I fear our industry faces a potentially existential public relations and business threat caused by some legal, but tone-deaf, revenue management and customer service practices that may result in our industry’s inability to remain independent of governmental scrutiny. Unflattering news reports have surfaced regarding “exorbitant” rent-rate management practices. The common themes: large operators not being transparent about rental rates and failure to acknowledge and escalate customer concerns to upper management. These concerns were echoed by owners and operators I spoke with during the SSA Fall Convention.
Municipal governments are contributing to this problem by implementing restrictions on the development of storage facilities in many of the same metropolitan markets experiencing higher rental rates. For example, when new customers were being charged almost $100 less for the same unit size, a customer in California asked his store manager for an explanation regarding his 67 percent rent increase notice. Unsatisfied with the manager’s response, he asked to speak with a supervisor. After no response, he contacted his city councilmember, who acknowledged that most storage rentals are for personal use and said, “If we can cap residential rent rates, we may as well cap storage rent increases too.” Shortly thereafter, with no success in reaching the storage operator, city staff was preparing a rent control ordinance! Do we want the government to tell us what we can charge? If these egregious practices continue, that day will come.
In The San Francisco Chronicle’s article “Self-Storage Prices Are Soaring to Unexpected Highs – Even for the Bay Area,” a homeless person complained that her storage rental was too expensive. A Baltimore journalist reported on a fed-up customer who vacated her unit after a 40 percent increase raised her monthly rent to nearly $1,000. She was unsuccessful in contacting the operator.
In each of those situations, neither the operators nor a trade association responded to requests for comment. Avoiding frank conversations with the media perpetuates a one-sided narrative. As chairperson of the California Self Storage Association’s Legal & Legislative committee, I can attest that disgruntled consumer complaints regarding excess rent increases trump all other consumer inquiries. We have a duty to prevent unnecessary regulatory creep by providing customers with transparent pricing policies and a process for customers to be heard by upper management. If the manager cannot ameliorate the situation to the customer’s satisfaction, someone else from the organization needs to step in. It would be unfortunate for the decisions of a few to impact everyone. Prevent the bad press, governmental scrutiny, and regulation. Be proactive and act now!
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Steve Mirabito is the President of StoragePRO Management and has been involved in the self-storage industry since 1986. He has routinely been named a “Top 10 Operator” and has served as Chairman Emeritus California Self Storage Association. As one of the largest self-storage management operators, he pioneered management systems and training programs utilized throughout the self-storage industry.