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In a competitive housing market like D.C.’s, lease incentives such as one month’s free rent or a reduced security deposit can entice potential tenants to commit to a building. But at a new 45-unit, light-filled development in Trinidad, the owner is offering different kinds of carrots: $1,000 to a tenant’s charity of choice—plus a complimentary trip to Cuba—when a person signs a lease.
Until March 1 and while apartments are available, that is.
Ditto Residential officially opened Hendrix, a multifamily project filled mostly with two bedrooms at 1326 Florida Ave. NE, earlier this month. As of Wednesday, according to a spokeswoman for the firm, four leases had been executed at the property, which features studios through three-bedrooms at a maximum of 1,025 square feet. (Efficiently designed, the average unit size is 600 square feet.) Prices range from $1,515 a month for a studio to more than $3,315 a month for a three bedroom. Since 2008, the boutique Ditto has developed more than 60 projects.
Although some restrictions apply, the idea behind offering prospective Hendrix renters dual incentives to commit to a lease is to align with those renters’ values, explains Callie Bruemmer, Ditto’s marketing director. “They have an adventurous lifestyle and they like to travel,” she says. “They also value giving back.” These “alternative incentive deals” are a first for the D.C.-based property firm and are becoming more common across major cities.
Nicola Y. Whiteman, senior vice president of government affairs at the Apartment and Building Association of Metropolitan Washington, says the swath of luxury real estate in the District is leading developers to be creative. “We are likely to see more of these offers surrounding the amenity-rich housing to which millennials are attracted, and this is the same demographic that so many developers are competing for,” Whiteman continues.
The trips to Cuba are being provided in partnership with El Camino Travel, which specializes in small group trips that include a company-supplied photographer to document the travels. And the idea for $1,000 charity donations came up one morning when Ditto Residential CEO Martin Ditto and Graham McLaughlin were jogging together. McLaughlin co-founded Changing Perceptions, a nonprofit devoted to the formerly incarcerated, and Ditto sits on the organization’s board. “Graham and I are good friends,” Ditto says. Giving to nonprofits as a “values-based” incentive “seemed like a no brainer.”
If a prospective Hendrix resident happens not to have a preferred charity, $500 will go to Changing Perceptions and $500 to Reach Incorporated, a literacy and tutoring organization focused on youth. Ditto Residential is a corporate sponsor for both groups. Ditto himself is also friends with Mark Heckler, Reach’s executive director.
So do non-traditional lease incentives make economic sense? Hendrix is a modestly sized building in a gentrifying part of D.C., in a market where many multifamily-property owners often provide financial sweeteners. To potential renters, doing things differently with unique incentives and amenities can make a building stand out.
“Some of our members have run promotions and given away things like a free cruise, but a $1,000 donation to charity is something new and extremely generous that definitely appeals to millennials,” says Robert Pinnegar, CEO of the Arlington-based National Apartment Association, a trade association for the rental housing industry.
For now, Ditto is trying it out. Bruemmer says new incentives—currently “under wraps”—are in store in the coming months.