By Tim Blackwell — August 2015
An iconic North Carolina landmark for centuries has been the tobacco barn. The traditional barn has long been symbolic of the importance that tobacco has played to the Tar Heel economy since the late 1600s, so much that a North Carolina without tobacco barns, says one historian, would be like Holland without windmills.
Left today mostly for preservationists to embrace, the wooden barns that once air-cured much of the nation’s tobacco stand silent. Slowly, they are being overshadowed by another landmark that is far less iconic but represents a more socially acceptable trend: Smoke-free apartments.
Ginkgo Residential, a property management company based in Charlotte that provides property management services in the Southeast, has converted several dozen apartment communities along Tobacco Road to smoke-free housing, and officials there say it’s good for business. Smoking has been off limits inside units, offices and designated common areas with little fallout from residents.
“Customers want it. It’s good for business. It saves us money,” says Scott Wilkerson, Ginkgo’s Chief Investment Officer. “It’s cheaper to turn over an apartment that hasn’t been smoked in.”
Smoke-Free Apartments Reduce Costs
Wilkerson has long been a proponent of smoke-free apartment living and says the aura of Tobacco Road had little influence on the company’s decision to begin converting properties several years ago. One reason was the costly financial exposure to allowing residents to smoke in apartments, including cost to clean units and physical property damage.
Prior to 2007, four Ginkgo Residential apartment buildings were destroyed by fire resulting from smoking. In one year, the company filed insurance claims on nine fires that were started by smoking materials inside and outside of apartments.
Also, Wilkerson says Ginkgo properties typically spend $2,000 to $4,000 in turnover costs for apartments that have been smoked in compared to $500 to $800 for those inhabited by non-smokers. One apartment occupied by heavy smokers was particularly expensive to clean.
“We’ve had a turnover cost as much as $12,000 and the resident paid for it,” Wilkerson says. “We basically had to change out the HVAC system, including the ductwork. It was really, really bad. We even replaced the flooring.” In 2008, Ginkgo polled residents at communities in Charlotte and Chapel Hill to gauge interest in smoke-free living. Not to Wilkerson’s surprise, the results found that 75 percent of residents preferred a smoke-free building and 50 percent said they would pay extra for it.
“In almost every case, we get the same answer,” Wilkerson says. “Our customers overwhelmingly support a ban on smoking in all apartments.”
Smoking soon was banned inside units, as well as on decks, patios, breezeways and common areas duly designated. Smoking areas were set up away from building entrances.
“It’s not about smokers, not about the individual,” he said. “It’s about the smoke. We welcome smokers, but we just don’t allow them to smoke in our building.”
Once a decision is made to transform a community into smoke-free, Ginkgo goes to its residents well in advance of the start date. Ginkgo utilizes literature provided by NAA and other agencies to set the stage. Results of surveys are shared and a timeline that’s usually about a year and a half from start to finish is established.
“It takes that long because of the process of engaging residents, and then gradually rolling it out as you enter into new leases or renewed leases,” Wilkerson says.
While there were a few who opposed the measures, Wilkerson said Ginkgo hasn’t experienced a noticeable loss in business. In fact, more doors have opened for newer residents who he believes are more likely to live at the property longer. Acceptance, he said, coincides with a cultural shift in smoking among adults.
As the idea of smoke-free living continues to grow, Wilkerson anticipates that other property management companies will jump on board, much like he predicted in 2006 when making a presentation at the Greater Charlotte Apartment Association.
“Such a high percentage of our residents prefer it and want it,” he says. “When the market wants something, more and more people will do it. They’re finding it’s better for business, residents prefer it, it saves money and reduces legal risk. I think owners will gradually embrace it.”
While rules are in place to encourage residents to abide by smoke-free policies, Ginkgo has had few violators. Wilkerson said the company follows policies typical of those in the hotel industry, which has dealt with smoke-free rooms for years.
Violators at Ginkgo properties first receive a verbal warning, followed by a written warning and finally a $250 fine that’s payable to the American Lung Association.
Tim Blackwell reports for PropertyManagementInsider.com, produced by RealPage, where this originally appeared.