Goodbye White Picket Fence: The Shifting Renter Profile

by | Mar 9, 2017 | News

Marquette University’s Chair in Real Estate, Dr. Mark Eppli, once posed to WHR Group a hypothesis that—based on the strong emphasis on sustainability and the powerful fear created in the millennial generation while watching their parents struggle through the most recent financial crisis—the American Dream of owning a home in the suburbs is changing.

Rising Stats on Rent

The reality today is that the number of renters has significantly increased in major metros across the country, and research shows an increase in renting at almost all age groups. As Dr. Eppli alluded, some of this shift can be traced back to millennials who are cautious about putting down roots and are already strapped with debt from student loans.

But it’s not just millennials. According to a recent Harvard study, America’s Rental Housing: Expanding options for diverse and growing demand, Baby Boomers have also been inflating the demand for rental housing: either through the real estate crash that forced them to build back their credit score, or for those looking to downsize into retirement. “While households in their 20s make up the single largest share [of renters], households aged 40 and over now account for a majority of all renters.” (Harvard study)

“The decade-long surge in rental demand is unprecedented. In mid-2015, 43 million families and individuals lived in rental housing, up nearly 9 million from 2005 — the largest gain in any 10-year period on record.”

-America’s Rental Housing Study, 2015

Today’s Renter Profile

As the trend to rent has continued upward, it has put substantial pressure on the rental market and costs. The National Association of Realtors found that, while rent has risen 15 percent over a five-year period, renters’ income grew only by 11 percent. The accelerating prices require more of a worker’s salary than in the past for the same rental units. This gap also makes it nearly impossible for renters to save for a down payment to transition into a homeowner.

Interestingly, one factor that does not seem to impact homeownership is having children. Harvard’s America’s Rental Housing study shows families with children are renting just as much as individuals.

Managing the Rental Demand in Relocation

Researchers are hoping relief for high rental demand can come from supply of new construction of both multi-unit rental properties as well as single-family rental homes. The response thus far has been slow, as many builders were put out of business during the market slowdown. Luckily, more research from the National Association of Realtors found that builder confidence is up.

The best ways for employers to support their employees in this growing renter population is to realize that their profile is changing. Many will need more than a U-Haul to move their items during a relocation. Since some employees will be renting single-family homes, the lease cancellation fees can be higher, and the need for rental assistance in specific school districts is becoming more common. Employers would be wise to review the renter support they currently offer to ensure it matches the needs of the people and families they are moving.

For additional information on the changing rental market, check out the full Harvard study here: America’s Rental Housing: Expanding options for diverse and growing demand.

The Changing Talent Landscape

by | Feb 9, 2017 | News

The “American dream” is known to include a home in the suburbs, but due to nationwide housing shortages and crippling student debt, people simply aren’t able to settle in the suburbs. (And they aren’t working there either.)
In fact, of the over 300,000 jobs created in Illinois in the past six years, nearly 90% of them were added in the Chicago metro area.

This flush of downtown talent isn’t exclusive to Chicago. Big cities across the nation are seeing a revival thanks to the large percentage of younger generations living in downtown areas.

Data reveals that more young people are living in the biggest U.S. cities than anytime since the 1970s.This makes it difficult for employers to fill open positions at their suburban headquarters as Baby Boomers are retiring.

It’s for this reason that companies are uprooting their quiet offices for higher rent but more plentiful talent in downtown office space.

Of course, not every company can afford to relocate its headquarters in order to have more local access to a larger talent pool. So, what can you do to remain a viable employer option for candidates that favor big-city living?

For those relocating to your office, add a sign-on bonus to your benefit offering. Already offer this benefit? Consider benchmarking your existing relocation policy to find other benefits to help attract talent to your area.

You also need to offer office perks that highlight a desirable workplace culture.

Younger generations value work-life balance more so than prior generations. They seek perks such as on-site cafeterias, on-site health classes or complimentary gym memberships, and flexible work schedules that allow them to work based on their energy levels versus strict start and end times.

Additional perks like mileage reimbursement can also help convince candidates that your suburban positions are worth the daily trek from the city. In fact, Wisconsin-based company Trek (located in a small suburb outside of Madison) offers an incentive to employees who bike to work.

Remote work flexibility is another value-add that many young job candidates seek. Offering even just one day per week for your employees to work remotely can help ease the idea of a commute for city-dwellers. Plus, remote work opportunities have been shown to increase employee engagement, happiness, and productivity levels.

With the bulk of today’s younger job candidates unable to save for a home in the suburbs, you need to be creative in attracting from this talent pool, especially if you’re competing with existing downtown employers.

Top 5 Destination Services for Homeowners

by | Dec 8, 2016 | News

When relocating an existing homeowner, there are many things to keep in mind (such as selling their home, finding a new home, moving a home’s worth of goods, and usually supporting a whole family versus one relocating employee). Here are five important benefits you should provide your relocating homeowners to make sure they settle into their new destination without any hiccups.
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1. Home Purchase Assistance

One of the first things a relocating employee asks themselves is, Where will I live? This is where Home Purchase Assistance comes in. Home Purchase Assistance should include in-depth counseling—addressing relocating employees’ needs and concerns in their new location. There are specialists at relocation management companies trained to act as an objective advocate for the transferring family throughout a home search process, reviewing the real estate agent responsibilities with respect to buying a property in the destination location. This should also include reviewing different real estate “agency” representations; employee housing requirements and time limitations, including transfer date, projected move date, preferred area, community amenities, price range, size, and style of desired property; availability; commuting logistics; and any unique requirements the transferring family may have. At WHR Group, we employ Relocation Counselors who are licensed real estate salespeople, meaning true market knowledge throughout the home purchase process.

2. Rental Assistance

We understand that owning a home isn’t for everyone, especially if this relocation is not long-term for the existing homeowner. Homeowners should also receive the option to rent in their new location, and this Rental Assistance should be personalized to the relocating employee’s unique needs. Make sure your relocation company offers renters the following helpful services:
  • Area Tours: When a local/on-the-ground agent provides a “show off” or area tour to the prospective renter. This allows the renter to see various neighborhoods that could work for them; the best areas for entertainment, shopping, and dining; plus access points to public transport.
  • Guided Tours: Following a thorough needs assessment, a local agent is assigned to locate properties that best fit the renter’s needs, until the perfect place is found. Additional support for lease negotiation and financing hurdles is provided.
  • Self-Guided Tours: The renter receives online, detailed access to available rental units following a thorough needs assessment.
  • Other: Guidance for obtaining a new driver’s license and finding local grocery stores and banking institutions for opening new accounts.

3. Network Support

At WHR Group, we manage a network of over 40,000 real estate agents. All agents are interviewed and must meet certain quality criteria before inclusion in our network. Based on the relocating employee’s particular requirements, their Relocation Counselor will select a real estate agent (or agents, depending on the complexity of the market area) in the destination location to assist the employee in finding suitable housing. The Relocation Counselor furnishes the selected agent with a complete profile of the employee’s personal housing needs and community preferences. The agent will then provide an introductory packet of information about the destination area, oftentimes containing data regarding representative communities and home price ranges, community profiles, maps, state and local income tax facts, school district data, available medical services, public transportation schedules, driver’s license and registration information, moving tips, local sites and attractions, dining and entertainment guides, recreation guides, and other pertinent information on the new location.

4. Temporary Living

Corporate relocation isn’t always long-term, which is why we maintain a network of corporate or temporary housing providers and hotel chains. Offering this service allows short-term transferees to feel at home anywhere, no matter for how long. Your relocation provider should work with temporary housing providers that, at a minimum, conduct unit inspections 24 hours prior to employee arrival, supply an inspection sheet for every unit with recent photos, and provide a phone number for 24/7 emergency assistance.

5. Area Tours

Area tours are usually conducted by the selected real estate agent but coordinated by the Relocation Counselor. Based on individual lifestyle information and housing preference criteria, the destination area agent will provide the following for the relocating employee:
  • Review desirable and affordable communities and screen the available homes within a commuting radius to the new location. The Relocation Counselor will arrange for the destination agent to contact the employee and familiarize them with more detailed information about the local area.
  • The destination agent will prepare a complete home-hunting itinerary and schedule of available properties for the employee so that the transferring family is able to get acquainted with the area and see available homes on a timetable that meets their needs.
  • When a suitable home is located, the Relocation Counselor ensures that the destination agent assists the employee in preparing the proper contracts and negotiates the home purchase according to applicable laws and regulations regarding relocation home sales.
  • To enable a more informed decision by the employee, before making an offer to purchase a property, the Relocation Counselor will arrange for the destination agent to provide the employee with historical data on comparable home sale prices for the area within the previous three years.

NJRC’s 35th Anniversary Celebration

by | Nov 15, 2016 | News

relocation management
The New Jersey Relocation Council (NJRC) held its 2016 Fall Conference on Tuesday, November 15, at Fiddler’s Elbow Country Club.

WHR Group’s Director of Business Development for the Northeast Region, Kim DePinto, attended: “What a terrific conference in celebration of our thirty-fifth anniversary. We enjoyed record attendance for the sessions (132 global mobility professionals and suppliers) as well as record attendance for our corporate roundtable (35 corporate members), which was attended by Peggy Smith.”

Peggy Smith, President and CEO of Worldwide ERC®, was the keynote speaker. Peggy’s talk centered on Global Hiring Expectations, the hardest skills to find represented in today’s jobseekers, and why it’s so difficult to fill jobs with the right talent. The session also touched on new ways to find talent through apps like Roadie and TaskRabbit, and how apps like these can help fill the Generation Z need to be an entrepreneur.

Scott Michael, President and CEO of the American Moving and Storage Association, discussed new electronic monitoring for household goods drivers as well as the impact of finding unskilled laborers to train as packers in the moving industry. It will be a wait-and-see game as to how the electronic monitoring will impact delivery spreads and costs.

Relocation Home Sale Benefits

by | Oct 13, 2016 | News

There are benefits to a real estate sale during a relocation. The process begins with the sale of the home. When it comes to selling a home as part of an employee relocation, corporate buyouts come in two main varieties:

  1. An appraisal
  2. An outside offer

There are other types of relocation-specific home sales, such as direct reimbursement of expenses, but these open the employee up to unnecessary taxation.

relocation benefits

More on Buyouts

A guaranteed buyout (GBO) is based on the value of two appraisals, which average a guaranteed offer to buy a relocating employee’s home. A second type of buyout, a buyer value option (BVO), offers a buyout based on an outside buyer’s offer.

In both cases, the employer would take over the financial responsibility and (sometimes) title until closing with a buyer. This allows the employee to move on to his or her new location with less of a burden and to escape taxation. This happens because the money relating to the home sale never actually passes through the employee’s hands. A real estate relocation specialist can help understand these types of offers.

Additional Home Sale Bonuses

In addition to a buyout, employers often offer add-on benefits, such as loss on sale (LOS) protection or a sale bonus. Both LOS and a sale bonus can be engineered to incentivize a home sale. The former by reducing any negative impact of a sale and the latter by “sweetening” the deal if the sale happens in a timely manner.

These benefits are not tax protected. Employees may incur a tax on these benefits if the employer does not elect to “gross up” the incentive.

Home Sale Bonus Trends

A consideration for both additional home sale benefits is the employee’s status within the company. It is not uncommon for these relocation house sale benefits to only be offered to existing employees and those in higher tiers. New hires may fall into a different policy tier altogether.

Based on our benchmarking data, the average percentage of offering relocation home sale benefits is 67.5%. A breakdown of these benefit offerings by industry is detailed below.

  • Homesale Benefit – Manufacturing Industry 33% 33%
  • Homesale Benefit – Pharmaceutical Industry 91% 91%
  • Homesale Benefit – Restaurant & Quick-Service Chains 50% 50%
  • Homesale Benefit – Insurance Industry 100% 100%
  • Homesale Benefit – Food & Beverage Manufacturing 56% 56%

Sale Bonus

In general, employers are more prone to offer a sale bonus when a GBO is involved, since there is more risk of the home not selling. This bonus is often based on the sale price (1 – 5% being the most common), but some companies will offer a flat rate instead of a percentage.

Since some employers also require a mandatory listing period before accepting a GBO, it is common to see the bonus amount decrease over this time, starting at its highest amount before the appraisals are ordered or concluded (e.g. a 4% sale bonus before appraisals, 3% within 30 days of appraisals, 2% within 60 days, and 1% within 90 days).

It is common to see the bonus expire when the buyout expires.

Loss on Sale Protection

Homes bought during the peak of the housing bubble suffered losses in many markets over the past decade. But with the housing market strengthening and stabilizing, there are fewer losses today. To counteract any possible losses during a relocation home sale, the LOS benefit comes in many shapes and sizes.

Traditionally, loss is calculated based on the amount paid for the home and does not include capital improvements. Once the loss is determined (sale price minus purchase price), employers have two choices:

  1. Cover all of it (often up to a capped amount)
  2. Cover a portion of it.

As a further breakdown, some companies offer to cover 50 – 75% of the loss, and the employee must cover the remainder. Often, we see employees pay 100% of the loss but only up to a capped amount (e.g. anywhere from $20,000 – 50,000). If the loss is greater than this cap, the employee can either pay the difference and continue to market and sell the home, or decide against selling the home entirely. Our research has shown caps up to $150,000, but amounts this high are uncommon.

On average, 49.5% of companies offer LOS benefits. A breakdown by industry is detailed below.

  • LOS Benefit – Manufacturing Industry 17.5% 17.5%
  • LOS Benefit – Pharmaceutical Industry 91% 91%
  • LOS Benefit – Restaurant & Quick-Service Chains 12.5% 12.5%
  • LOS Benefit – Insurance Industry 62% 62%
  • LOS Benefit – Food & Beverage Manufacturing 56% 56%

WHR Group can help with LOS benefits and a home sale bonus. We can help structure per tier to meet your organization’s unique needs. Insulating the business from unnecessary risk is important. Real estate and home relocation services can be tricky to navigate. Our 20 years of relocation service expertise will guide you to the right policy for your organization.

Global Workforce Symposium 2016 Takeaways

by | Oct 10, 2016 | News

relocation

As the world around us continues to feel more accessible every day, employers are forced to reassess the way they manage their global mobility strategies. Compliance demands, immigration changes, and pricing tariffs are all examples of trending topics global mobility professionals deal with on a daily basis. The Worldwide ERC®’s annual Global Workforce Symposium is a fantastic opportunity to learn from some of the most talented, world class experts in our field.

WHR Group sent its own top experts to the symposium once again this year. Some of them were able to share their thoughts, takeaways, and experiences.

Roger Thrun: CEO

I took away these main items this year:

• International short-term assignments from 6 months to 2 years are rising quickly

• Ireland is no longer the “it” country in Europe… Germany is the “new one” because of its employment base to choose from.

• If you cannot offer technology to complete a relocation on a handheld device in the next 5 years, you’re out as a viable relocation provider

• Companies want to be able to measure ROI, spend, and future costs on a dashboard at any time

• Technology is great, but customer service is still the backbone of the relocation… We move people with family, not machinery.

David Bronder: Vice President of Business Development

WHR Group is a member of ERC®’s Government Affairs Committee, which focuses on regulatory issues that impact the global mobility industry. Along with other industry representatives, I met with Senate and Congressional staff members to review three areas of concern for our industry: 1. Federal relocation (cost savings through industry best practices), 2. Tax (moving expense deduction), and 3. Immigration (the need for high-skilled immigration into the US). The Government Affairs Committee divided into three groups based on industry experience. All meetings were bi-partisan with the focus on educating staff members on our industry, the impact of tax and immigration regulations, and government relocation best practices.

WHR Group will continue to work with the ERC® Government Affairs Committee to ensure these important issues receive the support for the challenges they represent in our industry. A Senate staff member in the government relocation meeting stated, “The meeting was very beneficial, and bi-partisan support should not be an issue.”

Paul De Boer: President

The keynote speaker, Mick Ebeling, demonstrated a conviction of purpose that guides his life, and we can all take lessons from his experience. His life is “rich” in helping others as he drives Not Impossible Labs to help people overcome obstacles previously thought of as impossible. His motto is “If not now, then when?” Meaning you need to find something in the world you want to change and associate yourself with an amazing group of people that can solve the seemingly impossible.

What he has done and what he is doing with his life makes your daily issues and problems seem like small hills compared to the mountains he is climbing. I would highly suggest anyone to visit his website to see his story and the lives he is impacting: http://mickebeling.com/.