Company News

Report: These Trends Are Radically Disrupting Multifamily Housing

by Michelle N. on 3/19/2018 11:43:00 PM

Renters' desire for personalization and less stress, integration of AI and IoT into apartment infrastructure, concentration of 35+ age groups will drive multifamily in next 12 years. By Lauren Shanesy

The multifamily industry is on the brink of a design revolution, and it’s disrupt or be disrupted.

“If you look at other industries in real estate, [such as] office, hospitality, retail—and you’re starting to see restaurants—they’ve all been disrupted,” says National Multifamily Housing Council (NMHC) vice president of industry technology initiatives Rick Haughey, in the report. “Why should we think we’re exempt from this disruption? If you’re not thinking about it and talking about it, you’re at risk of being displaced.”

The NMHC's Disruption Report, released earlier this year, examines the ways demographic shifts and technological advances are affecting housing and what it will mean for apartments of the future.

A number of trends stand out as game changers that designers, developers, and managers should pay attention to if they want to stay ahead of the curve. Here are some of the report’s key takeaways:

Technology
Advances in the smart-home space will cause technology to become part of the core infrastructure of apartment communities.

By 2020, technology research firm Gartner predicts, 26 billion devices will be connected through the cloud-based Internet of Things (IoT).
Donald Davidoff, president of D2 Demand Solutions, a multifamily sales consultancy, calls artificial intelligence (AI) “the single biggest change that will affect us” and likens the impact on white-collar workers to what happened to blue-collar workers during the Industrial Revolution. Read more about that here. A full 65% of U.S. adults say that within the next 20 years, most deliveries in cities definitely will (12%) or probably will (53%) be made by robots or drones instead of humans.

Marketplace
Consumers are now accustomed to on-demand delivery of goods and services, placing a greater emphasis on the importance of lifestyle in communities.

Nearly two-thirds (63%) of respondents to the NMHC 2018 Consumer Housing Insights Survey said their lives are so hectic that they look for ways to make things easier.
Ninety percent of the U.S. population will connect to the grid via smartphones by 2023, according to experts. Seventy-two percent of consumers and 89% of business buyers expect companies to understand their unique needs and expectations, according to the 2017 State of the Connected Customer survey by Salesforce.com.

Demographics
As demographics shift, developers will have to serve a greater variety of households and housing needs.

The U.S. population is getting older and more diverse, and the apartment industry should be studying the expanding bubble of aging Americans—65% will be 35 or older in 2030—and immigration trends instead of millennials. The 73 million baby boomers in the United States accounted for 58.6% of the net increase in renter households between 2006 and 2016, according to NMHC tabulations of U.S. Census data. By 2024, immigration will surpass internal population growth for the first time, according to Hoyt Advisory Services research. Immigrant families are more likely to rent than native-born Americans, and their household sizes tend to include four or more people.

Employment
Mobile technology and wireless Internet are changing where and how people work, with more employees teleworking than ever.

Forty-three percent of workers in America do some telecommuting, according to Gallup—and more would if they could. Read more about how to design for teleworking residents here. In the past decade, there’s been a 50% jump in offline alternative work (independent contractors, on-call workers, temps, and the like). Forty percent of respondents to the 2018 Consumer Housing Insights Survey say they plan to telecommute more in the future. Small Business Labs found that more than 1 million people sought an enhanced social experience, networking opportunities, community support, and learning opportunities in coworking spaces in 2017.

Transportation
A migration back to urban, walkable areas, along with services like Uber, are changing the way residents commute. They now rely on personal vehicles less and less, leaving apartment communities to figure out how to adapt to a fluctuation in parking needs going forward.

America has far more parking spaces than it needs—three to eight per vehicle, according to the University of California.The ride-share industry is booming; Goldman Sachs predicts it will balloon to $285 billion by 2030. As the unpaving of paradise accelerates, as much as 75 billion square feet of parking space stands to be eliminated, leaving open the question of what will happen to that space in the future.

Health
Residents are focusing more on physical and mental health and are looking for apartments with spaces that promote wellness.

Ninety-two percent of renters in the NMHC 2018 Consumer Housing Insights Survey said they wish they had an environment that would promote better sleep. In a 2017 survey by the American Psychological Association, nearly nine out of 10 people (86 percent) who say they constantly or often check their email, texts, and social media accounts report higher stress levels. Providing a retreat starts with sound attenuation, as 91% of renters say soundproof walls are important to them.

Resource: MFE