Overall, affordable housing managers were spared sharp increases in operating costs in 2012, according to the 2013 Income/Expense Analysis: Federally Assisted Apartments report released Aug. 27 by the Institute of Real Estate Management (IREM). However, fuel prices began to rise again this summer.
For the affordable properties in the survey, operating costs rose on average by roughly 2 percent or 3 percent. For various property types, the numbers show operating costs rising or falling for idiosyncratic reasons. That’s a big difference from the last two years, when cost increases hit almost all property types. “This year you didn’t have consistency… Each property type is very different,” says Matthew O'Hara, income/expense analysis manager for Chicago-based IREM.
Utility costs may swell again this year. As a strengthening recovery increased demand and tumult in the Middle East increased worries about supply, the price of oil rose above $100 a barrel in July and is once again climbing toward $110.
Selected findings from IREM include:
- For properties subsidized by the Sec. 202, Sec. 236 and Sec. 8 family programs, depending on the building type operating expenses were either up within a range of $0.30 to $2.28 per square foot of rentable area or down (within a range of $0.12 to $1.22 per square foot;
- For Sec. 8 elderly/handicapped housing operating expenses declined within a range of $0.14 to $0.99 per square foot; and
- For all types of Sec. 221(d)3 federally subsidized properties operating expenses in 2012 vs. 2011 were up within a range of $0.47 to $1.26 per square foot.