Dive Brief:

• Over three-fourths of multifamily industry experts ranked operational efficiencies among their top three challenges, closely followed by maximizing revenue and profits (61%) and human resources, staffing and recruitment (42%), according to the National Apartment Association’s 2023 Property Management Industry Pulse Survey.
• Owners’ and operators’ concerns have changed drastically over the past two years. In the 2021 survey, with rents rising at a record-breaking pace and demand at a historic high, 74% of property professionals ranked HR, staffing and recruitment as a top concern.
• Other challenges cited by respondents include navigating the present economic climate, complying with new regulations, increasing resident satisfaction and incorporating new technology.

Dive Insight:

The 2023 Property Management Industry Pulse Survey attributes the shift in professional priorities to the impact of inflation. While inflation has eased in recent months, professionals still face skyrocketing costs for insurance, capital, wages and property taxes, the study said. Technology has helped to reduce costs, according to the survey, enabling managers to automate some roles and centralize others.

Out of all business activities under the umbrella of maximizing efficiencies, reducing costs was the No. 1 concern for over half of respondents. Finding high quality vendors, tracking projects and vendors and freeing up teams from labor-intensive tasks followed close behind. 

“Across the country, monumental cost increases — from insurance premiums and utilities to property taxes — are impacting operations for housing providers who by and large operate on narrow profit margins,” said Bob Pinnegar, president and CEO of the NAA, in a press release on the report.

The survey covers responses from over 2,000 professionals. About 75% of respondents are onsite staff, while the remaining 25% are in leadership positions. The response base included multifamily, single-family rental and affordable housing operators, most of which owned or managed between 50 and 499 units.

Seeking solutions

When asked about the resources necessary to solve their biggest challenges, respondents asked for more staff, an end to inflation and more predictability in their day-to-day operations. 

Affordability, coupled with rising costs, is considered a long-term challenge across several vectors. Many operators experienced difficulty trying to balance rent costs with the cost of operating a building, while others were concerned about government regulations regarding rent control and eviction for nonpayment of rent.

More than 20 states, and many other municipalities, are considering some form of rent control. The National Apartment Association is tracking more than 190 bills related to rent control and highlights Colorado, Massachusetts and Maryland as states of interest. The Biden administration has also announced an effort to require property owners to disclose fees for services provided beyond base rent, including applications, credit checks and property services.