Research Applications of the Multifamily Housing Institute's Apartment Database
Bogdon, Amy, Follain, James, Goodman, Jack, Manson, Don, Brady, Shaun, Journal of Real Estate Literature
Data on the financial performance of multifamily rental housing has not been available nearly as long as such information for single-family housing. It is believed that this lack of information has increased the cost of debt and equity capital to apartment housing and thus has increased the rents paid by apartment residents. Data on apartments, which is now becoming available through an industry-sponsored initiative, has the potential of narrowing this information gap. This article has several objectives: to describe this new database, AptData TM, to housing researchers to assess the strengths and weaknesses of AptData TM for housing market and policy research, to compare estimates from AptData(TM) With those from other sources, and to offer several potential research applications of this new data resource.
Housing researchers often complain about the lack of data on how housing markets work and what public policies are effective. However, researchers interested in multifamily housing have always had particularly good reason to complain. There has long been a dearth of even the most basic information on the financial performance of the nation's multifamily rental housing stock.
The lack of timely data on the financial performance of apartments has been not only frustrating to researchers but costly to the multifamily industry and ultimately to apartment residents. Imperfect information adds to the risk premia charged by equity investors and mortgage lenders, and these additional costs show through eventually in higher rents charged to multifamily residents.
In recognition of that information need, the apartment industry, with participation and support from the federal government, has developed a database to better inform the decisions of multifamily investors and lenders. This study is an early report to the housing research community on that database. The intention is to introduce the database and offer suggestions for, possible research applications.
2. A brief history of the multifamily housing institute and AptData(TM)
The Multifamily Housing Institute (MFHI) was created in 1994 by some of the apartment industry's largest lenders, owners, managers, and servicers. The support of several major sponsors (Fannie Mae, Freddie Mac, the U.S. Department of Housing and Urban Development, and the Urban Land Institute) and its founding members helped raise over $3 million that allowed the Institute to develop the AptData(TM) system, collect performance information from over 100 initial data providers, and then finally launch the data service on March 30, 1998. The original major data providers include Equity Residential Properties Trust, HUD, Fannie Mae, Freddie Mac, Insignia Financial, NHP, Boston Financial, and Midland Loan Services. This group provided data for the pilot phase of AptData development and served as a proving ground for refining the data collection process.
The Institute's primary mission is to provide good, industrywide information and standardized financing practices that promote an efficient, liquid, stable financing and capital market for multifamily housing, including affordable housing. To that end, MFHI is dedicated to helping centralize the collection and unbiased delivery of information and data services for the industry, promoting the creation and use of standards, and providing related educational services and conferences. The first service from MFHI is AptData a web-enabled data warehouse containing property and loan performance information on about 25,000 properties with over 3 million apartments. It is the largest and most comprehensive source of multifamily financial information ever collected thus far.
At present, the core data in the system have come from a pilot group of 105 data providers. The information received covers various time periods, depending on how each provider maintains asset level information. …