I recently took over as the new chair of the National Multifamily Housing Council, a position that has been held by many of my mentors, friends and industry legends. It is an opportunity to continue the great work that they have started and a way to give back to a business that has given so much to me.
As I considered the top priorities for our industry, one common theme emerged: disruption. This, of course, includes new technologies, but it’s also much broader than that. It’s about all the things that can put wrinkles in the way we do business, creating either hurdles or opportunities, depending on how prepared we are for these new folds.
With that in mind, I have six key areas where I see the greatest potential for disruption and, subsequently, where I will be focusing my attention as chair.
1. The Regulatory Environment
Government has always had the potential to be the most disruptive force of all. The multifamily industry is facing increasing pressure to meet booming demand for apartments across all income levels; yet, an overly burdensome regulatory infrastructure is forcing owners, operators and capital providers to manage numerous compliance hurdles and rising costs. These only make the problem worse.
NMHC continue to urge policymakers to reject quick-fix solutions such as rent stabilization and rent control or costly regulatory mandates and onerous inclusionary zoning requirements. As an industry we will continue to advocate for real solutions that help to address the skyrocketing cost of regulation, labor and materials and provide assistance for families and individuals in need.
2. Housing Finance Reform
The success of our industry starts and stops with our ability to access capital. For that reason, GSE reform will remain a focus of my tenure as chair. I have already spent time with Federal Housing Finance Agency Director Mark Calabria, including on stage last fall at the NMHC meeting when he announced the much-welcomed 2020 multifamily lending cap figures, and I believe we will have a constructive relationship with him going forward.
We must remain vigilant as broad GSE reform proposals surface in the Administration and Congress, but also to more nuanced changes being considered. Even the smallest changes in policy related to Fannie Mae and Freddie Mac can dramatically affect all of us.
3. Sustainability and Resiliency
As an industry, we have been improving the sustainability quotient of our properties by making smart decisions about building locations, materials and systems. However, we need to broaden the discussion around sustainability to focus more on resiliency. We need to look no further than the increasingly frequent severe storms and fires to see the forces of climate disruption.
We need to collectively lower our carbon footprint. To help multifamily property owners adapt to these future challenges, NMHC will continue its efforts to advance policies that strengthen communities through infrastructure planning and development, building technology, tax policy and financing tools. We are a $3 trillion-dollar industry. We can make a difference.
4. Diversity and Inclusion
Diversity and inclusion not only are integral to the bottom line but also an increasingly important part of environmental, social and governance reporting and corporate social responsibility. There is no doubt that the future prosperity of our industry depends on our ability to attract and grow talented leaders with diverse backgrounds and experiences.
We continue to expand on our successes in this area. More than 450 multifamily executives signed up to attend NMHC’s second Women’s Event, and in April, we will once again hold our annual Leadership Forum on Diversity and Inclusion.
We are also strengthening our partnerships with like-minded organizations, such as Commercial Real Estate Women, or the CREW Network as its most often called, the Real Estate Executive Council and Fannie Mae’s Future Housing Leaders program.
During my term as chair, NMHC will continue to champion innovation. Billions have been poured into new real estate technologies, and they are causing us to rethink our business models.
From artificial intelligence to smart home automation, data privacy, electric and autonomous cars, new flexible leasing business models and potentially game-changing digital connectivity offerings like 5G, this is an exciting and challenging time for the industry.
NMHC’s OPTECH Conference & Exposition continues to be the destination for industry leaders to discuss how technology effects the management and operation of our assets and preview new technologies and innovation.
With tech and innovation moving so fast, we need to continue to get in front of Congress and federal agencies like the Federal Communications Commission as they consider regulations with potentially serious implications for innovation in our space.
6. Housing Affordability
Our industry has been disrupted because of our success. The booming demand for rental housing and the ever escalating cost to build it has created a shortage of quality affordable apartments. Housing affordability has reached crisis mode and, for the first time in my career, presidential candidates are talking about it. Furthermore, today’s political climate sees housing as a fundamental right for every American, which is a big shift.
Our industry must continue the conversation about solving housing affordability. NMHC will continue to inform the discussion with more research and data, and we will create a roadmap of core principals to solve it in practical and productive ways that are sensitive to all stakeholders.
These are big challenges for the industry over the next few years. And while they represent threats to our industry if left alone, they also offer the potential to advance our industry and create opportunity for our members. But to move in that direction, we must remain watchful, open for dialogue and committed to moving our industry forward.
David Schwartz is CEO, chairman and co-founder of Chicago-based Waterton. He was recently elected to serve as chair of the National Multifamily Housing Council for 2020-2021.