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Achieving maximum occupancy: Tip #4

Posted by NMA on Oct 15, 2012 12:07:59 PM

Tip #4: Take marketing into account.

Marketing involves "closing the deal," and PHAs often fall short in this area.

Conditions that contribute to successful marketing include meeting the specific needs of your customers, effective outreach, good curb appeal (including what the family has heard about maintenance performance), and positive applicant perceptions regarding security.

Marketing is an ongoing process. It involves marketing potential

and location, strategies and techniques, and attracting and selling.

Good selling points include local grocery stores, child care,

adult education centers, health clinics, public transit, and schools.

Property managers need to know their customers' needs. For example, many working families work the same hours as normal business hours for the PHA. The manager may need to show units on weekends or evenings to attract working families. Also, keep in mind that different types of developments will each have their own customers with different needs and interests. That is, a development for families should focus attention on activities and services that are geared to families with children (e.g., sports, child care, and computer labs), whereas a development for the elderly and disabled will be most interested in health care, nutrition programs, accessibility, and community services.

Outreach can be done in a number of ways. Because the Internet is a growing outreach vehicle, consider developing a PHA website or using YouTube, Craigslist, and other Web resources. In addition, flyers and brochures, a model unit, advertisements, press releases, feature articles in the local media, and community presentations are all options that should be considered.

Whatever you use, making it attractive and interesting is of primary importance. And remember to change it up — a marketing tool will only work for a limited time, and then begin to lose its effectiveness. This is where creativity is important; marketing is a never-ending process.

Selling is also an important aspect of marketing, and nothing sells better than an attractive neighborhood, a clean unit, and a friendly staff. Most families go no further in the process if there's poor curb appeal. Spruce up the neighborhood, make signage attractive, and keep the development free of litter and trash. When you show a unit, make sure it's spotless and the details are polished. Check that all points of contact are friendly and helpful. Everyone is on the selling team.

Keep in mind that current residents aren't isolated from

current or potential applicants — they talk to each other.

As a matter of fact, current residents can attract future residents.

Finally, everyone wants a safe place to live. One of the best ways a property manager can enhance security is to work closely with local law enforcement. Report crime to local law enforcement, and note that local law enforcement should be sharing information they receive regarding crime in the developments.

Some other ideas to improve safety:

  • Promote legitimate activities at the property that are visible and inviting
  • Enforce the lease and eviction policy
  • Target key crime locations for prevention
  • Keep security systems in good working order
  • Remove graffiti immediately
  • Provide proper lighting, and keep laundry rooms and storage areas locked

Remember, if families don't feel secure in their surroundings, they won't recommend your property to prospective renters.

Next: Achieving maximum occupancy: Tip #5

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.

Topics: blended occupancy, LIHTC, maintenance, mixed financing, occupancy, PHAS, seniors and elderly, Trainers and Consultants, Knowledge Base

Achieving maximum occupancy: Tip #3

Posted by NMA on Oct 8, 2012 11:46:11 AM

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.

Next: Achieving maximum occupancy: Tip #4

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.

Topics: blended occupancy, inspections, LIHTC, maintenance, mixed financing, occupancy, PHAS, seniors and elderly, Trainers and Consultants, Knowledge Base

Achieving maximum occupancy: Tip #2

Posted by NMA on Oct 1, 2012 11:43:18 AM

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 calculating

the 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.

Topics: blended occupancy, LIHTC, mixed financing, occupancy, Trainers and Consultants, Knowledge Base

Achieving maximum occupancy: Tip #1

Posted by NMA on Sep 24, 2012 2:06:33 PM

In any rental housing endeavor — whether public housing or private rental housing — occupancy is the lifeblood of the business. Your agency cannot collect rent on an unoccupied unit; nor can it receive subsidy from HUD for those units, generally speaking. In light of ever-decreasing public housing subsidy, it's essential to keep your units filled.

HUD measures PHA performance related to occupancy through the public housing assessment system (PHAS). The four indicators under PHAS are:

These four indicators are all interrelated, and poor occupancy rates can negatively impact all of them. That is, without the money that occupied units generate, it's difficult to keep the physical condition of the properties in decent, safe, and sanitary condition, and in good repair. In turn, renting a unit in poor physical condition is more difficult, causing the occupancy rate to sink further. That means even less money to do upkeep on the housing stock, creating a vicious circle. It's crucial that property managers understand the importance of keeping units filled.

Tip #1: Be aware of how PHAS measures occupancy.

Under PHAS, occupancy is scored twice: under the management operations indicator and under the capital fund indicator. Under management operations, it's measured by development, based on information which is entered into the financial data schedule (FDS) at the end of the PHA's fiscal year. It's measured again under capital fund, but for the entire public housing portfolio rather than the individual developments, and the data comes from HUD's Public and Indian Housing Information Center under the Inventory Management System (IMS/PIC).

The management operations indicator is worth 25 total points, 16 of which are contributed by the occupancy subindicator. In order to achieve the full 16 points, a public housing development must achieve an occupancy rate of 98 percent.

A detailed breakdown of how points are awarded by occupancy

rate under the management operations indicator can be found in

the Federal Register Notice on Management Operations Scoring.

The PHA's overall score for management operations is based on the sum of the unit weighted averages for all the public housing developments, divided by the total number of public housing units in the PHA's portfolio. This means that if one development has very poor performance in occupancy, it will most likely have an effect on the overall PHA score.

For each development, the occupancy rate for management

operations scoring is based upon the unit months leased divided

by the unit months available. Unit months leased means the

number of months within the assessed fiscal year that each unit

was actually occupied. Unit months available means the number

of months within the assessed fiscal year that each unit

was potentially available for occupancy.

Under the capital fund indicator, occupancy rate is one of two subindicators, the other being timeliness of fund obligation. This is important to note because the PHA must first receive all the points available for the timeliness of fund obligation subindicator in order to receive any of the five total possible points for occupancy rate. Remember, this measurement is taken using data in IMS/PIC for the PHA's entire public housing portfolio rather than by development.

A detailed breakdown of how points are awarded by occupancy

rate under the capital fund indicator can be found in

the Federal Register Notice on Capital Fund Scoring.

PHAS is scored based on a 100-point system, 21 points of which (16 in management operations and 5 in capital fund) come from occupancy. That's nearly a quarter of the overall PHAS score! Poor occupancy will have a negative impact on performance in the physical and financial areas as well.

It's safe to say that if each property manager is maximizing their occupancy rate, the PHAS occupancy and overall scores will reflect it.

Next: Achieving maximum occupancy: Tip #2

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 recently 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.

Topics: blended occupancy, capital fund, IMS/PIC, LIHTC, mixed financing, occupancy, PHAS, Trainers and Consultants, Knowledge Base

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