Slide Number #1 © 2007 Nan McKay & Associates Slide #1 Cara Gillette Effective Property Management...

Slide Number #1

© 2007 Nan McKay & AssociatesSlide #1

Cara Gillette

Effective Property Effective Property ManagementManagement

© 2007 Nan McKay & Associates

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What We’ll Cover TodayWhat We’ll Cover Today

Making the property competitive Filling the units

Marketability and marketing Unit officers

Collecting rent and other amounts Turning it around…

October 2007 Ethics 2

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What We’ll Cover TodayWhat We’ll Cover Today

Enforcing the lease Monitoring performance of the property

Including financial performance

Supervision Including quality control


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Quick BackgroundQuick Background

Under the new model, operating subsidy will be calculated and allocated to each AMP Each AMP will be its own business (with

eventually its own PHAS score) and needs to do well in its own right

The manager is the business manager of the AMP


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Quick BackgroundQuick Background

The manager must ensure that the property is decent, safe, sanitary and in good repair, and competitive in the marketplace Performance of the manager will like be more

closely tied to performance of the property under PBM

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Making the Property CompetitiveMaking the Property Competitive

Your first priority is to fill the units The property

has to be attractive to attract tenants

Page 2-10

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And, in order for your property to be financially viable, your property needs to attract a healthy mix of incomes People have choices

You also have to understand the marketplace and your competition

Page 2-10

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What is your competition? The Section 8 HCV program Multifamily developments Other shallow subsidy programs Depending on local rents, units in the

open market

Page 2-10

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Factors to consider and plan for: Curb appeal – view from the sidewalk or street

– first impressions are critical First perception lasts Image – combination of location, appearance,

age, and public perception

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What does that mean, plan? Good management includes following a

comprehensive property management plan Measuring and monitoring performance

Property management requires management of rents, physical space, property values, and staff

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Curb appeal – look at: Does it look like, talk like, and act like public

housing to someone driving by? Are there mattresses and junk in the yards? Are sheets and blankets thrown on balconies? Is the dumpster overflowing?

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Curb appeal – look at: Is there landscaping – trees, lawn, bushes – or

does it look like a wasteland? Signage? Paint and trim – fresh or peeling? Broken-down cars or car repair on premises? Presence of management?

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Filling Your Units – MarketingFilling Your Units – Marketing

Marketing is an important function – it has both financial and non-financial outcomes

Page 2-2

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Filling Your Units – MarketingFilling Your Units – Marketing

The property manager is ultimately responsible for filling the units Includes working with the eligibility team,

making recommendations for capital improvements, budgeting, managing the office and maintenance staff at your site, and knowing your neighborhood

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Filling the Units - MarketingFilling the Units - Marketing

The number one complaint from prospective renters is how dirty the unit is

The seemingly small details make the “sale”

You are a factor in making living there seem desirable or not

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What the pro’s do Advertise – think about a brochure, ad in the

paper, and/or website The prime time to show a property is when

prospective renters can come after work Know not only the unit and the property –

know the neighborhood!

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Understanding the MarketUnderstanding the Market

Marketing needs to be planned and thought out

It’s necessary to understand what factors affect your market These factors will determine whether good

applicants are attracted to your site

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Understanding the MarketUnderstanding the Market

Know your competition – what do they have that your project doesn’t? What do they have better? Size of bedrooms Laundry rooms Playground Sports equipment

Dishwasher Central AC Gates Carport or garage

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Market SurveyMarket Survey

Marketing your site This is a useful tool You need to know

your competitors You can do this by

phone

Attachment 1

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New resident orientation is when you familiarize new residents with the property and the lease This is when you

educate and establish rapport

Page 2-17

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New resident orientation The site office and staff should convey a

professional image When difficulties arise during tenancy, it’s

often because people are uninformed Follow up with new residents shortly after

move-in

Page 2-17

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Strategic Asset Management Strategic Asset Management DecisionsDecisions

If the vacancies continue despite best efforts, strategic decisions must be made: Reconfiguring the number of bedrooms Reconfiguring bedroom sizes More generous occupancy standards Capital improvements…

Page 2-17

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Strategic Asset Management Strategic Asset Management DecisionsDecisions

If property continues to be non-performing: Demolishing – some of the buildings or all Disposition (selling)

Page 2-17

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Unit OffersUnit Offers

The unit offer system needs to be described in detail in the ACOP And practice need to match

policy

Page 2-17

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If the waiting list is centralized and the eligibility team screens and makes offers: Look at your PHAS vacant unit turnaround time

Down time Make-ready time

Lease-up time

Page 2-17

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If lease-up time needs to improve: Do you have a robust waiting list? Are enough files being processed, and timely? How many offers for each vacant unit?

Is the process being tracked carefully? How much time for acceptance or refusal?

Are you offering your longest vacancies first?

Page 2-17

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If make-ready time needs to improve, you need to work more closely with maintenance We’ll talk briefly about supervision later Supervising maintenance means following the

work orders, tracking time, doing QC, and daily communication

Page 2-17

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If you have site-based waiting lists The good news is that you have more control You also have more accountability And if no one wants to live at your property, you

have work to do – along with leadership and a plan

Page 2-17

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Selling the Unit, Property, and Selling the Unit, Property, and NeighborhoodNeighborhood

The unit: You as property manager and the PHA

response to maintenance needs Choice between income-based and flat rent

Earned income disallowance Self-sufficiency opportunities and FSS

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The property: Safety and security

Communication between manager and residents is critical element

Security strategies should be developed with local law enforcement

You need to exhibit speedy and fair lease enforcement

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The property: Self-sufficiency opportunities at the site

Day care, learning center, community center activities, classes, resident groups

Opportunities to transfer or homeownership

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Know and market your neighborhood: Local schools Adult ed centers Daycare centers Job opportunities Public transportation

Supermarket Career center Colleges Clinics & pharmacies YMCA and YWCA

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Collecting RentCollecting Rent

Collecting rent is an important measure of job performance

Rent collection policies should have very limited and specific flexibility And in your ACOP!

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If you need to improve rent collection: Announce your focus and policies to

residents Meetings, newsletters, monthly rent

statements More rigorous rent collection shouldn’t be

a surprise to residents

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Methods to assure prompt rent payment: Clear understanding at

outset of tenancy Consistent and fair

application every time The goal is that families

stay and pay!

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Rent Collection PoliciesRent Collection Policies

Must be comprehensive – should include: Rent due date Date which rent is delinquent Schedule of late charges Consistent late payment – be clear and enforce Location where payments to be made Partial payments – or not

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Collecting Other AmountsCollecting Other Amounts

Damage caused by residents Some managers are more

rigorous about collecting rent than damages

Note: damages above normal wear and tear

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Collecting Other Amounts Collecting Other Amounts

Damage caused by residents Due and collectible 14 days after written notice

If resident doesn’t pay, proceed with 30-day If tenant pays before expiration of 30-day

notice, accept payment and cancel notice

Again, ACOP should specify exceptions for charging for damages

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Collecting Other Amounts Collecting Other Amounts

Retroactive payment agreements HUD will be tracking these more closely

through PIC This isn’t just a piece of paper – the PHA needs

to be enforcing and collecting

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Enforcing the LeaseEnforcing the Lease

Enforcing the lease will help you retain good families The lease is the contract

between the PHA and the family – and governs the professional relationship

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Your responsibility is to ensure that: Property is well-maintained Residents uphold their lease obligations Property is free from drugs and crime

Key to good lease enforcement is prompt, certain, and consistent application of the terms of the lease – with documentation!

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Most lease violations can be handled quickly and informally by: Calling resident (or calling him or her in) Discussing alleged violation or complaint Listening Explaining relevant lease provisions and

consequences of continued noncompliance

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Some lease violations require more formal notices and may lead to evictions Other than criminal or

threat, usually following a progressive lease enforcement process works best

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Documentation is critical Even minor problems – over time, may add

up If there is a need to evict, the documentation

or lack of it, will make or break your case

Page 4-6

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Monitoring PerformanceMonitoring Performance

You need to know how the property is doing Financial and non-financial Performance of the

property will be closely tied to performance of the property manager

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In order to assess and track the performance of the property, accurate on-time reports must be generated Many will be electronic – will enable the

managers to aggregate and synthesize data and monitor trends

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A clear org chart and defined reporting policies and procedures are essential The supervisor’s

responsibilities and authorities should be well-defined

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Quality data for key program areas and functions will be reported This data forms a baseline against which the

PHA can monitor progress over time (trend analysis)

The PHA should set benchmarks for acceptable performance – PHAS criteria at minimum

Page 8-5

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Current PHAS criteria should be drilled down to monitor the project Physical condition for each project Current ratio and MEFB for each project Vacant turnaround time, work orders,

inspections, capital funds

Page 1-188

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PHAS will be revised to be project-based The AMPs will be the new measurement focus

Each AMP will receive its own PHAS score The PHA shouldn’t wait for HUD! Under the first year of project-based PHAS,

the project-based score will be transitional and current scores will be binding

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HUD “contemplates” the following: Physical condition of each project

Current methodology – independent inspection Financial condition of each project

Assessment of the AMP’s liquidity Management operations of each project

Onsite management review – no self-certification Capital Fund obligation/expenditures

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Under project-based PHAS Management Operations will be significantly

changed – form HUD-9834, onsite multifamily management review form, may be used Will cover tenant selection, unit

assignment, lease and grievance, and tenant participation

Page 1-188

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The AMP reports from HUD’s stop-loss kit are a good template Attachment 2

(FHEO report added)

Page 1-192

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Project ReportsProject Reports

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17. Fair Housing (Reasonable Accommodation, FHEO Issues)

Unit Request Date Requested

Status

114 Request for live-in aide 11/21/06 Approved pending background check of live-in aid

187 Request for transfer to sunnier unit 10/29/06 Denied 11/15/06. No documentation provided that need for a sunnier unit is related to a disability

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In some cases, the reports are synopses More detailed reports from the projects will

be needed, that drill down to source documents Source documents are unit inspections,

tenant files, verifications

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The vacancy report is one of your most important reports Needs to be kept up daily and submitted

weekly

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Monitoring Performance Monitoring Performance

A vacancy report could also contain info on what you are doing to fill vacancies Advertising, marketing, coordination with

maintenance and management Efforts to achieve a pool of applicants

Then you could see what has and hasn’t worked, where improvement needed

Page 8-13

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More on financial performance Applying PHAS criteria to the AMP helps

track financial performance Current ratio – measure of liquidity –

does your AMP have enough cash? Months expendable fund balance –

measure of viability – adequacy of reserves

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More on financial performance The property manager will need to

understand the budget and work within it Monitor budget-to-actual (variance) The project needs to be bringing in more

than it’s spending

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More on financial performance After the first year of project-based

accounting and budgeting, the project will have to have excess cash in order to pay the asset management fee to the central office

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Excess CashExcess Cash

In the 1st year of PBM, there is no excess cash requirement for the payment of the asset management fee

In the 2nd year, each AMP must have excess case to pay the asset management fee

In the 3rd year, excess cash must equal specific assets minus current liabilities minus one month’s operating expenses

Page 6-23

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Asset Management Fee Asset Management Fee Calculation ExampleCalculation Example

X

AMP has 120 units: $10 x 120 units x 12 months = $14,400

$10 PUMAsset Mgmt Fee

Total ACC Units

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Excess Cash and FungibilityExcess Cash and Fungibility

Excess cash is the project’s net liquid assets, or “surplus cash”

Calculation is based on prior year-end financial statements

Audited statements will determine final excess cash amount

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Uses of Excess CashUses of Excess Cash

Retain funds for future project use Transfer funds to other AMP Pay as asset management fee to COCC Use for other HUD-approved eligible

purposes Financing new units, handling lawsuits,

covering accrued pension and retirement

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Excess Cash and FungibilityExcess Cash and Fungibility

Uses of excess cash not permitted: Loaning or giving COCC cash other than as

the asset management fee Proceeds from the sale of assets to the

COCC – these belong to the AMP Except with HUD approval

6-60

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Calculation of Excess CashCalculation of Excess Cash

Calculation of excess cash:Sum of asset accounts on the FDS

- Sum of ALL current liabilities- One month operating expenses for AMP

= Excess cash

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FungibilityFungibility

Fungibility effective date Prior to first project-based submissions,

on or after July 1, 2008, all funds are considered fully fungible, including to the COCC Once the PHA has reported PBM data,

excess cash restrictions and limitations apply

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FungibilityFungibility

In the 1st year of project-based accounting, full fungibility of op funds between projects

In the 2nd year, fungibility is allowed provided project has excess cash

In the 3rd year, fungibility will require that excess cash must equal at least one month of operating expenses

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Allowable FungibilityAllowable Fungibility

Page 6-61

Is this transfer fungible? Yes No

Transfer cash from AMP 1 to AMP2 Transfer cash from AMP 1 to COCC Transfer cash from HCV to AMP1 Transfer cash from Cap Fund to AMP1 Transfer cash from COCC to AMP1

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RIM ReportsRIM Reports

We’ll talk about quality control next chapter

Bottom line, you need to monitor the annual reexamination and rent calculation process

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RIM ReportsRIM Reports

You need to keep a recertification log if you supervise staff conducting reexams

You need to also need to monitor that staff is determining income correctly and calculating rent accurately

Sample reexam tracking report Attachment 3

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SupervisionSupervision

Page 9-14

Supervision is key to successful performance of the property Highly skilled staff who

know what’s expected of them

Accurate reports

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The Supervisor is in the MiddleThe Supervisor is in the Middle

You’re an advocate for the PHA and employees If the PHA implements an unpopular policy, you

represent that to the employees Management expects your loyalty, and

employees will vent their frustration to you You also represent the employees to management

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Supervisory CompetenciesSupervisory Competencies

Core skills of the supervisor: Problem-solving and decision-making Planning Delegation Basics of internal communication Meeting management Managing yourself

Page 9-5

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Quality ControlQuality Control

Good supervision has to include quality control

Page 9-35

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QC for key program areas and functions will be compiled and reported

This data forms a baseline which can be measured over time (trend analysis) We looked at the stop-loss reports

The board sets benchmarks for acceptable performance for the project and the portfolio

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Continuous quality control This is the only way to conduct effective and

fact-based trend analysis This is done by the front-line supervisor and

up The supervisor checks the most critical

areas of every staff person – a certain number of files monthly

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You can’t check everything Need to QC critical areas – for all your staff You have to drill down – tenant files, lease

violation results, documentation, inspection reports

You need to understand what is really going on – don’t jump to conclusions

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Starting to QC the property and staff might mean monthly checks of certain key areas For staff with no errors, these QC checks

might be quarterly or semi-annually

Over time (trend analysis), you’ll see where the problems are Then you can come up with an intervention

Pages 9-37

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Talk to people and gather data if there’s a problem The stated reason for the

problem may not be the root cause

Only when you get to the real problem can you develop a plan

Pages 9-37

What’s going on?

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CommunicationCommunication

Communication is single most important skill for supervisors to learn and continue to develop

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StaffingStaffing

Supervisors monitor staff to ensure that progress is being made based on PHA’s vision for the property

Page 9-17

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StaffingStaffing

Staffing by strategic plan Determine knowledge, skills and attributes

employees must have Conduct job analysis Develop job descriptions Develop performance standards Hire employees – specific hiring process

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StaffingStaffing

Training is an ongoing commitment Can make a difference between terminating a

nonperforming employee and keeping them an asset

Does on-the-job training accomplish PHA’s goals?

You need to understand staff’s training needs

Page 9-18

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Performance ReviewsPerformance Reviews

Review job description, competencies, and performance standards for the position

Review performance reports and data Record major accomplishments, strengths

and weaknesses Describe behaviors – use examples Describe specific needed improvement

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Staff ProductivityStaff Productivity

The key to success for any business is staff Properties require

multi-skilled and efficient staff

Page 9-39

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Staff ProductivityStaff Productivity

Investment in staff development and training is important

People need to know what’s expected of them!

Recognition, a sense of doing meaningful work, and fairness contribute to productivity

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Turning the Property Around Turning the Property Around

Track and monitor If it’s going well, keep doing what you’re

doing If it’s not going in the right direction –

leadership, a plan, and some hard work Leadership and a plan will help you work

smart and not just hard!

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Leadership, a plan, and hard work Look at your project – would you want to live

there? Make recommendations – take an active role Do what needs to be done to fill the units

Work with the asset manager in making strategic decisions

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Leadership, a plan, and hard work Communicate, communicate, communicate Enforce, enforce, enforce Collect, collect, collect Policies and practices help to attract and

retain higher income families…

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Leadership, a plan, and hard work Work well with law enforcement to keep the

project safe Budget wisely to spend money where it’s

going to make the most difference Work well with residents, other PHA

departments – financial, modernization, centralized maintenance and procurement

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Q & AQ & A

All questions welcome

Thank you for participating

Slide Number #99


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