Seattle’s Rental Market Scores 8th in the Nation

First thing’s first: how’s everybody doing after Snow Week? Did you cross country ski to PCC for supplies? No one spun their car down any hills, did they? Good.

Now we can move on to the important real estate news: the Seattle/Tacoma apartment market ranks 8th nationally for 2012, according to a new report by Marcus + Millichap.

The report, which was just covered in the Puget Sound Business Journal, is based on the area’s anticipated job growth for 2012. The Puget Sound ranked fifteenth last year, but job growth in the tech industry will propel us forward in 2012–the regional economy is expected to gain 34,000 jobs this year alone.

As a result of this job growth, 1900 rental units will be added to the market before 2012 is over. Vacancies are expected to drop about 4%, and rent will subsequently rise 4.2% or so, to an average of $1,057.

Curious who beat us to numbers 1-7? Check out Jeanne Lang Jones’ full article here. And hey, stay warm and dry while the snow melts!

Seattle 2040: The Future is Crowded

I’m a recent arrival in the Pacific Northwest. When I first moved here, fresh from the wooded mountains of coastal California, the high-rise buildings and crowded freeways of Seattle were a bit of an adjustment.

Now, I love the convenience and character the city has to offer, and I don’t even notice all the people around me as anything unusual. But can you imagine the Puget Sound with the same population density as Japan? You may not have to imagine it–according to a book that was covered recently in the Seattle PI,  our population density in 2040 will be similar to what Japan has today. Wait–really?

Megalopolitan America: A New Vision for Understanding America’s Metropolitan Geography is by Arthur Nelson, a founding director of the Metropolitan Research Center, and Robert Lang, director of the Brookings Institution Mountain West. According to the authors, there are ten “megapolitan clusters” that will propel the US economy over the next 30 years.

Megapolitan areas share economic, physical, social and cultural traits, and have accounted for nearly three-quarters of the growth of the past 40 years. The US will continue to add significantly to its population (unlike other developed countries), and substantial planning challenges will result.

The Puget Sound area alone is expected to swell from 4.5 million people in 2010 to 6.3 million people in 2040. The resulting population density will rise from its current level (less than that of Germany) to approximately 809 people per square feet in 2040–that’s on par with current-day Japan. And somehow, there will have to be enough housing and jobs for all of us! That’ll mean 1.9 million new homes,  among other things.

For a full rundown of the book (including some in-depth analysis on the economic ramifications of such a population shift), check out Aubrey Cohen’s article in the Seattle PI. Meanwhile, have you been to Japan? How were the crowds? Think we can adapt in the next few decades? Weigh in below.

Are we Ready for Smoke-Free Housing? Part II

Last time we talked about the benefits of going smoke-free. Today, we’ll dive into how you can implement this at your properties.

What are the realities of implementing a smoke-free policy?

Amanda Clark, of Guardian Management, spoke about the company’s 12,000 multifamily units in four states (one-half affordable housing). In 2006, they decided to begin the transition to smoke-free in every single one of their buildings. This decision was influenced by a renter’s survey which found that 76% of residents would rather live in a smoke-free building. The survey also found that while 21% of tenants at the time smoked, only 11% were in the habit of smoking inside. Once Guardian found that their residents would be served by such a policy, they moved forward in the following steps.

  1. They developed their policy. They decided to prohibit smoking inside apartment buildings and common areas such as entryways, parking areas, patios and balconies, and within 25 feet of any building. On properties which had the space, designated smoking areas were created.
  2. They made a transition plan. While the policy was implemented immediately for new residents, an effective date was chosen for all existing month-to-month tenants. Most tenants signed new leases within twelve months, and no residents were grandfathered in.
  3. They gave notice to their residents. This included contacting HUD and owners, speaking to staff members, and sending letters to all residents 120 days prior to the change.
  4. They marketed the policy. “No smoking” was now listed on ads as an amenity; in addition, they conducted media outreach and trained staff to be spokespersons on the policy. They also offered information on how to quit smoking to all interested residents.
  5. Finally, they enforced the policy. The policy is listed, with the other rules of each building, on the rental agreement. There are also signs and stickers. Tenants are held financially responsible for repairing units damaged by noncompliance, and violations are documented with a warning system.

One year after the policy was first implemented, residents were surveyed again. Three-quarters of all residents reported being happy with the no-smoking policy; even 30% of smokers said they liked the new rules. The benefits of the new policy included the following:

  • Health and wellness: The amount of non-smokers who reported never being exposed to second-hand smoke increased by 75%. 43% of tenants who smoked reported smoking less after the policy was implemented, and nearly half of tenants who smoked attempted to quit.
  • Reduction in costs: Guardian found that their average cost to turn over a one-bedroom unit dropped by over $1,000 after units were uniformly non-smoking.

Insurance rates also dropped once the policy was implemented. Certain insurance companies now offer incentives to go smoke-free—Capital Insurance Group, which was represented during the presentation, now offers a 10% credit for smoke-free units.

Are you thinking about going smoke-free?  You can find further information and resources can be found at www.smokefreewashington.com, and we’d love to hear about how you successfully made this happen in the comments below or on our Facebook page!

 

Are we Ready for Smoke-Free Housing? Part I

If you own multifamily housing, you know: trends change. What renters want, and what they require of their living situation, evolves as surely as hairstyles over the decades. This certainly isn’t breaking news; you have probably long-since replaced your avocado-colored fridges and orange shag carpets. But as we continue to modernize our living spaces, there is one issue that isn’t quite as cut-and-dry as Energy-Star appliances or T1 data lines. The question is: are we ready for smoke-free apartment buildings?

Cities in the US and abroad have gone a long way in the prevention of smoking in public places, with clear benefits for our air and lungs. But what about smoke-free living spaces? Are people ready for it—is there even a demand for it? Is there a benefit to owners? How can it be done?

We recently attended a presentation put on by SmokeFreeWashington.com. The presentation featured talks by Guardian Management, which has successfully taken all 12,000 of its multifamily units smoke-free, as well as Capitol Insurance Group, which offers financial incentives to companies who go smoke-free in their buildings. Here’s what we found out about the first-hand experience and benefits of going smoke-free.

How have the residential needs of smokers and non-smokers evolved?

Ron Oldham, from the Pacific Northwest NAHRO, spoke about the past and current trends for smokers, non-smokers, and their respective needs.

In 1965, the adult smoking rate was 42.4%. Compare this to 17.3% nationally in 2010 (in Washington State, it’s closer to around 14%). While there were very few no-smoking policies in multifamily housing at the turn of the millennium, by 2010, 87% of Washington homes had adopted a no-smoking rule (that placed us fourth in the US). In September of 2010, the King County board of health passed a resolution encouraging city councils, HOAs, developers and managers to adopt non-smoking policies.

What are the benefits of going smoke-free?

Our ears really perked up when Mr. Oldham began to speak about the benefits of going smoke-free:

  • Market demand: 86% of Washington renters prefer to live in smoke-free housing. That’s over 95% of non-smokers, and over 50% of smokers.
  • Turnover costs: It can cost an additional $5,000 to turn over a smoking unit. Repairs can include extra cleaning and the replacement of carpet, blinds, and surfaces with burns or stains. Secondhand smoke and cigarette residue even penetrates ceramic surfaces, making it very difficult to purge from a unit.
  • Reduced fire risk: In Washington, smoking materials are responsible for more deaths than any other fire source. These fires and fire deaths can be easily prevented by non-smoking policies.
  • Avoiding liability: Mr. Oldham noted that smokers are not a protected class. But according to the Fair Housing and Americans with Disabilities Acts, residents with disabilities affected by second-hand smoke may request reasonable accommodations. Residents have successfully sued their landlords in buildings that allow smoking for breach of warranty of habitability, constructive eviction, and breach of covenant of quiet enjoyment.
  • Very little pushback: When asked, Washington landlords were nearly unanimous in saying there was no negative effects of a smoking ban in their buildings. In fact, 91% reported that new non-smoking policies produced no effect on turnover rates, vacancy rates, or lowering of rent.

Next time we’ll discuss the realities of initiating a non-smoking policy, with steps you can use to implement it at your building. Stay tuned!