Phase 6: Stewardship

Congratulations, you now have a brick-and-mortar building on the ground in your tribal community. This process has likely taken years and hundreds of hours of work for you and your staff. Before you step away from the project, there is a lot that goes into an occupied affordable housing development, including managing the property and remaining in compliance with all the terms laid out by investors, lenders, and grant makers.

This last phase and the considerations contained in this section will help ensure that the work is not wasted and that your new housing development is able to effectively serve the needs of its residents and investors. This section includes:

• Overview of Property Management Tasks
  • Lease up
  • Roles and Responsibilities
  • Marketing and Tenant Selection
  • Financial Management
  • Maintenance
• Compliance
  • Land Use Restriction Agreement
  • Certifying Household Incomes
  • Exemptions
  • Post Year 15 LIHTC Compliance
  • Noncompliance

Overview of Property Management Tasks

To ensure compliance standards are being met and property operations are providing residents a safe and healthy space to live, there needs to be a property management structure in place. The property management structure will depend heavily on the development model chosen, location, cultural context, resources, capacity and the compliance requirements from funding sources.

In tribal communities, often the TDHE or housing division will also manage affordable housing properties in their portfolio, though this is typically not the case in more urban environments. Often there are no other management groups to outsource to, and tribes understand their community best, but management comes with its own responsibilities and expertise so be sure to set aside staff time and expertise to those tasks.

Key property management responsibilities include:

• Security and Safety
• Maintenance and repairs
• Budgeting and financials
• Staffing
• Maintaining and utilizing management information systems
• Leasing, marketing, tenant selection, and eviction
• Compliance with funding sources, including:
• Recordkeeping for the waitlist
• Recordkeeping for tenants’ applications and income qualifications;
• Performing and working with third-party inspectors;
• Undergoing audits;
• Performing tenant-income verification certifications;
• Noncompliance and retention provisions;
• Adhering to rent increase restrictions; and
• Accounting for utility allowances
• Coordinating and meeting regularly with service providers (in the case of housing with supportive services such as Permanent Supportive Housing or Assisted Living
• Yearly trainings on topics like: Fair Housing, Mental Health First Aid, De-escalation, etc.

Responsibilities of a Property Manager

Whether you contract out or have internal staff manage the property, you will need to set clear expectations of the day-to-day tasks and responsibilities of the Property Manager.

The key activities of a Property Manager include:

• Collecting rent
• Developing and maintaining updated policies and procedures that are compliant with applicable funding sources for affordable housing program requirements
• Ensuring property compliance with all applicable regulations
• Maintaining tenant files and property records, including following required or recommended file retention periods
• Providing preventative and routine maintenance and repairs
• Providing appropriate tenant and stakeholder communication and customer service
• Coordination with services providers in the case of Permanent Supportive Housing

In addition, property managers should execute all the above functions in a culturally competent manner that factors in tribal culture.

There are a few common services that can be offered to build transparent relationships between tenants and owners and build the capacity for the community to navigate rental terms successfully. Resident-centered management practices to strengthen tenant and owner relationships include:

• Resolve tenant issues in a timely manner
• Provide strong, quality service while setting appropriate expectations about that service
• Provide routine and cost-efficient maintenance to maintain high-quality housing

To build the capacity of the communities to become successful renters include educational and flexible practices such as:

• Partner with Tribal housing authorities that offer rental education focused on giving tribal members the necessary skills to become successful renters.
• Look at providing flexibility on rent collection payment dates if tenants are relying on fixed income sources. 

The property manager can gain a firm understanding of NAHSADA and IHBG compliance by attending training  and meetings that are offered by HUD, Office of Public & Indian Housing, National American Indian Housing Council, or the tribal housing authorities on topics such as NAHASDA essentials.

Marketing and tenant selection

There will need to be established tenant-selection and eligibility policies and procedures in place. Based on your mission and funding sources, you will set priorities or preferences on applicants that will be eligible or rank higher in preference for your development. Similarly, you will establish ongoing occupancy requirements that follow any local, state, or federal funding regulations. 

Marketing can be tailored specifically for Native community members. Federally recognized tribes are not subject to all of fair housing marketing requirements as they are outlined by USDA and HUD, which gives tribes flexibility to create a marketing and outreach strategy tailored to the cultural context of the tribal community. 

Resident services

A Property Manager can provide resident services to enhance a resident’s quality of life. When engaging future residents and local housing stakeholders there is an opportunity to identify services needed for future residents. Services might include:

• Childcare
• Financial services and education
• Health and wellness
• Community empowerment and space
• Access to transportation
• Access to internet
• Cultural activities
• Proximity to other amenities and services in the broader community

For these services to become a reality, they need to be appropriately planned and budgeted. Selecting a service provider already established within the community offers an advantageous position as they are already established with the community and provide a level of expertise to the service being provided. Once the type of resident service is selected, there needs to be consideration of staffing capacity, space and a general operating costs factor within the operating budget.

Wait list

Maintaining an active waiting list helps to shorten turnover times and can provide valuable data related to future housing needs. You may want to consider collecting information like veteran status, elderly status, meeting federal definitions of disabled, tribal enrollment of household, number of families, income levels, and interest or likelihood of homeownership as part of your waitlist data collection. Some tribes have had to close their waiting list if it is over a certain number of families but think carefully before doing so because there can be benefits in using the waitlist as a tool in planning to meet housing needs. It is best practice to timestamp and date any applications for fairness and transparency.

Financial management

Property management also entails proper financial management, which includes developing an annual budget, maintaining operating and emergency reserves, and maintaining accountability for finances. Asset management includes activities that maintain and enhance a property over its lifetime.

An operating budget is included as part of the pro-forma package and can be used to identify ongoing expenses and assess risk of operating expense shortfalls. An initial operation budget can be made with a budget estimate that will be adjusted as you determine the revenue generation needed to cover expenses. Once the property is operating, the adjustments to the operating budget will need to be monitored based on the development’s operating expenses and adjusted when necessary.

Rent collection is one of the key resources to fund operating expenses. An analysis of your pro forma can assist in gauging the impact this revenue source will bring. Management must monitor the rent collection rate on a regular basis and the lease agreement should establish guidelines for the rent collection process. Suggested practices for rent collection include:

• Having a flexible grace period prior to charging a late fee can reduce turnover rates and help set realistic expectations with tenants.

• Promoting alternative payment options for tenants, including in-person, mail-in, or drop-off

• Connect tenants with local housing or financial counseling

In order to sustain the long-term viability of your development, you should have operating and replacement reserves to cover anticipated and unexpected losses over the course of time. Some funders require minimum operating reserves equal to at least six months of projected annual operating expenses and six months of debt service payments. Replacement reserves are established on a per Unit per Annum basis and should be reflected in your operating pro-forma.

Maintenance

As owner, you are responsible for the ongoing maintenance of the property. Maintenance planning can help you to provide residents with responsive, cost-effective, and quality repairs and to preserve the life of your development. The key to carrying out these functions is good planning and organization.

Maintenance programming should include a maintenance staffing plan that is supported by the development budget and based on the development’s characteristics. Maintenance staffing should be adequate to cover the routine needs of the property and unanticipated or special projects.

A maintenance work priority system ensures that the most important maintenance work is completed in order of need, considers certain efficiencies, and minimizes vacancy loss, which also helps minimize rental revenue loss. The priority system ensures quality service to tenants and minimizes progressive damage to your development. Check out a complete maintenance checklist here, but priority categories may include:

• emergencies that are threats to life, health, and safety of tenants or the development;
• urgent items that present a potential threat to the health and safety of tenants if not addressed;
• planned and/or preventative maintenance, including daily maintenance of grounds and facilities;
• vacant-unit turnover; and
• routine maintenance services generated by tenant requests or staff observations.

Establishing a Work Order System

In order to track all the maintenance tasks in your priority categories, you should have a work order system that includes all work request information: description of work, priority category, cost to complete, days to complete, and hours to perform. This information helps plan maintenance tasks and evaluate maintenance performance. To achieve the greatest effectiveness from the work order system, all work requests and activities performed by maintenance staff must be recorded on work orders.

Vacancy Turnaround

Vacant-unit turnaround requires close coordination between property management and maintenance. It begins when a unit is turned over to maintenance from property management upon tenant move-out and ends when the unit is turned back over from maintenance to property management when the unit is complete and ready for the next tenant, also known as make-ready time. Make-ready time should last no longer than 21 days (about 3 weeks).

Inspections

Maintenance should work with property management to develop a plan and schedule for periodic site and unit inspections. Inspections should be conducted in accordance with funder physical inspection standards. It is required to give tenants notice prior to inspecting their units. Schedule for these internal inspections prior to third-party inspections, such as REAC inspections, and consider using their inspection forms as a reference.

Regular Maintenance

A preventative maintenance program includes the regularly scheduled servicing of all equipment and systems. Each system must be identified, have its servicing cycles determined, and then assigned a responsible maintenance staff member to the scheduled inspection and servicing. A ground maintenance schedule should also be established that may include items such as fertilization, mowing, pruning, and mulching. Adapt both maintenance programming and inspections to comply with local and state building codes. A maintenance program can also be used to plan for and respond to natural disasters alongside a business continuity plan.[79]