Apartment Management Once Again Proving Recession-Proof

Dubbed an “essential industry” during the pandemic, not even a hint of a recession, or the latest technology, is forcing layoffs.

By Paul Bergeron |

6 minute read

Headlines about significant job layoffs are appearing almost daily as the country moves into 2023 with “recession” on many minds.

Workforce reductions have mostly been in the technology industry, but lately, they are showing up elsewhere. But not in apartment management.

Apartment management professionals say this industry is one that has proven resilient in the face of economic downturns – including significant ones. 

“In the prior recession years, I did not see any site-level or corporate-level layoffs occur,” says industry veteran Julie Brawn-Whitesides, CPM, Director of Asset Management, Vintage Housing.

“In this current economy, we are still facing a labor shortage in our industry, especially for maintenance positions – so it’s doubtful there will be any layoffs in this group of associates, especially.”

Fortifying this opinion, operators says that with so much apartment development on the way this year and beyond, that will equate to more jobs for the industry. 

“It has been said that when the economy takes a downturn, we see more renters, and when the economy is on the upswing, more apartments are developed – which ultimately means more renters as well,” Brawn-Whitesides says.

Not Yet Replacing People with Technology

Of those incorporating centralized management models as well as those implementing more automation through artificial intelligence (AI)-based technology, they say greater efficiencies have come, but subsequent layoffs as a result have not.

Gigi Giannoni, Senior VP, Customer Experience & Marketing, Gables Residential, says changes in staffing may be associated with modern technologies, “but we are seeing more of a shift in roles and responsibilities as they relate to traditional onsite roles. 

“Well positioned organizations will be able to take advantage of their current talent pool to combat current labor shortages that will continue to exist in the near term.

“Customer expectations continue to increase relative to the service and living experience at our communities. When we can look at staffing holistically, rather than by location, it allows for economies of scale as well as greater flexibility in how our human resources can be applied to enhance our prospects and residents overall experience,” Giannoni says.

Wendy Simpson, MBA, Senior Vice President of Marketing, Edgewood Management | Vantage Management, says her onsite teams’ responsibilities continue to evolve, and that she is using technology to support the business and her teams equally. 

“For us, it’s not about replacing people with technology,” says Simpson.

Mike Brewer, Chief Operating Officer, RADCO Residential, says he senses that is coming soon.

“It is important to note that technology cannot fully replace the human element in property management, as it can’t build relationships, resolve complex issues and provide the personal touch that many prospects and residents appreciate, especially in the active adult community,” Brewer says.

“Property management requires human skills such as problem-solving, negotiation and decision-making, which technology cannot fully replicate today. This will change with the AI tsunami that will make landfall in the multifamily industry this year.”

Facing Negative NOI, Payroll Costs Will be Examined

Paula Munger, CRE®, Vice President, Research with the National Apartment Association, says a case that property management jobs are recession-proof can “certainly” be made.

“After all, we have been deemed an essential industry during the pandemic,” Munger says.

In the final of a series of monthly surveys of NAA members from April to September 2020, Munger asked about changes to staffing: 62% had no changes to staffing during the pandemic downturn and 14% actually hired new employees; 12% either furloughed or laid off employees. 

“That’s not insignificant,” she says. “Generally speaking, our members seem cautiously optimistic about 2023, but certainly, those anticipating negative NOI – and they are few and far between – will have no choice but to look at payroll costs.

“‘Labor hoarding’ will continue, though, unless we see some sizeable cracks in the labor market – and we’re definitely not there yet.”

Can’t Find Workers, Can Find Technology

Brawn-Whitesides says there could be a shift toward hiring more part-time workers rather than full-time employees and reducing hours of operation if necessary.

Karen Kossow, Marketing Director, Paradigm Companies, says within her company, there’s no talk of any layoffs.

“We’ve continued to have issues with hiring,” she says. “Our ability to fill positions is improving, but still not where we need to be.”

In response, Kossow says that for a good while her company has been using AI and video technology in its online leasing processes.

“It has allowed us to close our offices on Sundays to take some of the burdens off our leasing teams, especially those with staffing challenges,” Kossow says.

To combat a shortage of maintenance staff, Paradigm uses a program that has residents submit maintenance requests to an outsourced person through a digital tool that can reply via text to the resident, asking for more details.

“If it’s possible for the resident to fix the issue themselves – such as replacing light bulbs, resetting garbage disposals or breakers, etc. – they will ask the resident if they’d like for the representative to video chat them through how to do it themselves,” Kossow says.

“If the resident doesn’t want to, that’s fine and it goes through the normal ticket process,” she says. 

Brawn-Whitesides says centralized processes are good for efficiency, but she’s not sure they are good for residents’ overall experience.

“It might make it easy to pay rent online,” she says, “but don’t close the office to residents who want to meet with a management rep or a maintenance rep. These relationships make a huge difference in retention.”

But she says there may be a segment of renters – such as ultra-Millennials – who desire full automation: for a reduction in people, “but not a reduction from a consistent, every-property-should-do this perspective.”

Simpson says Edgewood Management |Vantage Management is using chatbots to assist with more than 1,500 greetings each month, which lead to tour appointments.

“That conversion was a real game-changer given that it saved our teams 54 hours per property per month,” Simpson says. “You won’t find a property manager anywhere who wouldn’t like to have that kind of time back so they can focus on managing and supporting their teams and their customers in other impactful ways.”

However, she says she doesn’t see any of today’s technology performing the duties of any one entire position.

“Even still, I believe our industry needs to shake the dated thinking of being physically present for every touch point with a customer,” Simpson says.

“Our customers have been showing us for years now that they want to self-serve conversations, tours, payments, leasing and maintenance.”

Upskilling and Reskilling Brings Job Security

Nichole Oswald, Regional Manager, RPM Living, says when there’s a change in management companies, people might find themselves out of work, “but there are always companies that are hiring. For the confident and driven, a management change and/or disposition is not an issue.

“In a perfect scenario, centralized leasing may reduce onsite staff – and this approach is usually requested by ownership to reduce onsite headcount – but typically, the overall headcount does not change too much.”

Instead, Oswald says, “a leasing consultant might switch to a leasing coordinator role in a centralized model. An assistant property manager may switch to a bookkeeper role in a centralized model, etc.”

Oswald says the beauty of the apartment industry is that there are so many paths available to people, which creates a unique long-term career trajectory.

Brewer says it’s more important to ask whether property management team members are upskilled or reskilled enough to weather the oncoming impact of centralized and AI-fueled business models.

“Yes, there are scenarios where technology is performing some of the traditional workflows carried out by team members,” he says.

“Therefore, property management professionals who can adapt and work alongside technology, such as learning how to use iterative AI tools, are in a better position to maintain their employability in the multifamily space, as it will enhance their productivity and efficiency, making them more valuable to their respective companies.”

Paul Bergeron is a freelance writer for units Magazine.