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THIRD QUARTER 2012 GREEN BUILDING COMES OF AGE Renovating, Innovating and Reinvigorating Boston’s Housing Scene

Bay State Apartment Owner 3Q 2012

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In this issue of Bay State Apartment Owner, two Boston apartment buildings get a green makeover; learn how best to accommodate a tenant who hoards; and connect with the national association.

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Page 1: Bay State Apartment Owner 3Q 2012

THIRD QUARTER 2012

GREEN BUILDING COMES OF AGE

Renovating, Innovating and Reinvigorating Boston’s Housing Scene

Page 2: Bay State Apartment Owner 3Q 2012

PUBLISHER OF BANKER & TRADESMAN

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But these powerful decision-makers will only receive the magazine in 2012. DON’T DELAY. Showcase your business in the Rental Housing Association’s official magazine and reach the owners of larger apartment complexes, and additional owners through the insertion of the magazine into Banker & Tradesman.

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Page 3: Bay State Apartment Owner 3Q 2012

COVER

Green Building Comes of AgeRenovating, Innovating and Reinvigorating Boston’s Housing Scene 08

Bay State Apartment Owner is the official publication of the Rental Housing Association. ©2012 The Warren Group Inc. and the Rental Housing Association. All rights reserved. The Warren Group is a trademark of The Warren Group Inc. No part of this publication may be reproduced in any manner without the express written consent of the publisher.

A division of the Greater Boston Real Estate Board One Center Plaza, Mezzanine Level Boston, MA 02108 Phone: 617-423-8700 Fax: 617-338-2600

RHA Officers President: Karen Fish-Will President Elect: Lynn Bora Vice-President: John Keith Secretary: Gilbert Winn Executive Director: John E. Lafferty

Published By THE WARREN GROUP Creative / Production / Advertising www.thewarrengroup.com 280 Summer Street Boston, MA 02210 Phone: 617-428-5100 Fax: 617-428-5118 [email protected]

CONTENTS

President’s Message 04NAA Conference Spans the Country from Boston to San Diego

Connect with NAA 05Update and Info from the National Association

Executive Director’s Message 06Fall Ahead

Hoarding 10The New Epidemic

Photo Gallery 13RHA Calendar 14

third Quarter 2012

Green BuildinG Comes of AGe

renovating, innovating and reinvigorating Boston’s Housing scene

Third Quarter 2012 • BAY STATE APARTMENT OWNER 3

Page 4: Bay State Apartment Owner 3Q 2012

4 BAY STATE APARTMENT OWNER • Third Quarter 2012

President’s MessageBY KAREN FISH-WILL

NAA Conference Spans the Country from Boston to San DiegoIn June, Boston was the host city

for the 2012 National Apartment Association’s Education Confer-

ence and Exposition. Over 6,000 industry professionals descended

upon the Boston Ex-position and Confer-ence Center for the three-day event, which set new records of at-tendance for any NAA conference.

Attendees heard world class speakers, including Tom Brokaw. They were motivated by a powerful presentation

from Bert Jacobs, entertained by Connie Podesta and informed dur-

ing the 40-plus education sessions offered throughout the conference.

The industry’s top vendors cre-ated the biggest and best trade show in conference history, occu-pying almost 350,000 square feet of first class exposition space. The NAAPAC event marked the opening of the Tea Party Ships and Mu-seum. Ten conference hotels were linked by a shuttle system ensur-ing attendees frequent and conve-nient access to the tradeshow, edu-cation sessions, and other events.

Perhaps one of the most memo-rable events was the opening party, sponsored by the National Suppli-ers Council. Food stations provided a taste of the best of Boston, while

a live band in the concert tent en-tertained the crowd. The evening was capped off by a spectacular fireworks display over Boston Har-bor.

With the presentation of a Paragon Award, NAA recognized RHA for its role as host committee for the conference. RHA member companies supplied over 205 vol-unteers, who provided directions and information at the conference hotels and convention center; served as greeters and helpers dur-ing Maintenance Mania®; and wel-comed guests at the NSC Opening party.

As good as it was in Boston, we are now looking ahead to the 2013 National Apartment Association Education Conference and Expo, which will be held, for the first time ever, in San Diego, Calif. Save the dates of June 20 to June 22 for the 2013 conference.

Before or after the conference, you will want to visit the many at-tractions in and around San Diego, including the Gas Lamp District and the world-renowned San Diego Zoo. During the conference, graffiti artist Erik Walh, one of the confer-ence’s thought leaders, will share his views on innovation and cre-ativity. Over 40 additional educa-tion sessions will fill the conference schedule.

Whether you come for the larg-est trade show in the apartment industry, the comprehensive education sessions, unlimited net working opportunities or the excit-ing keynotes, you will want to be part of the 2013 NAA Education Conference and Expo, June 20 to 22 in San Diego. For more informa-tion, visit the conference website at www.naahq.org. n

Karen Fish Will is 2012 president of the Rental Housing Association and president of Peabody Properties, Inc.

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Page 5: Bay State Apartment Owner 3Q 2012

Third Quarter 2012 • BAY STATE APARTMENT OWNER 5

Updates and Info from the National Association

Connect with NAABY JERRY WILKINSON

The CEL & Associates’ Na-tional Apartment Compensa-tion and Benefits Survey is

the nation’s largest, most widely used, referenced and recognized

compensation resource for the real estate in-dustry.

The 23rd annual survey covers more than 190 positions, stratifying and report-ing data from nearly 400 companies by own-ership type, company size, region and met-ropolitan area. NAA’s

sponsorship of the CEL survey this year increases its exposure to mem-ber organizations across the coun-try, offering more in the multifamily sector an opportunity to compare and examine data on 51 senior ex-ecutive and corporate positions, and 47 residential positions, including: divisional and regional leadership; to key financial, human resources, information technology, legal, ad-ministrative and other corporate support; real estate functional levels for asset management, acquisi-tions, development, construction, marketing and engineering; on-site property management (stratified by number of units); leasing and main-tenance jobs. Typically, the CEL na-tional survey encompasses tens of thousands of incumbents through participation from over 75 percent of public multifamily REITs, and more than 200 companies focusing on multifamily residential product nationwide. The survey is now avail-able.

Cost to non-participants is $1,200. Participants receive it for free. Contact CEL’s Janet Gora at [email protected].

Register Now for the Apartment Revenue Management Conference

As revenue management prac-

tices maturation and adoption rates continue to hit new milestones, multifamily is discovering a wealth of dynamic data and actionable business intelligence. Don’t miss out on what’s next in revenue man-agement and how to capitalize on its benefits.

Join us Oct. 15 to 17 at the Omni Dallas for an insider’s guide to revenue management and yield optimization in the multifamily housing industry. To register and for more information, please visit www.multifamilyrevenue.com.

Remember to Order NAA’s 2012 Survey of Income & Expenses

The complete 2012 NAA Survey of Income & Expenses in Rental Apartment Communities, which details specific data for 78 markets nationwide, is available for order. Cost for members is $599 and $1,000 for non-members. Contact NAA’s Valerie Hairston at [email protected] or (703) 797-0624.

Are You NAA’s First AIMS Member Advocate of the Year?

The Apartment Industry Mobili-zation Service’s award winner will be announced at the NAA Assembly of Delegates meeting in November. The new award honors a volunteer advocate who helps to influence public policy at the national level throughout the year.

To be considered, NAA members must be active advocates, such as by attending the Capitol Conference, participating in Lobby Day, meet-ing with your members of Congress during a constituent work week or the August recess, and taking ac-tion on legislative action alerts. The application criteria and nomination forms are available at www.naahq.org/about/awards/Pages/Mem-berAdvocateoftheYearAward.aspx.

For more information, contact Kathleen Gamble at kathleen@

naahq.org or (703) 797-0633. The application deadline is Sept. 17.

Online Resource Center Showcases Different Resource Each Week

The always-expanding Online Resource Center is a little easier to keep up with now, thanks to the Featured Resource of the Week, posted every Wednesday. Each week, a different resource will be highlighted on a different aspect of the apartment industry. Past featured resources include hiring guides for maintenance and leas-ing staff, survey results on renter attitudes toward green apartment units and a traffic calculator to help determine what your leasing staff’s closing ratio should be based upon foot traffic.

Visit http://community.naahq.org every Wednesday to keep up with the latest information!

Apartment Careers MonthNow is the time to start plan-

ning your participation in NAAEI’s National Apartment Careers Month, February 2013. Your participation can be as limited as a one-time pre-sentation on apartment careers at a local high school, a partnership with a local community college to offer CAMT training for veterans and the unemployed, or collaboration with any college or university graduating hospitality and business manage-ment majors.

Do you want to get involved in college outreach, but don’t know where to start? Contact Maureen Lambe at [email protected] to set up a conference call to discuss opportunities to promote apart-ment careers. For more informa-tion, please go to: www.naahq.org/education/naaei/campaigns/Pages/default.aspx. n

Jerry Wilkinson is chairman of the National Apartment Association.

Page 6: Bay State Apartment Owner 3Q 2012

6 BAY STATE APARTMENT OWNER • Third Quarter 2012

Executive Director’s MessageBY JOHN E. LAFFERTY

While we anticipate the fall ritual of turning the clocks back, this fall we are turn-

ing the calendar ahead at RHA. Much of the planning over the last few weeks had been in anticipation

of upcoming fall and early winter events, as well for next year.

For instance, in a week or so, RHA meets to elect its directors for 2013. The newly-elected directors will then elect the leadership (president, president-elect, vice president and secretary) of the asso-ciation. At our annual

meeting, the membership will also vote on a budget for 2013.

Fall Ahead

Page 7: Bay State Apartment Owner 3Q 2012

Third Quarter 2012 • BAY STATE APARTMENT OWNER 7

The budget process began in the summer of 2012, as RHA staff and committee members started plan-ning and scheduling the 2013 RHA education programs and events. Pre-liminary budgets have been vetted at the committee level and submitted to the leadership for discussion, all in anticipation of the annual meeting vote.

Planning has been underway for the largest single event on RHA’s calendar, the 2012 RHA President’s Awards dinner, which will be held on Tuesday, Dec. 4, at the State Room, 60 State St., in Boston. Entertain-ment for the gala will be provided by the World Premier Band, and the evening promises to be a “must-attend” event.

The 2013 education calendar will offer NAA designation courses, including CAM, NALP, CAMT and CAPS. RHA will be continuing our popular breakfast series, as well as our Massachusetts-specific Fair Housing and Landlord Ten-ant classes. Many NAA designation courses are also offered online, and all can be found at www.;gbreb.com/rha. We have booked the Hynes Con-vention Center for our 2013 Educa-tion Conference, and we are finaliz-ing the dates and venues for our golf, business exchange, Red Sox, Celtics, Affiliate and NextGen outings.

We will continue to offer our on-line career center, and look forward as we roll out our new online market survey. During the fall, we are also taking a look at our affiliate direc-tory, and ways to make the delivery of information timelier and easier.

One thing is for certain, this is not the time to “fall back.” RHA, through its leadership and committees, con-tinues to move forward. Offering new programs and services, strengthen-ing existing ones, and continuing to lead the industry is why RHA contin-ues to grow. n

John Lafferty is the executive director of the Rental Housing Association.

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8 BAY STATE APARTMENT OWNER • Third Quarter 2012

GREEN BUILDING COMES OF AGE

Renovating, Innovating and Reinvigorating Boston’s Housing Scene

BY SCOTT VAN VOORHIS

Page 9: Bay State Apartment Owner 3Q 2012

Third Quarter 2012 • BAY STATE APARTMENT OWNER 9

Boston apartment developers are on the cutting edge as they go green with pioneer-

ing initiatives that are leading the country.

Boston-based Winn Develop-ment, one of the nation’s largest affordable housing developers, is pushing the envelope when it comes to energy retrofits, from construction to financing.

Winn recently finished work on a deep energy retrofit of the big Castle Square housing complex in the South End, cutting energy costs by a dramatic 70 percent. The project, which also included other, more general renovations, such as new bathrooms and kitch-ens, topped $50 million.

Encouraged by the success of the project, Winn is also explor-ing the launch of a new fund to help expand the financing options available to developers looking to take on ever more ambitious en-ergy retrofits.

Of course, Winn is hardly alone when it comes to interest in green construction and making build-ings, especially energy gobblers like big apartment complexes, more efficient.

Apartment builder Mount Ver-non Co. is rolling out a sweeping array of energy saving measures and incentives in the new Allston Green District it is building in the student-packed neighborhood.

But Castle Square has taken energy conservation to a new level, representing the largest deep en-ergy retrofit yet attempted in the country, according to Winn execu-tives.

“This is the largest, deep en-ergy retrofit in the country,” noted Darien Crimmin, vice president of energy and sustainability at Winn, of Castle Square. “You have to go to Canada or Europe to find any-thing similar.”

Deep savingsWinn kicked off work in the fall

of 2010 and wrapped up the big Castle Square energy revamp ear-lier this summer, Crimmin said. The project combined the energy efficiency retrofit with a general overhaul of the 500-unit complex,

Continued on page 12

GREEN BUILDING COMES OF AGE

Renovating, Innovating and Reinvigorating Boston’s Housing Scene

BY SCOTT VAN VOORHIS

Page 10: Bay State Apartment Owner 3Q 2012

10 BAY STATE APARTMENT OWNER • Third Quarter 2012

It’s time for the annual apart-ment inspection, so you open the door and go in. Only then

do you realize you have just en-tered the twilight zone.

You look around and can’t be-lieve what you see. To the right, floor-to-ceiling stacks of papers, magazines and books. To the left, enormous piles upon piles of clothes and bags. You step fur-ther into the living room and can now see the door to one of the bedrooms, but realize the room is completely inaccessible because of the mountains of stuff. You peek

into the bathroom – the tub is full of clothes and papers. The kitchen stove is covered with open food, magazines and boxes. There is evidence of roaches and mice all around. The apartment is a disas-ter.

The resident is a hoarder.Recently, there has been an

increased focus on hoarding, with some experts saying it is becom-ing an epidemic. This could be because of the larger senior popu-lation, since hoarders are primarily older adults. It has been estimated that 2 to 5 percent of the total population has a hoarding problem of some severity.

Hoarding is beginning to be viewed as a separate disorder, although it can also be a symptom of other disorders, like de-pression. Hoarders are often in denial; many refuse to believe that there is a problem.

Because hoarders may have a disability, be

aware of fair housing is-sues. In dealing with

a hoarder, you as the landlord may have to make

a reasonable accom-modation. Remember

that a resident doesn’t have to specifically ask for an accommodation to be entitled to one. Try to avoid having a fair housing complaint filed against you by acting reasonably and engaging in an interac-tive process with the resident. One possible accommodation might be to give the resident time to improve the situ-ation instead of evicting

him right away. Another

accommodation could be to assist the resident in getting trash to the dumpster if the resident can’t do it himself.

Act ImmediatelyThere can be serious fire, safety

and insect issues in hoarding cases. A stove covered by papers is a real danger. Obstructed ingress and egress to the apartment and various rooms makes it difficult for occupants to get out in an emer-gency and for emergency or medi-cal personnel to get into the unit.

A hoarder’s apartment is usu-ally a harborage for roaches, bedbugs or mice, and sometimes all three. Often the hoarder won’t allow exterminators into the apart-ment at all. Even if the extermina-tor is granted access, the treat-ment will be ineffective because of all the clutter and the unit not being properly prepared for the ex-termination, so the bug or rodent problem persists.

Managers learn of hoarding problems in various ways: during inspections, after neighbors com-plain of an odor wafting from the unit or insects and mice in their own units, or when emergency per-sonnel or managed care workers complain that they can’t access the apartment.

As soon as you learn of a hoard-ing problem, deal with it. It can be difficult to confront this issue, but you need to be proactive. The prob-lem will not go away on its own; it will just become more severe. Try to work with the resident to resolve the issue. Don’t be confrontational or tell the resident that all of the stuff in the unit is junk. Contact family members, social workers involved with the resident, or elder services to help you deal with the resident.

If possible, work with the resi-dent to develop a plan to resolve the issue over time. The plan should have a number of poten-tially achievable steps that the resident will take. Identify the most serious issues to concentrate on first. Confirm the plan by a written agreement signed by the resident, or write a letter to the resident confirming the plan. Then closely monitor the resident’s compliance with the plan.

HOARDINGThe New EpidemicBY KENNETH A. KREMS

Page 11: Bay State Apartment Owner 3Q 2012

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When dealing with hoarders, it is extremely important that you docu-ment everything. Take numerous photos, document each observation of the unit and each conversation with the resident, his family, social workers and caregivers.

Legal ActionYou will often have to send, or

have your attorney send, one or more warning letters. If the condi-tion of the apartment is simply de-plorable, if the resident refuses to cooperate, or if the resident doesn’t make any progress toward improv-ing the situation, you will have to serve the resident with a notice to quit and proceed with an eviction. However, even during the eviction process, you can work with the resi-dent to resolve the problem. Some-times the resident and family mem-bers won’t acknowledge the severity of the problem until they realize that the resident might get evicted.

Some hoarding cases are re-solved by an agreement for judg-ment, in which the resident agrees to take specific steps to resolve the problem. If the resident breaches the agreement, you can ask the court for the execution for posses-sion of the unit.

The eviction process may take months, so if there is an extremely serious safety or insect problem, you can seek immediate relief while the eviction is proceeding by going to court for a preliminary injunc-tion. In this type of action, you would ask for an immediate order that the resident resolve the most pressing issues and cooperate with the exterminator.

Hoarders present a significant challenge for landlords. They can negatively impact other residents, and it is difficult for many of them to acknowledge the problem and then take effective action to resolve it. Hoarding is not, however, an insurmountable problem. By being proactive, landlords can minimize the impact on the building and move as quickly as possible towards a solution. n

Kenneth A. Krems is a partner in the Boston law firm of Shaevel & Krems, LLP, where he focuses on residential and commercial real estate management and other real estate issues.

Third Quarter 2012 • BAY STATE APARTMENT OWNER 11

Page 12: Bay State Apartment Owner 3Q 2012

12 BAY STATE APARTMENT OWNER • Third Quarter 2012

with new bathrooms and kitchens. tWhile the entire apartment com-plex got an energy overhaul, the centerpiece was the deep energy retrofit applied to the 192- unit mid-rise on Tremont Street, he said.

Standard energy efficiency proj-ects cut costs by maybe 25 to 30 percent, but the deep energy retro-fit can more than double that per-formance, according to Crimmin.

Instead of pumping insula-tion into the existing structure, the deep energy retrofit at Castle Square involved wrapping the seven-story midrise in a new, heavily insulated skin that would keep in hot air during the winter and cool air during the summer.

The new skin involved three layers. The first, applied to the brick façade, was an air and water control membrane, followed by a mineral fiber air-low suppres-sion layer, topped by insulated metal cladding, according to a brochure on the project. The super insulated shell also had an ascetic payback as well, providing a catchy new façade to what had been a dated and worn exterior. Space for a community center and retail shops was also added.

Wrapping the mid-rise with the super-insulated shell was a first for Winn and it went off without a hitch, Crimmin said.

“From our perspective, it was definitely a smooth process,” he said. “Working with the tenants and general contractor, there were no major hiccups,” Crimmin said, quipping, “it took longer to choose a color.”

The shell is not the only new energy efficient feature. There is also a super insulated reflective roof and “high efficiency windows and extensive air sealing,” notes a Winn write-up on the project, increasing “the insulation value of the building by a factor of ten.”

In addition, high-efficiency cooling and heating equipment was installed, along with solar panels on the roof, Energy Star appliances and CFL and LED lighting.

Winn also upgraded the other 300 units, though wrapping the

other, low-rise garden style units in a super insulated shell did not prove feasible, Crimmin said.

More energy efficient windows and work to make individual apartments more airtight helped to slash energy costs by roughly 50 percent in the other buildings as well, according to Winn’s write-up on the project.

Paying for it allTo help pay for Castle Square’s

major energy makeover, Winn tapped into roughly $12 million in state and federal grants and utility industry rebates, said Chris Flem-ing, a Winn executive who worked on the financing.

Winn received $6.7 million from the U.S. Department of Housing and Urban Development Green Retrofit program, and an addi-tional $4.4 million from the Mas-sachusetts Department of Energy Resources High Performance Grant Program. Winn was also able to collect over $1 million in rebates from NStar and National Grid through the utilities’ energy conservation programs.

The project’s size and scope was an ally, with state and federal officials eager for a high-profile success story, Fleming said.

But in a downside for develop-ers looking to follow in Winn’s footsteps, much of the federal and state money was tied into the American Recovery and Reinvest-ment Act and has been doled out already.

Still, while federal and state, recession-era stimulus money has dried up, other government agen-cies, including the U.S. Depart-ment of Energy, are still funding projects, Crimmin said.

Winn is also exploring plans for a fund that would provide financ-ing for retrofit projects, both its own and that of other developers. The fund would lend money in the form of a mortgage, with the sav-ings created by the retrofit then used to pay off the cost of the project. While the details are still being hammered out, Winn plans to announce additional details in the coming months.

“We have a lot of demand for it in our own portfolio – we would love to do more,” Crimmin said.

Green ambitions in AllstonWinn has provided a road map

for developers looking to go deep with energy conservation.

By contrast, developer Bruce Per-celay of Mount Venon, who is build-ing the Allston Green District, is providing an example of the benefits of a broader approach.

Percelay is in the process of building a series of cutting-edge green apartment buildings and ret-rofitting older buildings as well, tak-ing advantage of available tax cred-its and energy rebates.

Tenants in his newest building, The Element, sign a green lease in which they split the savings with Mount Vernon if they keep drive en-ergy costs below certain agreed upon goals.

Renters also sign a “green ten-ant declaration,” pledging to reduce energy and water use, increase re-cycling, use bicycles and ride public transit, according to a press release sent out earlier this summer by Mount Vernon.

But Percelay is doing more than just talking the talk – he is also walking the walk. Mount Vernon has installed separate HVAC and water meters for each unit, with the idea that tenants won’t be so casual about long showers if they can see the cost.

Tenants are also given special water containers that they can fill up with filtered water – an attempt to cut down on use of plastic water bottles.

“It gives you pure water so you are not throwing way five bottles of Poland Spring a day,” he said.

The new building also features floor-to-ceiling, super-insulated win-dows designed to make the best use of natural light, and a Hubway bike rental station and on-site Zipcars to help tenants go carless.

And it’s not just good for the en-vironment, but good for business as well, with Mount Vernon’s new Ele-ment building completely leasing out before it opened in July.

“Our tenants have indicated to us the environmental aspects of the building make them feel good,” Percelay said. “They want to be in a building where they feel they are contributing, or more accurately, not contributing, to a carbon foot-print the size of Bigfoot.” n

Continued from page 9

Page 13: Bay State Apartment Owner 3Q 2012

Third Quarter 2012 • BAY STATE APARTMENT OWNER 13

Photo GalleryRHA/NAA Clambake, June 27, 2012

RHA Affiliate Event, August 4, 2012

Page 14: Bay State Apartment Owner 3Q 2012

November 8 – 10National Apartment Association Assembly of DelegatesIndianapolis, Indiana

November (date to be announced)NextGen GatheringLocation to be announced

November 14Breakfast ProgramARS Restoration Specialists, Newton

December 4RHA President’s Awards DinnerThe State Room, Boston

For additional information visit www.gbreb.com/rha.

14 BAY STATE APARTMENT OWNER • Third Quarter 2012

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Page 15: Bay State Apartment Owner 3Q 2012

JOBS ARE WAITING ON EVERY FLOOR.

but because they want to. In fact, 86 percent of household growth over the next three decades will be those without children – young professionals and empty nesters, the people most likely to choose apartment living.

With your help, the apartment industry stands ready to meet the demand of people in your community who want apartments – and the people who want the local jobs from building them. It’s time to rethink our public policy. It’s time to support apartments, and the jobs they generate, in our communities.

300,000. That’s the enormous number of new jobs the apart-ment industry will create this year. Jobs in construction, operations, leasing, management and skilled trades make this the welcome good news that directly impacts your community.

After all, every 100 apartments built mean, on average, 116 new full-time jobs. $5.5 million in wages. And $3.3 million in combined federal, state and local tax revenue and fees.

Bring this success home. Up to half of all new households this decade will be renters – not necessarily because they have to,

www.naahq.org

www.nmhc.org

APARTMENTS CREATE JOBS THAT LIVE HERE.

Page 16: Bay State Apartment Owner 3Q 2012

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