Written by
Mr. Ade Samuel and Dr. Amy K. Glasmeier
on
10/16/2018
AvalonBay may not be a household name, but it is a name associated with thousands of households across the U.S. The American company is one of the nation’s largest exchange listed real estate investment trusts (REITs) with an estimated total enterprise value of $31 billion and 285 apartment complexes spanning 11 states. Under the leadership of CEO Timothy Naughton AvalonBay continues to grow while maintaining commitments to company values concerning human rights and the preservation of the environment. Along with these standards for interactions with the greater global community company executives show their continued commitment to the ethical treatment of their employees in many ways, one of which includes becoming a living wage employer as of 2016.
Since its formation as the result of a merger between Avalon Properties and Bay Communities in 1998 AvalonBay has quickly risen to become a major leader in the field of REITs. The company found its route to success through adept housing development, demonstrated by the fact that since 2010 it has begun almost $7 billion worth of development projects of which $4 billion worth have been completed. In 2012, however, AvalonBay veered away from its usual pattern of expansion and grew significantly through the partial acquisition of Archstone Inc. (a privately held apartment landlord). This acquisition allowed AvalonBay to gain stronger holdings in areas like Southern California where expansion through development is particularly difficult and nearly doubled the company’s enterprise value. Leaders at AvalonBay have been deliberate and opportunistic in terms of their approach to the company’s growth over the last twenty years, and this mindset has yielded impressive results.
The push to expand at AvalonBay is balanced by a continued commitment to maintain ethical standards in terms of how the company operates. Leaders at AvalonBay have developed and published a human rights statement that lays out the company’s endeavors to combat abuses like forced labor and discrimination, among several others, within the scope of their operations. A similar statement of responsible procurement principles was developed by AvalonBay to hold all of its suppliers to several standards pertaining to the protection of human rights and preservation of the environment. Beyond adhering to these statements AvalonBay continues to engage with regional non-profits focused on affordable housing and helping the disadvantaged, in the areas surrounding its housing developments.
AvalonBay has also taken steps to ensure just compensation of its employees as a means of benefiting its internal community. In 2016 leaders at AvalonBay made the decision to become a living wage employer. The company committed to paying all of its associates a living wage, defined in accordance with the Living Wage calculator run by MIT Professor Amy Glasmeier. This wage is augmented by a flexible set of benefit offerings AvalonBay extends to its employees which includes everything from stock compensation to adoption assistance. The living wage and total compensation package offered at AvalonBay illustrate the value that the company sees in investing in its employees.
There is an air of uniqueness about how AvalonBay operates. Leaders within the organization are focused on ethical expansion, and that prioritization of ethics colors their thinking concerning employer-employee relationships as well. AvalonBay becoming a living wage employer is a result of a particular leadership philosophy; a philosophy that has served these apartment developers well in the past and looks set to do so moving forward.
Sources:
https://www.avaloncommunities.com/~/media/Files/CorporateResponsibility/HumanRightsStatement.pdf?la=en
https://www.avaloncommunities.com/~/media/Images/Corp/CorporateResponsibilityRevamp/CR_Report_2016.pdf?la=en
https://www.avaloncommunities.com/~/media/Images/Corp/CorporateResponsibilityRevamp/AvalonBay-Responsible-Procurement-Principles.pdf?la=en
