Owners and managers of affordable housing communities often facecrime incidents that harm the tenants and the property. Aproactive, public-private program that reduces risk will improvethe residents’ quality of life and can reduce liability exposureand insurance costs.

Too often, property owners and managers react to crime. Theycall the police, hire a security company or evict troublesometenants. None of those actions prevent problems from reoccurring,reduce liability or help residents. When violent acts in acommunity become regular fodder for TV news, the property isperceived as a place where criminals live. Its value, income andinsurability are all affected.

Programs to keep crime away

Police and safety consultants have recognized this type ofsituation and developed programs that keep trouble from starting.Landlords and property owners who commit time and resources tothese programs can see results from adopting their practices.

TheInternational Crime Free Association, a non-profit organizationdedicated to those whose mission is related to the goal and purposeof the Crime Free Programs, and other private firms offerassistance with policies that:

• Identify the types of crime in the community
• Screen for offenders before they sign leases
• Develop and execute a plan for improved security
• Engage residents through communication and participation incrime prevention

While the particulars vary according to the property and plan,the goal is essentially the same: to keep crime away from thecommunity.

Property owner liability concerns

A property owner has many good reasons to invest time and moneyin engaging the police and security consultants, to upgrade theproperty’s security. The most obvious is liability; a jury can holda property owner or manager liable for damages if they knew therewere dangerous people on the property and that the property owneror manager did not take reasonable security measures to prevent acriminal act.

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In Texas, a community owner and manager settled an inadequatesecurity claim for $1.5 million following a gun battle between drugdealers and a tenant that resulted in the death of another tenant.A Mississippi jury awarded a plaintiff $2.46 million on a claimthat inadequate security resulted in the sexual assault and murderof a female tenant.

Properties can become uninsurable

Insurance companies set rates and decide whether to renewpolicies for apartment communities based largely on payouts and theresponse of the property owner and manager to recurring problems.When claims are extensive, the annual liability insurance premiumcould jump 40% to 100% at renewal versus the more typical 8% to10%. If a property becomes known as dangerous, it could becomeuninsurable, even if the policyholder offers terms at a six-figuredeductible.

A much less-expensive and more-effective solution is to partnerwith police and private firms on a crime prevention plan. InHillsborough County, Florida, more and more property owners andmanagers work with local police implementing a program known asCrimePrevention Through Environmental Design. They coach theproperty management company on improvements ranging from lightingand security cameras to door, window, lock standards and landscapedesign and maintenance. The police walk the property to see thatchanges are made and track progress through the number of policecalls and arrests.

Once the police certify a property as crime-free, the owner canadvertise that fact to tenants and prospective residents. Just asimportant, the property manager can tap into a database shared withother crime-free properties of offenders worthy of tracking,including people arrested or involved in crimes. The list can beused to screen applicants and evict residents.

The database gets a boost from the Crime Free Lease Addendum that the International CrimeFree Association developed. Once modified to meet state law, itgives the landlord a quick way to evict a tenant regardless ofwhether the individual has been convicted of a crime.

Crime-reduction plans

Private firms can play a role, also. Consultants, many who areformer police officers specializing in community problems, createand implement crime-reduction plans. They also make sure that callsfor police assistance are promptly answered and that theauthorities take note of the improvements.

Our clients in the Tampa Bay area say crime prevention programsare working well. Programs in other metro areas that have a longertrack record proves that they work. Those that implement these typeof programs, report less vandalism, fewer personal injuries andfewer police calls.

Related: A 10-point risk management checklist forresidential rental properties

The most direct measure of a program can be the insurancepremium. Our research shows that the liability rate per door formultifamily properties is 30% to 60% lower for properties with aclean loss experience versus one with a poor loss experience.

Insurance companies won’t immediately slash premiums based onthe short-term success of a crime-free program. They look atthree-to-five years of data when setting rates. However, they dolook at year-over-year claim figures when determining whether torenew policies and by how much to increase or, in the present softmarket, decrease premiums.

The benefits of a crime-free program benefit everyone. Tenantsenjoy a better life, one free of fear from crime. This in turn,changes a property’s reputation, which can raise occupancy ratesand rents and in time, insurers will see the positive changes andreflect them in their rates.

Tom Kersting is president of FranklinStreet Insurance Services in Tampa, which providescoverage to multifamily and other commercial properties. He may bereached at [email protected].