Glossary of Real Estate Research Terms
- ABSORPTION PERIOD
- The number of months necessary to rent a specific number of units. If over 12 months,
the absorption period is adjusted to reflect replacement for turnover (see aggregate
absorption and net absorption).
- ABSORPTION RATE
- The number of units expected to be rented per month.
- AESTHETIC AMENITIES (CURBSIDE APPEAL)
- Used as part of the ccomparability rating, this factor assigns a point rating to a
project's physical appeal to potential tenants. Included in this rating are an evaluation
of grounds appearance and landscaping, quality of maintenance, and quality of architecture
- AGGREGATE ABSORPTION
- The total number of units absorbed by a subject site without accounting for turnover.
- COMPARABLE MARKET RENT
- The amount a potential renter would expect to pay for the subject unit without income
restrictions given current and projected market conditions. Comparable market rent is
based on a regression analysis for the market area. Factors influencing a propertys
potential to achieve the comparable market rent include the number of units at that rent,
the step-up base at that rent level and the age and condition of the property and its
- COMPARABILITY INDEX
- A factor used to determine the relative competitiveness of any given multifamily
project. This index is established based on a scale developed by Danter and Associates that
assigns point values to a project's unit amenities, project amenities, and overall
aesthetic rating (curbside appeal).
- CONTRACT RENT
- See street rent.
- a type of multifamily housing in which each household is part-owner of the community. A
cooperative will usually involve a purchase or "buy-in" of the unit, and
decisions affecting the community are typically made by majority votes of unit holders.
Unit holders also share in the projects equity. Government subsidized units
typically involve very low cost buy-ins and low rents geared towards low-income
- The number of units per acre.
- ECONOMIC VACANCY
- An existing unit that is not collecting book rent. Economic vacancies include manager's
units, model units, units undergoing renovation, units being prepared for occupancy, and
units being discounted. Danter and Associates determines vacancies based on a market
vacancy standard (see vacancy).
- EFFECTIVE MARKET AREA (EMA)SM
- The geographic area from which a proposed development is expected to draw between 60%
and 70% of its support. Also the area from which an existing project actually draws 60% to
70% of its support. An EMA is determined based on the area's demographic and socioeconomic
characteristics, mobility patterns, and existing geographic features (i.e. a river,
mountain, or freeway).
- An older adult (age 55 or over). Typically, households in this age group contain no
children under 18.
- ENTRY IMPACT
- A prospective tenant's perception of a unit's spaciousness on entering a unit; a first
- EXTERNAL MOBILITY
- Households moving to an area from well outside a market area.
- FAIR MARKET RENT
- The maximum chargeable gross rent in an area for projects participating in the HUD
Section 8 program. Determined by HUD.
- FIELD SURVEY
- The process of visiting existing developments as part of the information-gathering
process. Each project listed in this survey has been visited on-site by an analyst
employed by Danter and Associates, unless specified otherwise. Also the name of the section
detailing information gathered during the field trip.
- Farmers Home Administration, former name for RD. See RD.
- GARDEN UNIT
- A multifamily unit with living and sleeping space all on a single floor. May be in a
- GOVERNMENT SUBSIDIZED
- Units for which all or part of the rent or operating expenses are paid for directly by a
government agency. Government subsidy programs include HUD Sections 8 and 236, RHS Section
515, and other programs sponsored by local housing authorities or agencies. Typically,
tenants are charged a percentage of their income (usually 30%) as rent if they are unable
to pay the full cost of a unit.
- GROSS RENT
- Rent paid for a unit adjusted to include all utilities.
- HISTORIC TAX CREDIT
- Program which gives income tax credits to investors who restore old or historic
buildings in designated areas. This is a separate program from the low-income housing Tax
Credit program (see Tax Credit).
- The United States Department of Housing and Urban Development. The primary agency for
sponsoring subsidized housing in the United States, particularly in urban areas.
- HOUSING CHOICE VOUCHER
- A government subsidized housing program administered by local public housing agencies
through which income-qualified tenants can use government subsidies to reside at any
project which meets certain qualifications. Qualified households pay 30% of adjusted
income or 10% of gross income, whichever is greater. Government subsidies pay the housing
unit owner the difference between what the qualified household pays and the area Payment
Standard. Voucher holders may choose housing that rents for more than the area Payment
Standard, but they will be responsible for paying the difference between the charged rent
and the Payment Standard
- INTERNAL MOBILITY
- Households moving within the same market area.
- MARKET-DRIVEN RENT
- The rent for a unit with a given ccomparability rating as determined by the regression
- MARKET VACANCY
- See vacancy.
- MAXIMUM ALLOWABLE INCOME
- The highest income a household can make and be eligible for the Tax Credit program. The
maximum allowable income is set at 60% of the area's median household income unless
- MEDIAN RENT
- The midpoint in the range of rents for a unit type at which exactly half of the units
have higher rents and half have lower rents.
- Metropolitan Statistical Area. Denotes an area associated with an urban area. MSA
determinations are made by the Census Bureau based on population and interaction. Nonurban
areas included in an MSA are marked by a high rate of commuting and interaction. MSA
boundaries are particularly important in determining maximum allowable rents for Tax
Credit development (see PMSA).
- NET ABSORPTION
- The total number of units absorbed when accounting for turnover.
- NET RENT
- The rent paid by a tenant adjusted to assume that the landlord pays for water/sewer
service and trash removal and that the tenant pays all other utilities.
- 100% DATABASE
- When Danter and Associates conducts a field survey, we gather data on all (100%) of the
modern apartments in an EMA. This methodology allows us to examine the market at all price
and amenity levels in order to determine step-up support and to use a regression analysis
to determine market-driven rent for any given amenity level.
- Primary Metropolitan Statistical Area. Used for Metropolitan Statistical Areas that have
been combined with other adjacent MSAs into a larger Consolidated MSA. Each PMSA is
defined in the same manner as a standard MSA (see MSA).
- PROJECT AMENITY
- An amenity that is available for all residents of a community. Project amenities include
laundry facilities, swimming pools, clubhouses, exercise rooms, playgrounds, etc.
- RADIAL ANALYSIS
- An analysis focusing on the area within a set distance of a site (usually 1, 3, 5, or 10
miles). Such analyses usually disregard mobility patterns, geographic boundaries, or
differences in socioeconomic characteristics which separate one area from another.
- Rural Development. Formerly Farmers Home Administration. The primary agency of the
federal government for overseeing government subsidized housing programs in rural areas,
primarily through its Section 515 program.
- REGRESSION ANALYSIS
- A mathematical analysis in which each project surveyed is plotted on a scatter diagram
using rent by unit type and the project's ccomparability rating. From this graph a
regression line is identified which identifies the market-driven rent at any given
ccomparability rating level.
- RENT GAP
- The difference in price between a unit type and the next-largest unit type. For example,
at a project where one-bedroom units rent for $350 and two-bedroom units rent at $425, the
rent gap is $75. May also be used to identify premium rents or special amenities.
- REPLACEMENT ABSORPTION
- The number of tenants necessary for a project to attract to counteract the number of
tenants who chose to break or not renew their lease.
- STEP-UP SUPPORT (OR STEP-UP BASE)
- The number of multifamily units existing within the EMA with rents within a specified
dollar amount below the proposed rents at a proposed multifamily site. Step-up support is
calculated separately for each unit type proposed, and may include units of another,
smaller unit type (for example, step-up support for proposed one-bedroom units may include
not only one-bedroom units but also studio units).
- STEP-DOWN SUPPORT
- The number of units within a given unit type and ccomparability rating level but with
rents above the proposed rent. This total measures the number of tenants in a market who
may be willing to move to a new project that provides a similar or higher level of quality
at a lower rent.
- STREET RENT
- The rent quoted by a leasing agent or manager to a prospective tenant, regardless of the
utilities included. Also called contract rent.
- TAX CREDIT
- Short for the low-income housing Tax Credit program (LIHTC) or IRS Section 42. This
program gives investors the opportunity to gain tax credits for investing in multifamily
housing for low- to moderate-income households meeting certain income restrictions. This
designation does not refer to the historic Tax Credit program (see historic tax credit).
- TOWNHOUSE UNIT
- A multifamily unit with a floor plan of two or more floors. Typically, townhouse floor
plans living areas and sleeping areas on different floors.
- Units whose tenants choose to break or not renew their lease.
- UNIT AMENITIES
- Amenities available within an individual unit, or only to individual tenants. For
example, a detached garage and external storage are considered unit amenities because they
are generally available only to individual tenants.
- UNIT TYPE
- Based on the number of bedrooms: studio, one-bedroom, two-bedroom, etc.
- UPPER-QUARTILE RENTS
- The rent range including the 25% of units at the high end of the range scale.
- UTILITY ALLOWANCE
- Adjustment for utilities not included in the rent in the Tax
Credit program. The adjustment is used to keep proposed rents within gross rent guidelines
of the program. It is also used to adjust gross rents to compare with area net rents.
- As used by Danter and Associates, a vacancy is a multifamily unit
available for immediate occupancy. Manager's units and model units are not counted as
vacant units, nor are units that are unrentable due to excessive damage or renovation.
This definition of vacancy is often referred to as a market vacancy and is different from
an economic vacancy (see economic vacancy).
- See Housing Choice Voucher.
SM - Service Mark of Danter and Associates