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How the New 'Housing Crisis' Affects Your Property Management Workflows

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How the New 'Housing Crisis' Affects Your Property Management Workflows

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Until recently, the relationship between the government and landlords has been largely, well, "OK." Given the sacrifices your property owners make in order to accommodate difficult tenants—and the way they bend over backward to obey local and federal laws—you’d think the government would provide a few more tax cuts!

That said, it would be inaccurate to say things have been perfect. But they’ve been civil, at least—until now. With legislation concerning "The right to housing" emerging across the nation, it seems like the power dynamic between the government and the people who own their investment properties is changing.

As a property management company, these legalistic knee-jerk reactions to public pressure will definitely have an effect on your business. When property owners suffer under the weight of demands that control everything from how they screen their tenants to what they can charge to keep up with operating costs, you see this ripple back into your own property management workflows.

If you're a property manager operating out of Seattle, you are already well aware of the changing face of rental real estate and the pressure-points that new laws are triggering in Washington. However, the rest of the nation is hardly immune.

A Balancing Act on the Tipping Point

Rent control legislation is nothing new—and even when it goes against basic free-market principles, landlords coalesce and perform their civic duty. However, the government has recently been taking their freedom to regulate to another level! To be fair, each move is part of a strategic approach to combat what the media deems a "housing crisis."

Statue of lady justice

Is it possible to strike a balance between the needs of U.S. citizens and those of landlords? From the perspective of some, as each party sits on their respective ends of the seesaw, the United States government is a playground bully, ready to tip the scales. So is the government a bully—or a thoughtful playground monitor trying to even things out? First, let’s examine the problem.

The Powder Keg

Whether you have a regular home or not, you have the right to vote. While the homeless population doesn’t have the financial wherewithal to hire powerful lobbyists, they have the power of the pen. People who are not homeless but feel they have been treated unfairly by landlords have been up in arms. In some areas of the country, there have been perceived inequities in the frequency of evictions—as well as the demographics of those being asked to leave.

This has given rise to several “-isms” that not only paint landlords in an unfavorable light but give rise to a cycle of anger that may be slowly spiraling out of control. Racism, classism, sexism—the list goes on. And the labeling—fair or not—goes in both directions: socialism, anti-capitalism, fascism.

When the name-calling dust settles, property owners are upset, the government is frustrated, and the nation is disappointed. Those in power have come up with some solutions based on who screams loudest—and, unfortunately, for some landlords these solutions may make more political sense than financial sense.

No Winter Evictions

The Seattle City Council has passed a ban on winter evictions. For three months, a landlord in Seattle may not have the ability to get rid of a Professional Tenant. You can bet that scammers in Seattle are going to take advantage of this one!

For property management companies in Seattle that promise speedy evictions in the face of nightmare tenants, this is going to throw a serious wrench in your property management workflows. Whether or not this measure succeeds in helping Seattle residents, it may start a domino effect as property owners' rights topple across the country.

'More Rent Control, Please!'

While rent control—in many ways—has been accepted as a necessary measure, that doesn’t mean it works. When rent control is instituted, only certain rents are controlled. This ends up increasing the overall price of rent for other areas, and you can see this happening in cities like New York. Why? Not only are your clients hurt by rent control, but it helps encourage gentrification—the very devil it’s designed to destroy.

Most of the solutions seem short-sighted—if not largely ineffective. Either way, what can property management businesses do given the current climate?

Moving Forward as a Property Management Company

As the saying goes, “you can’t fight city hall.” In the end, government officials have a tough job, and they’re under enormous amounts of pressure from those who elect them. Consider that there are only estimated to be about 11 million individual property owners (like what you might work with as a property manager). Compare that to roughly 44 million renter households, and you can quickly see why the scale has started to tip.

Corinthian columns on a government building

That said, while you may have to adjust your property management workflows in the face of shifting regulatory pressures, there are still some proactive steps you can take as a company that can help keep you from hemorrhaging. 

  • Use all legal screening methods available to you in your state. Don’t stop screening; enhance it! Include more questions on your applications to make up for those that get banned. You can still get a complete picture of an applicant.
  • Ask local officials about plans for rent control. Rent control is instituted differently in each area. You can inquire about how it is—and will be—put in place. You can use that information to support your clients looking to expand their portfolios by steering them away from picks that are likely to have their rents controlled.
  • Stay alert and aware of changing legislation: a property management company taken by surprise in the face of a new legal requirement concerning rentals will lose clients who expect them to be knowledgeable.
  • Review your eviction protection policies if you offer them to your clients in areas where eviction-restriction laws are going into effect.
  • Include notices in your property management marketing content that articles concerning the above topics are subject to change, and not intended as legal advice.

Regardless of the situation in your community, the key is to stay informed and keep your clients aware of how changes can affect their rental income. In some ways, the content on your website is a way to do this that can also engage new leads and convert them into customers. However, for this strategy to work, you need a functional and fluid website.

If you haven't been updating your content in the face of shifting legislation, you probably haven't updated your website in a while, either. That means it's time to take advantage of our fast and FREE website audit! Let the property management marketing professionals at Geekly Media help you show the modern face of property management to your clients in the fast-paced and rapidly changing world of rental real estate.

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