Credit: Dave Plunkert

The real estate Sector is notoriously slow in adopting new infotech products and services, and the affordable housing segment is probably the slowest of the slow. Lately, however, one particular trend has aroused more interest on the part of owners and operators of affordable housing. That trend is application service provider (ASP) hosting, an online solution whereby multifamily operators log into and manage their systems via Web-based applications and databases created and maintained by external vendors. It’s akin to online banking systems in the consumer world, where individuals can access and manage account information through an online portal that their institution maintains.

“Web-provided applications have improved tremendously over the past 10 years,” asserts D. Kemp Valentine, senior vice president and CFO of San Francisco-based BRIDGE Housing Corp. “They’re easier to teach, cheaper to implement, and if you have turnover, you don’t have to go through another long training process.”

Ultimately, ASP hosting offers multifamily owners and developers improved efficiencies, greater flexibility, and helps cut costs in an economy where every dollar matters. And for affordable players, that’s a key selling point, despite the hurdles that can sometimes arise during the adoption process.

A Move to Efficiency

For the past few years, BRIDGE has been rolling Web-based management and accounting packages from Santa Barbara, Calif.-based Yardi Systems out to its sites—and the process is changing the way the firm works.

“Now, we’re really seeing efficiencies,” Valentine says, explaining that data entry for rent information has been streamlined and that Yardi has enabled balance and transfer confirmations thus far untenable via software at BRIDGE. “The next challenge will be to develop a database that will let us look at various attributes of properties so we can say, ‘If we develop X, the operating costs will be Y.’ We’re also working with Yardi to develop a new construction model specific to affordable housing.”

An affordable housing project often involves 10 to 15 sources of financing, Valentine notes. That’s why the construction software that BRIDGE and Yardi are working on will show who among a variety of financially interested parties is responsible for paying for what, what restrictions apply, when each financing source comes into the project, where the money will come from, and where it will go. Valentine says the program should be out of pilot with all projects on the construction module by the second quarter of 2010.

“We’ve also just developed our first customer relationship management system,” Valentine reveals. “With affordable for-sale housing, you get massive lines of applicants, and working with them isn’t always a pretty process. Our system puts all applicant information online, conducts the lottery, and tracks every interaction. This alleviates questions about the fairness of the process.”

Still, some tech observers say it can be difficult for affordable housing companies to adopt online technology, given their limited resources. ASP-hosted, Web-based products must “address conversion, shorten the transition period, and produce a better outcome,” says Dean Nicholaides, director of sales at Bedford, N.H.-based Bostonpost Technology. “The customers [should only] manage their own computers and their Internet access; the rest is on [the provider].” Such features help improve the customer service relationship between the vendor and the owner, Nicholaides adds.

Cut Costs, Save Time

Mark Livanec, vice president of affordable housing and public housing authority (PHA) sales at Yardi, confirms that ASP-hosted solutions reduce the capital expense required by owners and operators for database management tools, hardware, and the salaries of IT experts. However, making the most of these services often requires serious “change management.”

“The No. 1 issue is reporting,” Livanec says. “Many managers who want new features don’t spend the time and effort to understand the reports available in a new system—and how they work. They’ll try to recreate the old system instead of working with new reports. They often don’t see that the new system will be more efficient. Within a browser interface, everything is visible in every location. By working in an integrated environment, your corporate headquarters can drive more and more processes.”

Janel Ganim, director of product development at Carrollton, Texas-based RealPage, agrees. Ganim notes that the U.S. Department of Housing and Urban Development’s (HUD) switch to Internet transmission of files in March 2009 has led to a sea-change in the affordable housing industry. Now, universal Internet connectivity is a must for almost all employees. “There’s a lot of talk on the conventional side of the housing market about revenue management,” Ganim explains. “But on the affordable side, it’s more about reducing expenses.”

In addition, the move to online filing has some affordable housing infotechies hopeful that it will eliminate one of the most cumbersome parts of project management—the “double-keying” of data whereby the same information is input into two or more systems in order to comply with the requirements of multiple governmental overseers.

“Our aim is to stop double-keying across the board,” says Anthony Polidora, CIO at Michaels Development Co. in Marlton, N.J. “And internally, we’ve mostly solved that, but software compatibility issues with outside systems still make some double-keying necessary. It comes up if you’re producing one form to be submitted to HUD for vouchering, and another to go to a state agency. As we make new ties to new agencies and acquire more properties, double-keying becomes more of a time waster.”

Meanwhile, RealPage is working to cut time investments as well with one of its Web-based integrated solutions, which addresses a number of issues on the tax credit side, such as mapping tenant income certifications to state compliance reports for electronic submission, tracking available units and unit vacancy rules, and even offering functionality that allows for the implementation of Price Optimizer revenue management software.

RealPage also offers a document management system that streamlines the organization and administration of forms and paperwork. “Using our system, the corporate office can just log in and look at each property, which is a big time-saver for audits,” Ganim says. “We also have roll-up reports that let you look at the entire portfolio, not just property-by-property, so you can see at a glance where the problems are. This lets you manage your time and prioritize.”

And that’s music to the ears of affordable players. 

Joseph Dobrian is a freelance writer living in New York City.

Totally Affordable

Nab the right Web-based app by asking the right questions.

Affordable housing professionals can mitigate costs and streamline adoption by considering key issues before choosing a Web-based application. Ask the following nine questions of your staff and vendors:

1. What changes do you need to make within your organization to maximize the efficiency of the application?

2. Do you have a high turnover rate that will necessitate constant retraining?

3. Does the vendor offer a menu of conversion and training options?

4. How accessible is the vendor in terms of user support and follow-up?

5. How scalable is the application? Will it adapt to your organization’s changing needs?

6. What is the cost of adding additional properties or features into the system?

7. How is the service priced? Is there a high up-front cost or do you pay as you go?

8. Can you test drive the product before making a long-term commitment?

9. What do you save by using the product?