ISS BLOG - ‘Slate’ Article Carps on ‘Sneaky’ Rate-Increase Policies in Self-Storage, Industry Experts Debate ECRI PracticesISS BLOG - ‘Slate’ Article Carps on ‘Sneaky’ Rate-Increase Policies in Self-Storage, Industry Experts Debate ECRI Practices

A recent “Slate” article criticizes controversial pricing practices within the self-storage industry, namely the use of low introductory rates to entice customers coupled with subsequent rate hikes. Though not all facility operators apply this approach and many do not support it, the business is coming under sharper scrutiny as a result. Could this lead to long-term, negative consequences including lost business and even government regulation?

Ron Matejko, Associate Editor

January 16, 2025

4 Min Read
Numerous arrows pointing up with percentages and a man using a marker

A recent article published by “Slate,” an online magazine dedicated to news, politics, technology and culture, shined a not-so-positive light on modern pricing practices within the self-storage sector. Specifically, it questioned the ethics behind the use of low introductory rates to lure customers and the subsequent application of price hikes known as existing-customer rate increases (ECRI). In fact, author Daryl Austin referred to this approach as “sneaky” and “unsavory.”

The story opens with the sad tale of a woman who lost her job in 2023 and needed to move back in with her mother. She put most of her stuff in a 10-by-10 storage unit that started at $45 per month but eventually cost her $220 per month—in less than a year. However, it also cited several industry professionals who spoke out against aggressive ECRI, noting how it leaves some customers feeling like they’ve fallen victim to a bait and switch.

Right, wrong or overstated, these pricing practices appear to have increased negative sentiment toward the self-storage industry that could result in short- and long-term consequences for facility owners and managers, even investors and developers.

Pushback From Within

As the self-storage industry evolves from one that’s mostly comprised of independent “mom and pop” operators to one involving more large corporations, there seems to be an escalating tug-of-war between the major players and their smaller competitors. One of the issues at the fulcrum is aggressive ECRI.

Related:The Question of Self-Storage Capex: A Strategy for Mitigating Financial Risk While Maximizing Investment Return

The large self-storage providers often use teaser rates to take market share from smaller operators who lack the scale or deep pockets to compete. Furthermore, the independents can’t absorb frequent tenant turnover, and they rely on referrals. Overall, they must be more protective of their business reputation.

When customers are lured in by cheap rates and soon after surprised by frequent and large increases, it leads to hard feelings and lashing out. Even though smaller operators may not be using this practice, they’re still paying the price, seeing their bottom line shrink due to the overall “stink” now clinging to the entire industry. Some are getting angry and speaking out.

“I’m frequently on conference calls and in meetings with other [self-storage] operators, and the general attitude of nearly all of them towards aggressive ECRIs is embarrassment and disgust,” Burke Bradshaw told “Slate.” He’s the president and co-owner of Towne Storage, which operates more than 30 facilities in Arizona, Nevada and Utah.

Related:A Solid Self-Storage Operations Budget: What to Include, How to Track Progress, And Why Flexibility Is Key

The Importance of Transparency

The 2019 Consumer Experience Report by Zendesk emphasized that 77% of customers feel transparency is a key element in their purchase decisions. When consumers believe a business is being upfront about its pricing and terms, they’re more likely to feel good about the transaction. Bait-and-switch undermines this sense of openness and erodes trust.

While the competitive nature of the self-storage industry is unlikely to diminish anytime soon, all operators need to be clear with customers about their rates, including introductory prices and how increases work, including when they’ll occur and how much they’ll be. This was the opinion expressed in a recent blog by Jason Koonin, CEO of Bluebird Self Storage, which operates 25 sites across six Canadian provinces.

If you’d like to learn more, Inside Self-Storage offers additional coverage, including these articles about ECRI. We also offer videos about optimizing rental rates, strategies for managing rate increases, and how independent operators can compete against large operators.

Potential Long-Term Impact

While the self-storage industry has largely avoided government regulation, industry leaders may wish to shift their focus from things like consolidation, expansion and competitive advantage to this pricing issue that’s coming to the fore. Think what could happen if the negative media coverage continues.

Related:The Secrets to Doubling Your Self-Storage Facility’s Value Through Strategic Revenue Management

In fact, you need look no further than the multi-family sector to see the potential impact of questionable pricing tactics. The Justice Department and attorneys general from 10 states recently filed an amended complaint in their antitrust lawsuit against data and software firm RealPage to sue six landlords for allegedly “participating in algorithmic pricing schemes that harmed renters,” according to a press release from the DOJ.

The “Slate” article has already noted displeasure from operators within the self-storage industry. If that voice gets louder, it could attract the attention of outside power brokers and change how business is done for everyone.

Maintaining clear transparency about pricing and offering reasonable rate increases are key to building long-term trust with our self-storage customers. By prioritizing clear communication and fairness, operators can avoid alienating tenants and enhance satisfaction, ultimately leading to better retention and stronger brand loyalty.

About the Author

Ron Matejko

Associate Editor, Inside Self-Storage

Ron Matejko is associate editor at Inside Self-Storage. To reach him, email [email protected].

Subscribe to Our Weekly Newsletter
ISS is the most comprehensive source for self-storage news, feature stories, videos and more.

You May Also Like