Tip #3: Check the occupancy rate against the fiscal year goals and identify problem areas.
Once you know your occupancy rate, the next step is to match it against the occupancy goals for the year. You should ask yourself whether the development is on track to meet the goals that were set at the beginning of the year, and if not, what the reasons might be.
A helpful measurement closely tied to occupancy rate is vacant unit turnaround time, which measures the time it takes, on average, to fill a vacancy after a unit is vacated. There are three categories that should be measured: down time, make-ready time, and lease-up time.
Knowing the average for these categories will help to determine any problems in the process that could be contributing to an undesirable occupancy rate. Also, keep in mind that as with occupancy rate, you'll want to exclude HUD-approved vacancy days.
Prior to the PHAS interim rule, vacant unit turnaround time was
also measured under PHAS. To achieve the maximum points,
HUD suggested an overall average of 15 to 20 days for total
unit turnaround time (in the private sector, the desired average
is closer to five days). HUD didn't break down the ideal time for
average down, make-ready, or lease-up time. The goals for
these averages would have been set by the PHA.
Down time is the time it takes management to turn the unit over to maintenance to make ready after gaining possession of the unit, which should be no more than one day on the average. This is essentially a communication issue. If it's taking longer than a day on average to turn the unit over to maintenance, the property manager needs to determine where and why the communication breakdown is occurring.
Make-ready time is the measurement of the average number of days it takes maintenance to prepare a unit for leasing. If it's taking longer than what the PHA has set in its goals, the property manager needs to work with maintenance to determine why. Some of the problems could be due to the organization and prioritizing of work:
- Are make-readies a high priority?
- Are there enough supplies to get the job done quickly, or are workers having to defer completion until supplies are ordered?
- Is the condition and number of tools available adequate to perform all maintenance tasks under normal conditions?
- Is staffing adequate to handle all the day-to-day maintenance activities?
Other issues related to make-ready time require coordinated efforts between maintenance and management. For example, when management unit inspections are coordinated with maintenance, maintenance will know what to expect in the number of inspection-generated work orders. Make sure that annual unit inspections are conducted as required by HUD regulations, and that deficiencies are addressed through work orders or the capital fund. In addition, quality assurance checks should be conducted on maintenance work, as well as on inspection staff. Finally, ask yourself whether tenants are being charged for damages beyond normal wear and tear, and whether the lease is being enforced when they don't pay or when the number of damages becomes excessive.
There are many possible reasons for a high average in make-ready time. Usually it's not just one reason, but a combination of problems that need to be addressed.
Not all the reasons for high make-ready time are within the
control of maintenance. There could be other factors, such as
those related to increased leniency in screening applicants
due to poor occupancy rates. While that might help fill units
in the short run, you could inadvertently be creating more
problems in the long run: good renters might move out,
damage to units could increase (raising the make-ready time),
and the morale of maintenance and lease-up staff could diminish.
Lease-up time measures the time it takes management to lease up a family once maintenance has prepared the unit for occupancy. This shouldn't take long if the development has a verified pool of applicants ready to go once a unit is ready. If the average time it takes lease-up staff to fill a unit is excessive, the property manager needs to determine what's causing the delay.
Having an adequate pool of applicants ready to go involves planning based on good data. If your PHA has a report indicating the average number of move-outs by month, you can see that not all months have the same average number of move-outs. For example, in a colder climate, the number of move-outs might be fewer in the winter than in the summer.
The type of development makes a difference, too. Family developments with school-age children may see higher move-outs during the summer than an elderly development. The average per month will be unique for each development in each PHA, and this data is essential in knowing how many families may be needed to fill anticipated vacancies.
A PHA usually needs to begin the process of filling anticipated vacancies three to four months in advance, and the agency needs to know how many families to pull from the waiting list to fill vacancies quickly. This number may vary by bedroom size and by development. For this reason, it's a good idea for your PHA to keep tabs on the average number of families that can be expected to respond to letters for eligibility appointments, the number that will be eligible, and of those eligible families, the number that will accept a unit offer. If data on those steps is collected and a report is generated and reviewed, your PHA will have a more precise number of applicants to pull from the list rather than guessing at the number needed.
Is lease-up time inadequate? Consider purging the waiting list, using site-based waiting lists, or changing the unit offer system.
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 new 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.