Ready for anything

For this issue’s Committee Central, affordable housing experts Judy Weber, CPM®; Gwen Volk, CPM®, NAHP-e®, RAM®, FHC®, CPO®, SHCM®, HCCP®; and Eileen Wirth, CPM®, HCCP®, SHCM®, NAHP-e®, share what it takes to manage affordable housing and how training and development are critical to success in this highly regulated environment.

What skills and knowledge will property managers gain from affordable housing training that they may not acquire through general property management courses?

Judy Weber, CPM®, VIVA Consulting, LLC

Judy Weber: Most affordable housing has significantly more leasing and occupancy requirements than market-rate housing. Regulatory compliance is a critical component of a property manager’s job. This is accompanied by more administrative and physical plant oversight by government agencies, such as state housing finance agencies and the Department of Housing and Urban Development (HUD). In addition, the financing is often complex and comes with multiple debt and equity sources with their own reporting and oversight protocols. 

Gwen Volk: While general property management courses are valuable to a manager of affordable housing, they do not touch on topics unique to these programs. For example, properties that are the direct recipients of federal financial assistance, such as HUD, Rural Development, and HOME, must comply with Section 504 of the Rehabilitation Act of 1973, a law that ensures persons with disabilities will have equal access to and the opportunity to fully enjoy their housing. This law requires the owner to pay for reasonable modifications, provide affirmative outreach and communication, and make their programs and services equally available to persons with disabilities beyond Fair Housing Act requirements.

Eileen Wirth: Even though conventional and affordable properties are fundamentally different, you run the properties the same. You have to rent the apartments and collect the rent. But with affordable housing, there is an extra layer of compliance: You have to ensure that everyone is qualified to live there by income and that you don’t charge too much rent. So, just understanding that extra layer and understanding that you could be balancing several different programs—federal, state, and local—is important.

How does affordable housing training contribute to career advancement opportunities for property managers?

Judy Weber: Affordable housing management has become increasingly complex, and experienced, skilled staff are in high demand. Affordable housing has many property management positions, from assistant property managers (often called community managers) to regional managers. Maintenance staff are often most in demand. Compliance staff are also in high demand.

Gwen Volk, CPM®, NAHP-e®, RAM®, FHC®, CPO®, SHCM®, HCCP®, INFOCUS, INC.

Gwen Volk: The best management companies hire individuals who are certified in compliance with the programs they manage, be it tax credit, HUD Multifamily programs, Rural Development 515 with Rental Assistance, HOME, Housing Trust Fund, or other affordable housing programs.

Eileen Wirth: A property manager with affordable housing training may be invaluable to a company that has traditionally done all conventional when a portfolio with affordable properties becomes available for sale and is acquired. It’s a great opportunity to enter a new area and penetrate a new market niche. Someone who has learned about affordable housing programs can say, “I understand how these programs work. I have this knowledge. Give me the chance to get some practical experience with it.”

How does affordable housing training enhance a property manager’s ability to navigate regulatory challenges and ensure compliance?

Judy Weber: Regulatory challenges and compliance requirements are key elements of an affordable housing manager’s daily life. A strong foundation in their basics is fundamental to identifying the key ways to stay abreast of any changes and where to get the best training to be as current as possible.

Gwen Volk: Compliance is key to affordable housing management. The Low-Income Housing Tax Credit Program relies on compliance with the IRS Code Section 42 to keep the housing credits flowing to the investors throughout the 15-year compliance period and prevent loss or recapture of the credits.

Eileen Wirth, CPM®, HCCP®, SHCM®, NAHP-e®, MEND, Inc., AMO®

Eileen Wirth: The regulatory environment in affordable housing is continually evolving. As a result, ongoing training is critical to navigating these changes and ensuring successful compliance with updated regulations.

Can you provide examples of how property managers who understand the nuances of affordable housing have improved tenant retention and satisfaction rates?

Judy Weber: During COVID, several tenants lost their jobs and got behind in their rents. Emergency rental relief programs sprang up across the country, funded by the federal government but administered by state governments to address this issue. Affordable housing property managers familiar with income certifying programs knew how to navigate programs that provided residents rental subsidies or relief based on income certification. The ease with which these property managers could counsel their residents into receiving rental relief to stay current in their rents prevented thousands of properties from becoming delinquent in their mortgage and other obligations.

Gwen Volk: The tax credit program requires the completion of a lot of paperwork but does not provide any subsidy. The manager must be able to explain the program and its benefits to residents to attract them and retain compliant residents willing to cooperate with the ongoing certification requirements.

Eileen Wirth: While affordable housing residents don’t have the option to easily move because they’re constrained financially, property managers need to be aware of competition from new affordable housing projects being built in their area. Property managers who’ve learned to keep their current residents satisfied can help their properties succeed.

How does affordable housing training contribute to a property manager’s ability to effectively manage financial aspects and optimize operational efficiency?

Judy Weber: Affordable housing properties frequently operate on very modest operating margins. Their property managers need to have a strong understanding of the financial aspects of their properties to operate efficiently and effectively within these narrow constraints.

Gwen Volk: Financial management of affordable housing programs of HUD Multifamily and Rural Development are subject to scrutiny at the federal level. Most must submit audited financial statements prepared by an approved accounting firm. The rules surrounding the proper use of funds, such as what expenses must be covered by the management fee versus payable from the operating account, are complicated, for example. Federal oversight looks for “waste, fraud, and misuse of funds,” and the consequences of a manager misunderstanding what falls into this category can have dire consequences for the owner.

Eileen Wirth: With affordable housing in general, your income stream is regulated more, so you have to have the mindset of “do more with less.” Sometimes, you must make tough decisions for a project like, can we do this this year? Next year? Can this be done in phases over a couple of years?