 total unit days (421 / 450 = 0.9355, or 93.6 percent).
Tracking the occupancy rate over time will allow you to see whether you're improving, getting worse, or staying about the same. Staying the same may be either good or bad, depending on whether you're where you need to be in meeting your goals.
Next: Achieving maximum occupancy: Tip #3
Terry Provance has been a trainer and consultant at Nan McKay and Associates since 1999. He specializes in the public housing program and is responsible for writing and keeping staff updated on asset management materials. He took the lead role in creating and developing NMA's PH Occupancy Tracking Tool, which can be used by any rental development, whether or not it's HUD-assisted, including mixed finance and LIHTC properties.
