Government regulation, affordability, and racial equality are just a few of the issues on the minds of multifamily executives.
“I think the biggest issue is really around affordability, and it’s around the economic cycle we’re in,” said Ric Campo, chairman and CEO of Camden, during the Executive Power Panel at the virtual Multifamily Executive Conference at the end of September. “We need to make sure we bridge this gap of haves and have-nots, which is also a social issue. These social and these affordability issues to me are ones that we as an industry and as a country need to address and figure out.”
Daryl Carter, chairman and CEO of Avanath Capital Management, which owns and operates about 11,000 units that provide affordable and workforce housing, agreed. “If you look at January before the pandemic, our biggest challenge in many communities was the need for affordable housing,” he said. “Today where we sit that hasn’t changed, and the demand might be stronger.”
For Carter and Avanath, it has been important to meet both affordability and social equity needs by seeing continued investment in communities that have been underserved by institutional capital.
He added that, in his portfolio, residents are paying rent but some are just hanging on. “About half are Section 8 residents, and we are getting great rental collections. But I’ll tell you people are living paycheck to paycheck. And there is very little underlying the social fabric of our renters in the nation.”
For Greg Bates, president and COO of GID, the biggest issue in the sector today is government regulation.
“The economic cycle we’re in with COVID is challenging, but it’s temporary. We’ll get through it the way have all other cycles,” he said. “But I do think government intervention in the free markets, whether it’s federal, state, local, rent control, or vacancy control laws are troubling and present a real threat to the sector.”
Pinnacle CEO Rick Graf also noted there’s been an ongoing national conversation about a tsunami of evictions due to COVID-19 financial hardships, which he and his colleagues are not seeing.
“Collections have been pretty strong. The evictions that we have had in our portfolio are largely due to lease violations historically,” he said. “And I don’t think any of us are in a rush to go out and evict people and put them on the streets. That’s not our mindset. During COVID, we have all worked with our residents and created payment plans to keep them living in their apartments.”
Diversity and racial equity in multifamily have been a focus for years but have garnered even more attention over the past several months.
“If you do the math, 40% of renters are Black and Brown,” said Carter. “Those are our customers. My pitch to the industry is we have skin in the game. All of us have been proactive in helping our residents get through these things. But I think we can do more. Policymakers don’t see what we do, and that’s on us to be more communicative about the work we do in the industry.”
Campo added that it starts from the top of the organization. “You got to start at the top and make your boards and leadership look like your customers as well as your employees. We all have to do a better job with diversity. The industry already does a good job, but we have a better job to do.”
In addition, Graf added that Pinnacle’s site teams are very diverse—roughly 65% Black and Brown—but still has more work to do at the corporate level. He’s optimistic about that since coming into the Cushman & Wakefield family earlier this year. “They have been very strong on diversity,” he said, adding that education has been a priority with a series of listening sessions.
