Ever find yourself thinking “AI is great, but it’s really only made for Class A communities?” Or what about “we just don’t have the budget for AI at our naturally occurring affordable housing communities?” If you’ve ever caught yourself saying either of these things, you’re not alone. There’s a lot of misconceptions about AI for non-premium housing assets, but the data will surprise you.
Today, over 55% of the millions of units of rental housing across the country using EliseAI products are located in either Class C or D communities. While many operators assume that AI is only a fit at their highest quality assets there’s a ton of compelling reasons to deploy them at older communities as well, and particularly those communities that fall into the category of “naturally occurring affordable housing” (NOAH). Let’s dive into six of the most compelling reasons to deploy AI at your naturally occurring affordable housing assets, as supported by real examples of operators achieving positive results with AI at Class C and Class D communities.
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AI Lets You Keep the Human Touch with a Lean Staffing Model
Many natural occurring affordable housing communities run on a lean staffing model, beyond the 1 to 100 ratio you might expect to find at market-rate communities, as a result of tight NOI that comes with lower rates. This ratio generally supports the limited amenity offerings of NOAH housing, as opposed to the concierge-level services and amenities you usually find at Class A and B assets. One traditional downside of this lower staff-to-resident ratio? Difficulty providing the high-touch, in-person service that non-tech-savvy residents come to expect at naturally occurring affordable housing communities.
AI flips this dynamic on its head, and allows NOAH operators to provide the same level of attentive, round the clock service without necessitating higher staffing ratios. With AI responding to messages 24 hours a day, operators of NOAH housing can have confidence in their leaner staffing model to still support the needs of their residents, as Juniper Investment Group found when they moved from 2 to 1 FTEs at a 175 unit Class C community with a little support from AI. With AI it’s possible to effectively deploy a lean staffing model without sacrificing quality of support, allowing your onsite team to amplify the “human touch” in their in-person interactions while automating the transactional communications they would otherwise have to handle.
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AI Makes Managing High Inquiry Volume Easy
Fairly priced, well maintained naturally occurring affordable housing is almost always in high demand as a result of high housing prices across the nation, particularly in hot real estate markets like Miami, New York, Los Angeles, and Boston. What does high demand mean? A massive amount of inquiries from prospects, regardless of availability. For lean teams at NOAH communities, this means they either have to spend hours each day responding to leads or risk ignoring a large number of potentially qualified applicants.
Deploying AI to automate all inbound and outbound communications to both residents and prospects alike means property management teams at naturally occurring affordable housing communities no longer have to pick between responding to inquiries and providing high-quality service to residents. AI can automate the tedious, repetitive process of transactional communications and give onsite teams time back to deliver differentiated service for residents, regardless of community asset class. And nowhere is managing high lead volume more crucial than at NOAH communities that see large amounts of interest for few units (except for affordable housing that receives even higher lead volume).
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AI Maintenance Solutions Can Help Older Communities
One common characteristic of naturally occurring affordable housing is its age, with most Class C assets falling somewhere between 25-35 years old and much of Class D housing pushing 40 years or older. The unfortunate reality of the age of these buildings is that many of these communities have higher rates of maintenance issues than at newer, Class A and B assets. That means your onsite teams are going to be responsible for managing more maintenance requests and work orders for NOAH communities, which could be an issue if staffing ratios are low. Having a centralized maintenance team could help operators manage a high volume of maintenance issues, but without the right technology to ensure all work orders are being opened in a standardized manner, prioritization and operational efficiency could take a hit.
Deploying conversational AI to automate the creation of work orders can help maintenance teams at naturally occurring affordable housing communities effectively triage and solve a high volume of maintenance issues. EliseAI’s Maintenance product uses natural language processing to categorize and create standardized work orders, making it easier for maintenance technicians to efficiently and effectively do their jobs. Now, instead of two different residents categorizing the same issue differently, resulting in duplicated work or extra visits, each work order will be created in a uniform manner. This is even more crucial for naturally occurring affordable housing communities, as getting data-driven insights into recurring maintenance issues can help operators identify opportunities for preventative fixes or capital improvements, like replacing 20-year old refrigerators in all your units after noticing 25% of them broke down.
EliseAI’s Maintenance product can go even further and actually help residents troubleshoot their own issues, reducing maintenance technician deployments and potentially limiting costly after-hours emergency maintenance costs.
AI Keeps Collection Rates High
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Keeping delinquency rates down is just as important for naturally occurring affordable housing as it is for Class A and B assets, but in a lean staffing environment staying on top of late payments is easier said than done. Plus, no property manager gets into the property management space with the intention of running down delinquent renters, and many cited managing delinquency conversations as one of the toughest parts of their jobs. But every day counts when it comes to delinquency mitigation, as delayed demand notice generation can extend the eviction timeline for non-paying residents, so ensuring you stay on top of payments without overtaxing your onsite team is a balancing act. AI can bridge the gap, helping naturally occurring affordable housing operators better enforce their delinquency management strategies.
If you’re looking to see the concrete impact of AI for delinquency across a variety of asset classes, Flatz Living reduced their delinquency rates by 230 bps (resulting in ~$260,000 in annualized bad debt reduction) by deploying EliseAI’s delinquency product across their 1,000+ portfolio of both naturally occurring affordable housing and higher class assets. This case study is a fantastic example of an operator of non-Class A assets using AI to reduce the amount of outstanding bad debt at their communities, improving NOI and free cash flow.
AI Can Be a Competitive Differentiator
There’s a few key factors that differentiate one community from another, and some are harder to change than others. Things like location and unit quality are difficult if not impossible to change, and while cutting prices to below-market rates can help attract residents it’s not a particularly feasible long-term approach. Operators of naturally occurring affordable housing need to lean into as many differentiators as they can to help keep occupancy high, and responding to prospects faster than competitors is a great way to stay top of mind and keep NOI high. The secret to fast replies to prospect and resident needs around the clock? Deploying AI.
If you don’t use AI at your naturally occurring affordable housing assets you risk losing market share to competitors in the area who do. As Sean McArdle, Director of Revenue Management at The Ardizzone Group told us, “if you don’t want to be the first to adopt AI that’s fine, but I certainly wouldn’t want to be last.” Think about it—a prospect who messages 8 different communities looking for a tour after-hours is significantly more likely to end up renting at the community that replied to them within 30 minutes, as opposed to the one that takes 48 hours to schedule a tour. If you’re not responding to that warm prospect quickly, they’ll likely end up at a similar community in the area that did get back to them promptly. Nowhere is competitive differentiation more important than for tight-margined naturally occurring affordable housing.
AI Can Help You Retain Top Talent
Community managers are the lifeblood of naturally occurring affordable housing, providing the personalized service that keeps residents happy. For many operators it’s becoming even harder and harder to retain those superstar employees, with the sky high turnover rates plaguing the multifamily industry. Key factors that have driven resignation rates over 30% include difficulty switching off after work, inability to maintain proper staffing levels, and heavy workloads for onsite teams—all factors that can be directly impacted by rolling out AI. Having AI as a primary point of contact for resident and prospect inquiries means your onsite teams can now switch off after leaving work, trusting that the AI is there to provide 24/7 support for both routine inquiries and emergency scenarios.
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For naturally occurring affordable housing operators, keeping top talent results in improved business continuity and higher renewal rates. Knowing that it’s harder to find new employees than keeping existing ones, deploying AI to automate the least satisfying parts of onsite teams’ day to day work (like reaching out to collect rent, or following up to confirm an upcoming tour) can help you save on training and hiring costs. While the price tag for premium AI solutions can seem steep for budget-conscious naturally occurring affordable housing operators, the cost savings it can deliver through employee retention, tech stack consolidation, and more frequently outweigh the software costs and allow operators to realize ROI on tech spend, like Flatz Living did.
Getting Started with AI at Your Naturally Occurring Affordable Housing Communities
On paper, it might seem like there’s a disconnect between the realities of naturally occurring affordable housing and AI, but the hundreds of EliseAI customers using AI products at their NOAH assets have proven otherwise. Whether it’s improving employee experiences, boosting collection and renewal rates, or differentiating their units from other naturally occurring affordable housing communities in the area, deploying AI has helped operators like Flatz Living and Juniper Investment Group unlock significant operational savings and improve NOI for their NOAH assets. At the end of the day, being a housing provider is about providing people homes that make them feel welcome, supported, and safe, so no matter your communities’ asset classes your residents will come to appreciate the helpful and responsive nature of AI.