Rents Soar, but Raises for
Property Managers Plunge, NMHC Says

By JACK LYNE • Site Selection Executive Editor of Interactive Publishing

The much-discussed trickle-down effect isn't trickling down for property managers in the multi-housing sector.

That's one of the major findings in a new 200-page report just released by the National Multi-Housing Council (NMHC at www.nmhc.org), a Washington, D.C.-based advocacy group for the rental housing industry. The study covers compensation data for 18 different job titles in 85 U.S. geographic markets.

The NMHC found that property management executives in the multi-housing industry will receive an average raise of 5.5 percent this year, a significant drop from the 7 percent level of 1999's average raise. And the average raise will fall lower still in 2001, to 5.1 percent, the NHMC study predicts.

The study projected an even less promising future for salary raises for non-executives in rental housing property management. Those employees, said the study, will see their average raises falling from 5.4 percent in 1999 to 4.7 percent in 2000 and to 4.6 percent in 2001.

Study Finds 50 Percent Turnover

Those modest raises came despite the rapidly rising rents in many markets that are largely going into property owners' pockets.

That discrepancy may be a factor in the industry's revolving-door turnover. The study documented a whopping 50 percent turnover rate among rental housing management professionals. The voluntary turnover rate was 35 percent, the study reported.

"With property management turnover rates averaging approximately 50 percent a year, the ability to determine whether a firm's wage/benefit offers are a factor in its employee turnovers is a critical competitive advantage," said NMHC Vice President of Property Management Jay Harris. "This survey will provide industry participants with a clearer picture of market variances in compensation levels and enable them to assess the competitiveness of their wage and benefit packages in each part of their portfolio."

The NMHC survey, which utilized the services of Watson Wyatt Data Services (www.watsonwyatt.com), found that one major benefit that could help stanch turnover was often missing. Only 33 percent of surveyed firms are offering long-term incentives to at least one of the property management positions the study profiled. On the other hand, 85 percent of surveyed firms have some type of annual incentive/bonus plan for at least one of the surveyed positions. Most reported that their plans have formal payout targets and/or maximums.

Geography as Payday Destiny?

The pay levels documented in the NMHC study are relatively modest -- at least when compared with managers of other, higher-end property types. The study found that individuals with the title of "vice president of property operations" have the highest pay levels in multi-housing property management. Those executives' median annual salary is US$130,700, with incentives and bonus pay accounting for $28,700 of that total.

Pay levels drop substantially, however, for many lower-level positions in multi-housing property management. For example, the study found that the median salary for leasing consultants is $21,500, with incentives and bonus pay accounting for $3,200 of that total.

Geography, however, is often part of payday destiny, the NMHC survey demonstrated. The report pinpointed significant geographical variations in compensation.

In Jackson, Miss., for example, the median total cash compensation for property managers handling 300-to-500 unit properties was $33,800. In San Francisco, the median pay for same job was $54,800, according to the report. The median compensation for all surveyed managers of 300-to-500 unit properties was $38,000.

For other property management positions, however, the study found little or no pay variations. For example, the median total compensation for leasing consultants is $25,600 in both Providence, R.I., and Los Angeles.