Rising Operating Expenses Slam Multifamily Industry
According to Yardi Matrix data, national total operating expenses for multifamily properties increased 13% from 2020 to 2022. Only two markets saw a slight decrease in operating expenses from 2021 to 2022, while the majority saw increases over 5%.
“Operating expenses are up across the board. In a year where many owners are impacted by massive increases in insurance, taxes, and rising interest rates, the pressure to operate on less is very real,” says Elizabeth Meyers, director of operations, Denver, for Kairoi Residential. “Different communities are impacted in different ways depending on the market and the way they are financed.”
Jeff Adler, vice president at Yardi Matrix, says just as rents increased in a lot of Sun Belt markets, expenses also went up. However, because of operating leveraging, net operating incomes (NOIs) went up more.
What it does say, according to Adler, is that in markets that became stressed with a big influx of people moving in, the labor and materials markets also became stressed.
SPECIAL ARTICLE NOTE + ACTION:
Since 1977, GCAA has worked tirelessly on behalf of the multi-family industry and remains actively involved in legislative and regulatory processes at the local, state, and national levels to help influence government policies that support the industry. To keep you aware of our efforts on your behalf, GCAA wanted to share that we recently sent a letter to the Mecklenburg Clerk of Court expressing their concerns regarding eviction proceedings delays.
If you're a Member, help us continue these efforts - donate $5.00 to your RHC PAC.