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By Michael P. Feldman
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America's housing debate has a blind spot. The conversation focuses on affordability, construction costs, interest rates, and homeownership. Those are essential. But there is another part of the equation that receives far less attention: what happens to housing after it is built, and who is responsible for managing it.
According to the Federal Reserve Bank of St. Louis, the national rental vacancy rate stood at 7.6 percent in the third quarter of 2026. That is not a market with zero available units. It is a market where existing units are not being used efficiently. Some sit vacant because of long turnaround times.
Others become uninhabitable because deferred maintenance was allowed to metastasize. The housing exists. The management does not.
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Cost of Inefficient Management
I have spent most of my career in this industry. I co-founded and built a property management company in New York City from zero revenue to tens of millions before selling it.
I have seen what good operators do and what happens when management fails. The difference is rarely about the building itself. It is about the capacity, resources, and standards of the business running it.
For example, the NYC Department of Investigation reported that the current average duration of a NYCHA vacancy is approximately one year, with turnover taking four to six months, depending on the development. In a city with a rental vacancy rate of 1.4 percent, the lowest in half a century, that is a structural failure.
The units exist. The management system cannot prepare them fast enough.
Professionalizing Property Management
I am not arguing that large companies are automatically better, or that consolidation should happen for its own sake. Independent operators are not the problem. The problem is that the industry has historically been fragmented and undercapitalized, and the rising service standards residents reasonably expect have not kept pace with what many operators can deliver.
If a management company is one person, and that person is sick or takes a personal day, you are not in the same position as you would be with a larger, well-capitalized company. If a mistake is made, a larger company is more likely to have the capital to issue a refund rather than come up with excuses.
Technology has made operating at scale more achievable than in the past. Dispersed properties can be managed more efficiently. Communication can be faster. Maintenance can be tracked and resolved with greater visibility. But technology is a tool, not a substitute for standards.
The industry has improved in physical infrastructure. It has not improved enough in customer service, communication, and responsiveness.
Rethinking the Resident Relationship
This is where my term "resident customer" matters. Words shape expectations. "Tenant" can conjure a lack of respect for the person living in a property. "Resident customer" reframes the relationship. It does not change the economics. It changes the standard. Words do matter. The phrase can apply to any type of resident.
If the industry moves toward more professional, better-resourced operators, the outcome is straightforward. Units turn over faster. Maintenance is resolved before it becomes deferred. Residents renew their leases because they trust the service. Housing stock remains usable for longer. Building more homes matters. Managing the ones already built matters just as much.
If nothing changes, the consequences are equally clear. Vacancy rates will remain elevated in markets where units sit unused. Deferred maintenance will continue to push older properties toward the point where demolition becomes cheaper than repair. Residents will absorb the cost of unreliable service, and the housing stock will lose value before it loses resident customers.
Policymakers should consider what a functional housing system requires beyond construction permits. Property owners should look beyond management fees and ask what level of service the fee actually funds.
If you are budgeting for a 3 percent management fee rather than 4 percent, that extra 1 percent helps pay for a better manager. The difference between a well-run property and a poorly run one is not always visible on a P&L (profit and loss statement). It shows up in the condition of the building, the stability of the residency, and the long-term value of the asset.
The housing crisis will not be solved by construction alone. It requires a property management industry that is professional, responsive, and accountable. The buildings are only as strong as the businesses responsible for looking after them.
Michael P. Feldman is co-founder of Priority People Companies, a property management platform, and former CEO of Choice New York Companies. The views expressed in this article are the author's own.
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