Lane Co., an Atlanta-based third-party manager of more than 30,000 units, has always maintained a dedicated practice for public housing clients. “It may not be the most profitable stuff in the world, but we believe in doing it from a community-oriented perspective,” says Dan Haefner, Lane's chief information officer.
Such a philosophy hasn't been easy, technology-wise. While Lane's property management software has an affordable housing module that addresses 80 percent of what Lane needs for its public housing clients, “there's still that other 20 percent,” Haefner acknowledges. For example, the company's contract with the Atlanta Housing Authority requires Lane to track residents' progress through the agency's Moving to Work program. Since mainstream property management programs don't offer that type of specialized tenant-tracking capability, Haefner and his IT staff had to develop something that did.
Now, using a proprietary public housing module it created itself, Lane can tell the Atlanta agency when residents complete specific educational requirements, or fall behind in the program, while tracking numerous other pieces of information unique to the sector. But such features didn't come cheap: Haefner says the project took two years to develop and estimates the soft costs at $250,000. “We developed it because we had to,” Haefner says. “It was the only way we could stay on top of our client requirements.”
Lane's experience in deploying that system for its public housing clients belies a fundamental shift when it comes to multifamily technology today. In an industry where building technology from scratch was often the only choice firms had, doing IT projects in-house now has become a measure of last resort for apartment firms.
EASIER CHOICE As a multitude of vendors have crowded into the business, offering everything from resident screening applications to online payment processing and electronic lease programs, in-house development has become a less appealing and less necessary choice. And given software programs' growing adaptability, multifamily tech execs say that if you can't find exactly what you want off-the-shelf, you probably can modify existing software to suit your needs.
“If you can buy it, buy it,” advises Patrick Gregory, chief information officer for Richmond, Va.-based United Dominion Realty Trust, a REIT that owns and operates nearly 75,000 units nationally. “There's so much more available now than there was, that it's really a much easier choice. If you build something, you own it, which means you own the cost of maintaining it and hiring the people to support it.”
Cost, of course, is a huge part of building something from the ground up. “I know this: Whatever you decide to develop on your own, it will cost you more than you anticipated,” Haefner says.
That's one reason that observers now say most in-house IT projects are only used to address highly specialized processes, such as Lane's public housing module, that aren't available commercially. “But in the future, I'm hoping [other solutions] will continue to evolve, so that we can carve away what we've developed, and enter everything into one system,” Haefner says.
With the advent of Web-based software, that evolution is happening faster, too. At United Dominion, Gregory says his team started developing an in-house lease-renewal system at the end of 2005. Since development time was kept short—less than six months—UDRT was able to keep costs relatively low. But in the interim, yield management systems from both Atlanta-based The Rainmaker Group and RealPage's M/PF YieldStar division have progressed to the point that Gregory and his team are now testing them to augment, or even usurp, what they developed internally.
“We've received great benefit from what we developed, but that doesn't mean that at some point, it won't be replaced,” Gregory says. “I think a lot of our peers are in the same situation: they may have developed something in-house, because it either wasn't available or they weren't ready to move to a commercial system, but now the functionality is there.”