Helping Landlords Help You
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PART FIVE: Helping Landlords Help You
There should be a range of housing options for clients of your housing program to consider. In the best of circumstances this will include everything from permanent supportive housing to private market housing (with or without vouchers or rent supplements) and public/social housing. It will hopefully include a wide variety of units from multi-unit residential buildings to suites in the secondary market like basement suites or rented houses. It may also include the likes of well-maintained and managed rooming houses or boarding homes. And I could go on with the diverse types of housing. The key is to have a range of options that clients can CHOOSE from.
Choice is fundamental to housing program success. If your organization does housing placements instead of offering housing choices, you are missing an important part of program success. Inone research study it found that clients who felt that they had a choice in where they lived were most happy with their housing, whereas those who felt that had less choice were much less happy with their housing. The latter is also more likely to move and/or experience a return to homelessness.
For the purpose of this blog, I want to focus attention on working with private market landlords – even if your organization does not have access to any type of financial assistance to provide to landlords. In a perfect world there would be an infinite number of subsidies to provide; immediate access to subsidized housing; a balanced (or renter-friendly) vacancy rate; and rental rates comparable to the financial benefits that poor people receive on welfare. The reality, though, is that this is not the case. So here are some approaches that have proven to be effective in an imperfect world to gain access to units in the private market, often at a reduced rate.
As I mentioned in a previous part of the series, social workers tend not to make great landlords and landlords tend not to be great social workers. Sure, there are exceptions, but I think you would agree with me that these are separate disciplines.
It may be nice to think that landlords want to rent to your clients because they have big hearts and want to make a huge difference in their community. And sure, there may be some like this in your community. However, it is generally my experience that housing programs are more successful when you attempt to meet landlords where they are at and meet their interests, rather than vice versa.
Landlords are in the business of making money. Helping landlords make more money is entirely possible by you, even without subsidies. Consider some of the things that cost landlords money: underperforming parts of their building portfolio; vacancy loss for unrented units; rent collection; advertising; showing units; and, preparing units as part of turnover.
Larger landlords (or property management firms) that have several buildings in their portfolio are likely to have one or more buildings – or a small grouping of units within some buildings – that are underperforming. These are buildings/units that experience greater degree of turnover and more vacancy loss. When approaching prospective landlords, keep this in mind. Part of your pitch should be that you want to help them rent out units in parts of their portfolio that are underperforming. (To be clear, this doesn’t mean there is anything physically wrong with the units. All units should be in habitable condition.)
Further to this, when approaching landlords ask them if there are specific units where they experience greater vacancy loss. This is like the previous paragraph on underperforming parts of the portfolio. Approaching at this angle, the question you may want to ask landlords is, “Would you like greater revenue stability (or predictability) from some of your units that frequently go vacant?”
It is fair to say that all landlords, regardless of size, expend resources to collect rent. There are bookkeeping and accounting aspects of this task. There can be person-hours spent knocking on doors and trying to track tenants down who didn’t show up at a rental office to submit their rent. Here, again, you can help landlords. Whenever possible, have your clients hooked up with third party rent payments directly to the landlord. (As an aside, I think this is analogous to how my mortgage gets paid – directly from my bank account to my lender.) This can come from income supports or even an employer. What it tends to mean is a predictable process for landlords to receive rent payments with less resources expended.
Related to payment of rent, every housing program that I am a part of requires the client support worker to contact each of their landlords by the fifth business day of every month to ensure that the landlord received their rent on time and in full. Even with third party payment of rent, I find that doing this decreases issues that may stem from some sort of bureaucratic glitch. It also creates another communication vehicle for the landlord to share their insights on particular tenant situations.
To streamline communication – thereby also reducing potential person hour expenses for the landlord – have the Housing Locator staff person on your team be the only phone number and name that a landlord has to keep handy if they want to call to talk about an issue or even praise of how well things are going. It is not helpful to landlords to have a list of five or ten or even more workers that they have to keep straight from across multiple organizations related to tenants in their buildings that are involved in your housing program.
In communities where there are multiple housing programs operating, I strongly suggest that Housing Locators work cooperatively rather than competitively. To some this is going to sound threatening, and I have heard people say many times, “I’m not going to share my landlord list with (insert name of person or organization here)”. But the reality is, in the same way that landlords shouldn’t have to keep track of multiple housing support workers, they can equally despise having numerous Housing Locators contacting them from different organizations about the same pocket of units. I have seen some communities where the Housing Locator function has even been centralized across different organizations to tackle this very issue.
I never advocate for a landlord to provide all of their vacancy to one organization or to one program. A general rule of thumb is that unless there are permanent supports on site 24 hours a day, no more than 15% of the units in any given building should be occupied by tenants actively receiving case management supports. More than that and the general composition and character of the building can change. (This was a particularly painful lesson to learn as a practitioner.) The place I want to get to with landlords, however is for them to offer a program a predictable number of units across their portfolio on either a monthly or annual basis. This makes it easier to plan and create choices for clients. It allows the landlord to make informed choices about what part of their portfolio they want to strategically target. It also decreases their advertising costs and can reduce unit showing costs because they have greater say in when and how units are shown. (In a few situations I have even seen landlords that have the housing support workers or Housing Locators show the units to their clients without a superintendent present…though I have mixed feelings about this.)
A popular question/concern is about damage that may be caused to a unit. This relates to damage inflicted by a client, not the usual wear and tear that may occur regardless of who the tenant is. There are a few things that I have found to be very helpful in decreasing the likelihood of damages:
Ensure clients are making an informed choice of where they want to live. My experience as a practitioner suggests that the more choice people have, the more pride in their unit they have and the less damage that occurs.
Make sure the client has their basic needs met in the apartment on the day of move in (furnishings, food, cleaning supplies, etc.). If you really want the client to feel like they are creating a place of their own, allow them to pick out the furnishings that they want.
Focus on the activities that may be necessary to help convert the apartment into a home as one of the first meaningful daily activities that you encourage with the client. This includes things like putting up knick-knacks, photos of important people in their life, plants, newspaper clippings or posters, etc.
Ask the client before they move in “What do you think it means to be a responsible tenant?” Ask them that again when they move in and around the first time that rent is due.
Have housing support workers/case managers knock on the superintendent’s door (if there is a super on site) every time they go to visit a client just to let them know that they are around. This gives the superintendent a chance to bring up any issues. It also gives the landlord assurance that you are doing what you said you’d be doing and providing on-site supports.
Deliver supports in the client’s home. This gives you a chance to see first hand the condition of the unit.
If there is minor damage (e.g., a hole punched in the wall; a cupboard door ripped off) ask the client “How do you think you should go about telling the landlord about this? What would be a good outcome of telling the landlord about it? What do you think would be appropriate compensation or repayment for the damages? How might you convince the landlord that this won’t happen again?” (I can’t tell you how many times I have seen this save a tenancy.)
As the leader of a very large housing program, I had a small pocket of resources for exceptional circumstances. It amounted to about $20,000 a year that I could draw from. I used it only in exceptional circumstances and I never advertised to landlords that the pocket of money existed. Never did I spend the $20,000 in any given year. I attribute this to the suggestions and tips noted above.
When I first approach landlords about accessing units in their portfolio, I don’t start with a pitch that focuses on housing homeless people. I had a phenomenal Housing Locator once with incredible business savvy who taught me that was a dead-end before going any further. What I learned was to focus on a pool of tenants that I had access to which could help them meet their business objectives. I learned to focus part of the conversation to be about how all of the prospective tenants we had to offer them came with supports to help negotiate situations that may arise, which is something that their other tenants did not have. I also learned about pitching the direct payment of rent. The closing of the pitch – which again I learned from a masterful person who knew the ins and outs of the industry – was to ask the landlords to let us vet the potential tenants to be the right fit for their buildings…that they didn’t need to worry about credit checks or references, which would just be more time consuming on their end.
There are differing views in housing programs about the lease structure with the landlords. Some programs like to use head leases whereby the non-profit agency enters into the legal contract with the landlord for the unit and the clients, in essence, become sub-leasers. For those organizations that are happy with that and have the insurance to cover that sort of liability, I can see how it can be successful. My preference, however, is always to see the lease directly between the landlord and the client. For one, I think it further empowers the client. For another – and very practically speaking – it decreases potential liability in the off chance that something goes terribly wrong with the unit.
Maintaining the relationship with landlords is the next key. As previously mentioned, I want support workers to make sure rent is paid each month and to stop by and say hello when there is an on-site superintendent. I want everyone to be clear that we are never going to divulge private information about the tenant. What this attempts to do is create a forum where the landlord or superintendent can share information with us and gives them a sense of certainty that when we say our clients have supports, they can actually see the support person. I have also found it very effective, however, to create a landlord roundtable. About four times a year I advocate for bringing together all of the landlords involved with the program and structure an agenda where they can talk about both issues and solutions. Truth be told, the first few meetings will be littered with some program complaints. And landlords that attend the meeting have to know that you cannot and will not talk about issues regarding a specific tenant. There is something magical that happens a few meetings in, however, where landlords start to share ideas about addressing common issues as well as celebrating program successes. I have seen some landlord roundtables where a landlord become a co-chair of the meetings as well. This can be very effective.
I know that when housing programs see landlords as a program partner as opposed to just a resource to be consumed they get more access to units, more effective problem-solving and can also get positive press and accolades from within the landlord community. I remember when the World Habitat Awards were reviewing a program that I was operating, the endorsement of some of the landlords they spoke with was one of the overwhelming positives that the evaluators took away from the experience. I also remain grateful that when I was first starting a rather successful housing program and using this approach that it was the landlord community that got behind the approach early and encouraged their colleagues (and competitors) to get involved because they saw it as a good business relationship with good communication. This was in an environment with very low vacancy rates and high rents. We were able to negotiate rent reductions in exchange for helping them with underperforming parts of their portfolio.
I am not so naïve as to think that all landlord relationships are going to be perfect. They aren’t. As a very pragmatic practitioner, I also know, however, that there are a lot of landlords out there eager to maximize the profit potential of their portfolio. I have seen how reducing vacancy loss can result in rent reductions. I have seen effective problem solving rather than evictions when there are damages caused. I have seen communities actually become healthier with the addition of housing program tenants. Landlords should be seen as a partner in the process. Without them having an effective housing program is going to be very, very difficult.
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Iain De Jong has assisted many communities that operate housing programs in tapping into the potential within the local housing market, regardless of vacancy rates or average rents. With a strong business perspective and the view that landlords are a partner, not just a resource to be consumed, the relationship can be an ongoing positive and proactive one, working to the benefit of the landlord community and people seeking housing. If you’d like to learn more about the approach or various business models that can be used to make a pitch to landlords, drop Iain a note atidejong@orgcode.com
