The waves of Hurricane Katrina evacuees needing housing hit apartment companies almost as quickly as the storm itself. "We really had no time for preparation," admits Misti Thompson, assistant manager at Champions Green, an Alpharetta, Ga., community managed by Atlanta-based Lane Co. for Butler Properties. "We received a phone call one afternoon, and five families were in their cars on the way."
It was only the beginning for Lane and its counterparts. With an estimated 108,000 rental homes destroyed in New Orleans alone by Katrina, according to the Brookings Institution, a Washington, D.C., research group, apartment firms in Texas and elsewhere have been providing short- and long-term housing to hurricane survivors.
"From day one, apartment owners began identifying vacant units and supplying that information to the federal government," says Jeanne Delgado, vice president of property management at the National Multi Housing Council in Washington, D.C. "Most offered discounts on rent, waived security and application fees, and [offered] flexible lease terms."
It represented a tremendous effort by the industry. While there's no official tally of how many people were displaced by the back-to-back hurricanes, FEMA does say 500,000 households applied to receive housing assistance. The bulk of those evacuees headed for Houston, where 100,000 families filed for federal assistance in that city alone.
But housing these evacuees has not been without challenges for apartment companies.
Advance Preparations
While Katrina's devastation was unprece-dented, many apartment firms are familiar with extreme weather. Concord Management, a Maitland, Fla.-based developer and manager of affordably priced multifamily communities in 10 states, weathered damage from the four big storms that hit Florida in 2004.
"We have a rapid response team that deals with disaster recovery," explains company president Ed Kleiman. The teams (which comprise people from maintenance, leasing, and property management) coordinate relief plans, community resources, and recovery supplies before a storm hits. "We'd been down this trail before."
So Concord knew how to respond to Katrina and what survivors–and its properties–would need. On the list: extra leasing professionals at properties popular with evacuees. "We were inundated the first couple of weeks, but we floated employees around and brought up some from Florida to meet the need," Kleiman says. In the end, Concord assisted about 400 Katrina families, mostly in its Texas communities.
New Rules
To assist Katrina victims, many apartment firms, such as The Lynd Co. in San Antonio, Texas, temporarily suspended some of their customary procedures and fees. "Our company waived the one-time application fee, administrative fee, and deposit," says David Lynd, COO of the Texas-based property management group.
But there are limits. "As our normal process, we did credit and criminal checks with each application," says Lynd, whose firm accommodated 300 of its own residents that lived in properties in Katrina's path, as well as other evacuees, in Lynd Co.-managed communities in seven other states. "Special circumstances were accepted for applicants with less-than-perfect credit histories, but we did not accept any with criminal convictions."
Such caution is warranted, says NMHC's Delgado. "There is a significant risk to house people without the knowledge of whether they will ever be able to pay the rent or whether or not they have a criminal history," she says. "The courthouses in Louisiana only recently opened up, thus granting consumer credit agencies the ability to check these things."
Without the data, some companies turned to the personal touch to protect themselves as much as they could from unpaid rents and bad debt. Concord Management asked employees to check in regularly with new residents about funding sources. "We had to make sure we didn't wake up in October without rent payments," says company president Kleiman.
The strategy didn't account for government bureaucracy, however. "We've got promises to pay from FEMA," the Concord executive says, "but we haven't seen the checks yet."
Hard Lessons
While the worst appears to be over, weather-wise, apartment executives say Hurricane Katrina and its aftermath have gave them some valuable information–good and bad–about how to respond to future natural disasters.
Kleiman promptly saw the value of the disaster plan Concord had developed after the 2004 hurricane season ravaged Florida. "We contacted all communities affected by the Katrina in-migration with our global policy for evacuee leasing," he says. "That reduced confusion and allowed our communities to respond quickly."
Others discovered flaws in the system. Matt Rotan, a co-founder of real estate brokerage Apartment Realty Advisors' Houston office, would like to see the credit and background checking process standardized. "We've discovered some need for a national crime and rent database," says the broker, who's seen Houston's vacancy rates shrink dramatically in Houston since Katrina. "If we'd been able to know if tenants had good credit and a clean record, it would have been easier for everybody."
But dealing with–or trying to deal with–the maze of federal funding initiatives probably proved to be the biggest challenge for many firms. Not knowing the full details of the federal, state, and local housing assistance programs caused problems for many apartment companies. "There was confusion for weeks," Concord's Kleiman says. "We'd hear one thing on the national news, and the local people would tell us something different."
Delgado sums it up best: "Most of these decisions on the assistance programs flow from FEMA, and they have not been exceptionally quick to make decisions." That's why, when disaster strikes, she now advises industry leaders to work closely with local housing authorities from the beginning. "This was the case in Houston, and as a result, their housing voucher program appears to be the most efficient way to get people housed and apartment owners adequately compensated."
Helping Hand
Apartment firms provide clothes, food, and more. With so many new residents arriving with little but the clothes on their backs, many apartment companies undertook their own internal and property-based relief efforts for Katrina evacuees at their properties and elsewhere.
At Lane Co., regional property manager Renae Gould provided pizza and other refreshments for evacuees and established a food and clothing donation center at the community office at Gateway Park, a Lane Co.-owned and operated community in Arlington, Tex. The on-site team contacted local merchants and employers in the area for in-kind donations.
While the office had plenty of goodies, the property was a little short-staffed to handle the volume of evacuees in need. "We have four full-time management associates at Gateway Park and could have easily doubled that to be more efficient in assisting the victims," Gould notes. Next time, she will schedule more staff to handle the demand.
