Apartment operators are constantly devising ways to stand out in the market. Creative marketing teams are dreaming up everything from an on-site planetarium to a mini-roller coaster that goes directly through a common-area hallway.
Sometimes the solution to attracting residents is more attainable than they realize. An uptick in pet-friendliness and a rethink of pet amenities has the potential to attract a wider pool of residents and keep existing residents in their homes.
As residents dedicate even more focus on the well-being of their pets, properties that merely allow pets for an exorbitant fee and offer a small pet-relief area near the back entrance no longer qualify as pet-friendly. As such, cutting-edge apartment operators are overhauling the industry’s standard, antiquated policies. In some instances, their innovations even include the complete elimination of breed and weight restrictions.
“It’s been discovered in recent years that many long-held perceptions surrounding pet restrictions have been flawed,” says Judy Bellack, industry principal for Michelson Found Animals and part of the team leading the Pet-Inclusive Housing Initiative, created in partnership with the Human Animal Bond Research Institute (HABRI). “The belief that most insurance companies incorporate breed restrictions into their policies is in fact false, as most do not outline specific breeds. The perception that residents largely favor these restrictions is a misnomer, as well.”
According to the Multifamily Pet Policies and Amenities Survey from PetScreening and J Turner Research, only 24% of residents favor breed restrictions while 53% oppose them (the remainder of respondents were ambivalent). Even fewer residents—20%—support weight restrictions. Bellack notes that six of the American Kennel Club’s 10 most popular breeds would be disqualified from living in most apartment homes based upon standard restrictions.
“When the industry encourages rental communities to remove all pet restrictions, the idea is not to do so haphazardly,” says John Bradford, founder and CEO of PetScreening. “It’s a big step that requires a diligent approach, including proper training of team members and deciding on what works best for a particular property. But when done correctly, easing restrictions can significantly increase a community’s position in the market and serve as a revenue generator.”
High pet-friendliness levels also keep residents in their homes longer. According to the 2021 Pet-Inclusive Housing Report, residents in pet-friendly housing stay 21% longer than those in non-pet-friendly housing. The report, from the Pet Inclusive Housing Initiative, also indicates that 24% of residents have moved because of their pet, and 14% have had to surrender their pet as a result of their housing situation.
Here is a look at how three apartment operators have broken the traditional mold and reaped the benefits of innovative pet policies:
TMG’s Renewal Rates Among Pet Owners Skyrocket
The Management Group (TMG), an Atlanta-based property management firm, can essentially qualify as the poster company for how revamped pet processes can drive serious business benefits. TMG had operated with a fairly standard set of pet policies until the latter end of the 2010s, when a snafu with an assistance animal request spearheaded a change.
Residents would oftentimes attempt to circumvent TMG’s breed restrictions by claiming their pet was a service animal. The ensuing attempt to verify documentation, which sometimes involved getting pricey legal teams involved, was exhausting. It led Jamin Harkness, executive vice president of TMG, to ponder why these restrictions were in place to begin with.
After researching insurance parameters and CDC guidelines—and realizing neither stood in the way—TMG made the decision to completely revamp its policies in favor of something innovatively pet-centric. The overhaul included eliminating breed and weight restrictions, adopting innovative pet technology resources, outsourcing assistance animal accommodation requests, and the ultra-bold step of doing away with pet rent.
The pet-friendly changes have resulted in some mind-defying business metrics that have made a substantial difference to TMG's bottom line. Some might ask how it’s possible to increase revenue after waiving pet fees. Most notably, TMG has experienced an impressive 80% renewal rate among pet-owning residents.
“For us, anything above a 50% renewal rate is great,” Harkness says. “And that’s a pretty standard renewal rate for the industry. So when I get 80%, it’s amazing.”
Harkness notes that in the three years since revamping pet policies, TMG has experienced a rise in pet residency from 40% to 70% of homes. That means in a TMG property with 250 homes, about 175 contain pet owners. And with an 80% renewal rate, approximately 53 more homes are renewing their leases than if those units had a more typical 50% renewal rate.
“If I multiply those 53 homes times our average vacancy loss of $1,200 and an average turn cost of $1,800, that’s about $160,000 more net operating income (NOI) than we were achieving previously,” Harkness says. “Pet rent on the high end is $30 per month, $360 per year. I will forego that rent in order to save $3,000 or more on vacancy loss and turn costs for each unit.”
TMG has also discovered that pet amenities don’t need to be the most innovative to make an impact. Although TMG has adopted a wide variety of pet amenities and services, Harkness says a pet park with shade is most crucial to residents.
Oculus One-Ups Competitors With Innovative Policies
Oculus Realty, which operates apartment communities in the Washington, D.C., area, prides itself on never settling for the multifamily status quo. As part of the effort to remain on the innovative forefront, Oculus dropped breed and weight restrictions in 2019.
“In multifamily, you don't want turnover,” says K. David Meit, CPM, principal of Oculus Realty. “You want people to stay, and you want good relations among your residents. You want to build community. I realized that animal lovers tend to be really great community builders because it's in their nature.”
In shedding restrictions, Meit and his team used the measured approach needed to make the transition a smooth one. He educated himself and his team on the nuances of breeds and discovered the concept of “bad breeds” was largely a myth. Pet behavior oftentimes is largely contingent on the owner. Additionally, he confirmed that the perception most insurance providers incorporate breed restriction components into their policies was false.
The decision to eliminate restrictions was paired with improving pet infrastructure at Oculus communities, including the additions of pet parks, dog runs, and pet washes. As an added touch, Meit selected his dog, Basil, to serve as the company’s chief happiness officer. Oculus also adopted a few third-party services to help with pet-related events and, like TMG, adopted a doggie DNA service to help discourage pet owners from leaving pet waste unattended.
Oculus eliminated hefty pet deposits in favor of a one-time fee coupled with low pet rent. The pet-inclusive measures have better positioned Oculus communities in their respective markets and boosted retention overall.
“You want to create that stickiness because people want to feel comfortable where they live,” Meit says. “They're not going to want to move unless they really have to. We get inquiries all the time about breed restrictions. And frankly, it's been a boon to our business because a lot of our competitors have them—and we don't.”
Pegasus Uses On-Site and Off-Site Efforts to Endear Itself to Pet Owners
Pegasus Residential, based in Alpharetta, Georgia, has boasted a pet-friendly reputation since its inception in 2009 and features dog parks and other pet amenities at its communities. In addition to offering a pet-friendly experience on-site, Pegasus has been creative about further cultivating its pet-centric focus.
Pegasus often incorporates pet-based incentives into the leasing process, such as allowing renters who sign a lease on a particular weekend to receive the added bonus of no upfront pet fees. The company also regularly hosts pet adoption events and often partners with a local ASPCA. In 2019, the Pegasus Paws program helped raise $40,000 for the ASPCA, and Pegasus has also given back to the Angels Among Us pet rescue charity.
The focus on pets isn't only for business purposes, according to Wendy Dorchester, senior vice president of operations for Pegasus. The pet love perpetuates throughout the company.
“I'm so proud to work for a company that absolutely loves pets,” she says. “Whenever I'm in the corporate office in Atlanta, I see crates and baby gates at desks because so many people bring their pets to work. It's a joy to see.”
Pegasus also has shed weight restrictions at all communities and breed restrictions at many in favor of screening pets on an individual basis to assess risk factors. The company focuses on its pet-inclusivity in marketing materials and has also experienced boosted renewal rates.
"What we've found is that resident satisfaction, from the standpoint of the entire community experience, is off the charts," Dorchester says. "Residents love each other, and sometimes they even know each other by their pet's name—'that's Spike's mom’—rather than their real name. And they don't want to move due to that sense of community."
TMG, Oculus, and Pegasus are among the operators that have elevated pet-friendliness levels and experienced the benefits—from the dual standpoint of business metrics and resident satisfaction. These operators are setting the blueprint for success in the modern apartment world, where pet-owning residents will steer away from antiquated policies and gravitate toward where their pet will be the happiest.
