"Prescriptive AI will change maintenance work" as seen in CREJ Property Management Quarterly 7.2020 edition
by Christin D. on 7/20/2020 6:01:00 PM
Smart purchasing practices can save BIG money! As featured in Colorado Real Estate Journal's Q1 Multifmaily Properties Quarterly edition
by Christin D. on 4/21/2020 11:03:48 AM
Get SMART with us! Where do you begin?
by Christin D. on 4/2/2020 1:41:40 PM
SMART technology selection: what do renters want?
"Smart" technology is quickly gaining popularity as part of the "On-Demand" lifestyle, and as a preferred feature when residents are weighing rental housing options. Recently, the National Multifamily Housing Council (NMHC) and Kingsley and Associates released a 2020 survey of resident preference results, in which 70% of renters surveyed indicated a preference to see "smart" tech that saves money and increases their ability to control their homes remotely. With the rapid change of technology, decision overload can easily confuse investment strategy decision making when weighing in on what features to add to current rental investments. But are these innovative additions sound investments to generate income and or reduce expenses, or are they just necessary to keep up with the competition?
Top 3 "smart" features
Data from the 2020 Resident Preferences Report supports the adoption of “smart” home features in multifamily housing, and the top 3 features residents want are “smart” thermostats, “smart” lighting, and “smart” locks. 70% of respondents indicated they want to see at least one of the 3 features present in their new homes, and 5% even report it as a requirement. Buyers Access has partnered with industry specific suppliers who specialize in “smart” home upgrades and have numerous offerings and solutions available. But first, let's look at the 3 top categories revealed by renters starting with number 1 contender, “smart” thermostats.
The most desired "smart" home feature and ranked number one by residents is the "smart" thermostat. The increased visibility and control residents gain through this innovative solution allows them to control and adjust temperatures on demand and remotely. Money-saving benefits associated thermostatwith "smart" tech features is a primary reason why residents ranked it number one on their list.
Smart lighting ranked second by residents in the 2020 report in desirability, and has many similar features and benefits to the "smart" thermostat. Increased control over lighting on demand and remotely, or even automatically decreases wasted money on electricity. Being able to control lighting remotely can offer increased peace of mind when it comes to electricity bills resulting from forgetting to turn off the lights. Another benefit is the deterrence of crime. Adjusting lighting at any time from anywhere makes it look someone is present in the house when it is unoccupied. That extra peace of mind these two benefits can bring can be compelling with some people.
Smart Access Control
Ranked number three, "smart" locks, are continuing to gain traction and increasing in demand to residents and property management teams. Smart locks compliment "on-demand" services and eliminate the need for property management teams to validate entry permissions, potentially removing liability if guests or vendors need access when a resident is away. Property management team can change locks remotely, grant access to vendors, and aid in resident lockouts through the ability to lock, unlock and change access programming on demand and remotely. Common area controlled access through smart lock features also save landlords time and money by eliminating physical requirements to complete the task, and also track usage for liability purposes.
Buyers Access is Smart, and ahead of the curve
RemoteLock– cloud-based access control
One of the newest supplier partners to join Buyers Access offers a high caliber, seamless smart home technology for access controls. Remotelock specializes in cloud-based access point technology crafted explicitly around the needs of residential, business, and commercial properties. This technology solves many of the most significant access management and scheduling issues that property management faces daily. The RemoteLock solution is cloud-based and can be controlled from anywhere, eliminating dependence on a server or hardware that demands presence on-site.
SmartRent – advanced smart tech operating solutions
SmartRent, another new Buyers Access supplier partner, creates multifamily technology solutions that provide property owners and managers a platform to better monitor and protect assets and create operational efficiencies, all while driving ancillary income. Some of the SmartRent technology options include vacant unit management, advanced leak detection, vendor access, common area, and building access, and predictive maintenance reports. In addition, residents of SmartRent communities can use the mobile app to control their smart home devices (thermostat, keyless credentials, lights) from anywhere. SmartRent will help develop a customizable plan that fits the level you are looking to invest in smart building operations.
Get smart with us
Both Buyers Access partners undoubtedly offer a robust amount of options to meet the Smart Home Tech results shown in the preferences survey. Contact your Buyers Access account manager or sales team for more information on SmartRent and RemoteLock.
Rent Growth VS. Expense Optimization - How do you measure up?
by Christin D. on 1/7/2020 4:50:00 PM
Another great way to drive NOI – rent growth alone is so 2019!
Pushing rent increases to drive NOI and relying on income alone sooner or later will take a back seat, and expense optimization will again prevail as the industry cycle moves towards economic slowdown. Multifamily management firms that stay ahead understand that NOI through expense optimization can be achieved easily by partnering with a Purchasing and Procurement Service Organization.
While intelligent expense management is always a common goal among companies, the opportunities to maximize this area of your business are on a different plane. Purchasing optimization as a strategy to drive NOI requires resources and expertise at a different caliber than one can do alone, which is why you need a specialized Purchasing Optimization Organization to partner with like Buyers Access.
Purchasing Quiz: Your purchasing defined
Activity: Select the number of each statement that your company currently has in place for purchasing and procurement activities.
- Onsite teams have the necessary tools to complete purchasing activities effectively through our company resources and systems.
- Our current payables process eliminates pricing and invoicing discrepancies.
- We have the best pricing negotiated with multifamily industry MRO suppliers such as Home Depot Pro Multifamily, HD Supply, Maintenance Supply Headquarters, and like organizations.
- The procurement department handles purchasing activities at our company. For larger projects and renovations, we have regional maintenance and construction project managers that ensure efficiencies.
- Our company has reporting metrics that track product spend, pricing, contractor scopes, and uncovers opportunities for further optimization.
- We have less than 1000 units and don’t need a purchasing service.
Now that you have your numbers match them with the numeric category below and unlock insight into how to better drive NOI through expense optimization.
Don’t skip anything!
"Our site teams oversee our purchasing operations and have a (weekly) report they turn in showing the efficiency."
Operating efficiency is becoming harder to achieve and the reliance on site teams to a level that drives NOI is sadly unrealistic. Staffing challenges plague the multifamily industry, especially in maintenance. Residents also are now expecting an “On-Demand” lifestyle now that services like “Amazon-Prime” and others are able to deliver faster than ever. The expectation as created the same “On-Demand” expectations for residents and site-teams have to work fast! We can’t overlook it or balk on adopting it, we must keep up with innovation and deliver. Residents are the number one revenue driver in the multifamily industry so taking care of them to exceed their expectations is important and takes priority. Take care of your teams and your residents and place purchasing optimization in the hands of an inclusive purchasing organization specializing in the multifamily industry, such as Buyers Access.
"Our site managers oversee our payables and are always catching duplicate invoices and price discrepancies right when they happen."
That is a good start, but your manager has so much more on their plate, such as monthly renewals, aggressive rent increase rates challenging retention efforts, overseeing maintenance, etc. The leasing teams, can they help? Where is maintenance? The leasing teams are fighting for their life to get leases and keep the property stabilized while growing GPR (Gross Potential Rent) in a highly competitive market. Maintenance is short-staffed and over-worked, your lender inspection is next week. Let us be the solution. Buyers Access gives on-site teams additional bench-strength through people who support daily purchasing activities, reporting, and contractor sourcing on-demand.
"We have contract pricing with our suppliers already, and we get bulk discounts as it is."
Activity: Test your consistancy-
Let’s validate the price on one item by answering a simple question. You can do this on your own to see if this solution is performing at its highest potential.
- Were you charged the same price on every faucet of the same item number from the same supplier in 2019 company or portfolio-wide?
- If not, how many different prices were you charged for that same faucet from the same supplier in 2019?
"Our procurement department already standardized the company product selection and negotiates these deals."
Having a procurement department is wonderful! Can your procurement department offer "On-Demand" support to your on-site maintenance and office teams to help with things like emergency contractor sourcing, returning incorrect items received, etc.? Do they offer an all-in-one eCommerce site to minimize the risk of pricing errors, save time through automation, or work to source and select "top-item" lists? Buyers Access' model is inclusive and will provide both managers and leadership visibility through customized reporting in real-time, approval controls, and other innovative solutions and strategies.
Are you still trying to figure out the answer to the faucet question in category 3?
- Let’s talk reporting.
The visibility you gain through operating data-driven purchasing activities makes answering this question easy. You may be struggling, and that is okay. Line item analysis and segregating products in GL code reports by supplier and item type can take a lot of time, time you may not have or can be better spent focusing on resident retention. Once you do find these metrics, the second part is cross referencing to ensure that agreed upon or "contractor" negotiated pricing between you and your supplier pricing was used 100% of the time, company-wide.
You do want the same low prices each time, correct? Of course you do! And why work harder when you can work smarter?
And finally.... Scenario 5
"We have less than 1000 units and don't need any purchasing optimization."
If you are under 1000 units and don’t think that this is applicable, think again! We have a special Small Units Program that leverages resources to get them the same deals realized by larger organizations when buying maintenance and repair supplies. Click here to learn about our Small Units Program now.
AND....Back to the Faucet activity in Scenario 3 ... Did you find the answer?
My final proposal for you is this:
Buyers Access will answer your faucet question AND will uncover the total savings opportunities based on your companies personal puchasing behavior for 2019. That takes care of time savings through finding the answer to the faucet exercise (and future pricing verifications) faster, and money saved through leveraged resources and strategy.
CLICK TO GET ACCESS- to begin the process.
We want you to make an informed decision about the fate of your NOI and we can show you your data, not a hypothetical example. We want you to have all the information to support your taking the next step and saving 10-20% on purchasing without sacrificing quality or quantity.
Thanks for playing and don't forget...
Rent growth as a strategy alone is SO 2019 and it's 2020!
Prepare for your Property Inspection!
by Christin D. on 6/4/2019 4:55:34 PM
You are sitting in your office and all of the sudden you get the email…your annual inspection is coming up! What do you do first? Managing residential property on behalf of property owners is a big responsibility. Protection and preservation of the asset, along with minimizing liability and associated risks, should always be at the front of any manager’s mind.
Property inspections can take on many forms. Inspections can be done for improvement grants, financing compliance, state and federal affordable housing programs, and annual property insurance. Depending on the extent of the inspection required and the organization conducting the inspection, there are some universal best practices recommended to help you prepare. Whether it be a lender, HUD, or an asset manager, it is always a good idea to make sure the property is operating at it’s highest potential. Let's take a look at some areas to touch on when preparing for a property inspection.
Is there a checklist?
Depending on what kind of inspection there is going to be on your property, there is a good chance that you can form a checklist yourself, or find one from your local apartment association, lender, or the inspection organization themselves. This list is a helpful piece of information to have, especially for those newer to the multi-family management industry who have not been through a property inspection previously.
If you are able to obtain a copy of the guidelines for the inspection, you can identify and spot check exactly what to look for. Preparing for inspection well in advance is a critical step to a successful inspection, and it is better to be over prepared by leaving plenty of time for unforeseen challenges.
Where to start
If you are unable to obtain a checklist, there are plenty of ways to strategize and form a plan of action. First, look for safety concerns posing potential risk. Second, focus on maintenance issues or possibly even deferred maintenance elements that may exist. Bidders Access®, the newest edition to the Buyers Access® suite of services, can easily help you obtain bids for large capital projects.
Finally, examine every aspect of your asset for general cleanliness and appeal. Look at landscaping. Make sure shurbs are manicured and overgrown hedges are cut low to create good visibility. Pressure wash all concrete halls, staircases and/or decking. Ensure these surfaces are level and no trip hazards exist. Repair cracked stairs and rotten wood as needed.
Place orders now
The last thing you want to do when it comes to an inspection is to be concerned with whether your replacement windows and doors will come in fast enough to make required repairs. Talk to your Buyers Access® Account Manager or contact our Member Services team to place an order. Another great feature of the Buyers Access® program is help in finding hard-to-locate items. Leverage the Buyers Access® team to perform research and ordering support, thus maximizing your time to focus on other critical elements.
Exterior hazard control
Completing property inspection walks on a weekly basis and documenting any needed repairs is a best practice many management companies require of their on-site teams. Before an inspection, complete a thorough walk of the property and notate any siding, sidewalk, or parking lot damages. Research and negotiate product purchasing by using your Buyers Access® Account Manager and Member Services teams. Doing so will ensure you get the best supplier pricing and the correct items delivered.
Meet with your team
Inform your team of items on the pre-inspection list that caused concern. Hold a team meeting to review the pre and post inspection checklists, and inform them of the outcomes, items discussed, and any feedback. This empowers everyone on the team to play “offense” and tackle for-seen property needs as they arise. By learning what to look for teams can work together to ensure the property is always in great shape.
Property inspections are important to do on a regular basis to avoid situations where you have to scramble to prepare. Above we have reviewed some key pieces to the puzzle when prepping for property inspections. It’s always tough to get ready for an inspection on a moments notice, especially when unprepared. Maintaining company and industry inspection best practices can prevent your property from needing an overhaul when it’s time for an inspection. What ways do you prepare for a property inspection on your asset? Leave your ideas and methods in the comments!
3 Reasons to Convert to LED
by Christin D. on 5/30/2019 9:38:00 AM
Property utility expenses have become a line item on budgets that has been getting more attention in recent years. Causes of this attention include a rise in environmental concerns, focus on tighter cost controls when selecting fixtures for use in multi-family buildings, and studies showing significant time and cost savings by reduction of bulb replacements.
Together, property management teams, Buyers Access™, and supplier partners, have implemented extremely successful solutions to minimize the cost of utilities. Buyers Access™ has been instrumental in helping owners and operators complete several successful retrofits to LED lighting, and other energy conservation programs for assets built prior to the more economic and environmentally acceptable alternatives now available. LED retrofits and water conservation programs are two of the larger budgeted line items Buyers Access™ continues to see being considered across the nation.
Why fix something that isn’t broken? Here we will examine 3 reasons why you should include an LED Retrofit proposal with your next budget “wish list” items, and reasons to take the LED retrofit challenge.
Better control over electrical costs-
LED lighting lasts 15 times longer than the incandescent bulbs that were formerly widely used in new construction. Shifting to LED means less time spent by maintenance personnel changing bulbs with a higher frequency of burn out, as well as a lower cost of materials over time.
In 2008, LED bulbs were quite expensive. Since then, LED bulbs have reduced in cost by up to 90 percent. LED bulbs use significantly less energy and dramatically decreases common area electrical expenses. Substantial savings in energy consumption can be realized by properties electing to undertake an LED retrofit project with Buyers Access™.
Reduction in property carbon footprint-
Incandescent bulbs use an average of 70% more electricity than LED bulbs. Switching to LED bulbs preserves energy consumption and reduces the carbon footprint. Less waste is generated with the longer lasting LED bulbs as a result of less frequent bulb changes, which positively impacts the environment.
There are numerous grants and energy rebates which may also be available to your property if you choose to undergo an LED retrofit. Buyers Access™ and its supplier partners work diligently nationwide to plan these projects from start to finish, allowing properties to realize cost and rebate savings upon completion, and for years to come.
Reduction in property risk and increased aesthetic appeal-
Liability is dramatically reduced when areas are well lit and when bulbs burn out less frequently. Keeping up with lighting inspections and the constant replacement of bulbs gives any maintenance team concerns, especially on properties with interior hallways, or that have darker locational challenges.
Recently a variety of information has been published regarding LED lighting vs. other forms of lighting, and the potential correlation to productivity and mood. The change to LED lighting for increased productivity is something that could benefit the communities. Aesthetic appeal can also increase upon an LED retrofit project through nicely illuminated hallways and parking lots. This can potentially help to retain existing residents, and secure new prospects. Add this with the cost savings, and an LED retrofit will pay for itself over time.
Your next steps-
Buyers Access™ and its supply partners are dedicated to partnering with industry leading manufacturers specializing in LED retrofits. If you are currently a member of Buyers Access™ and would like a quote for a site wide LED retrofit project, contact your Account Manager and we will obtain a variety of pricing options and strategies to complete the project. If you are interested in learning more about how Buyers Access™ can help your team, please reach out to our sales department at email@example.com and a specialist will be in touch with you and start a complimentary analysis on savings.
The Power of LED Lighting (2019, May) Rooflines Vol. 55 No. 5., p. 23-25. Aaron Smith, Senior Lighting Consultant at LFP Lighting.
Shaw, P. (2018, August 1). LED Lights the way to savings. Multi-housing Pro Magazine Online.
4 Multifamily Development Trends to Watch in 2019
by Michelle N. on 12/19/2018 4:51:00 PM
Mixed-use development, lifestyle amenities, and the desire for more affordable housing will shape next year's development landscape.
By Dan Doyle
Changing demographics, shifting social values, and evolving development landscapes all continue to drive a surging, nationwide demand for multifamily housing. With empty-nesters looking to downsize, millennials staying single longer, and a general desire for a more convenient and social lifestyle, more and more “renter-by-choice” Americans are forgoing mortgages for lease agreements.
As demand for new housing units continues to drive the multifamily sector in 2019, developers are tasked with finding new ways to satisfy the growing need for apartments.
1. Expanded Project Portfolios to Meet Middle-Market Demand
As resident profiles expand, so too must the communities and units built to attract and accommodate them. The multifamily sector has been heavily weighted at the top end of the market in the past few years, but in 2019 the industry will experience an expansion of scope in order to serve a more diverse resident base, especially the middle market.
At The Beach Co., we’ve focused heavily on catering our product to a discerning and selective resident wanting luxury apartments. While demand for this product is still alive and well, we're looking to develop a more balanced portfolio of communities with a variety of price points.
In 2019, we’ll see a spike in demand for attainable rental options, and in fact, we’re already seeing demand for attainable housing in all our active markets today.
Through increased segmentation, developers are realizing that affordable housing options can't be a one-size-fits-all approach. While some developers in the most competitive markets—where space is at a premium—offer attainable housing in the form of micro-units, this approach is less popular in smaller markets.
Moreover, the tiny-apartment trend will be unable to satisfy the growing middle-market demand. In the Southeast, suburban areas present an opportunity to offer larger floor plans, which is key in targeting middle-market customers. To maintain a competitive edge next year, multifamily developers must adopt targeted solutions that appeal to each potential market, which includes paying more attention to attainable and more affordable housing solutions.
2. Increased Customization
The key to a successful lease-up is to differentiate your product to appeal to the demands of your market’s unique resident base. Developers are achieving new levels of project customization through enhanced research and development practices. Demographic research is a good starting point, but a deeper understanding of a potential site’s history, economy, industry, and culture all contribute to meaningful customization.
For example, knowledge of emerging industry in a region can be the impetus for new development projects. This was the case with The Beach Co.’s Summer Wind project, currently under construction in Dorchester County, S.C., which was conceptualized in response to a number of major international companies, including Volvo, Bosch, Boeing, and Mercedes-Benz, opening facilities in the area.
Conducting thorough market research before embarking on a new project is essential and goes beyond informed marketing efforts to heavily influence property and unit design.
Additionally, with the deluge of customer data now available, developers are better equipped than ever to ascertain the needs and desires of future residents. Conducting thorough market research before embarking on a new project is essential and goes beyond informed marketing efforts to heavily influence property and unit design.
A resident-centric application of customization can be seen in the continued evolution of amenity offerings. While the amenity war in the multifamily sector has been raging for the past few years, 2019 will usher in a wave of technology-focused amenity offerings like smart access-control systems and automated package-pickup services.
3. Shared Amenity Space
In recent years, mixed-use developments have thrived as a result of evolving lifestyle preferences among today’s renters. Whether in an urban-core setting or a suburban town-center design, young and old generations alike are seeking more-active, -social, and -walkable lifestyles with short commutes and proximity to leisure activities.
In response, mixed-use developments offer an artful blend of residential, office, and retail spaces. Consequently, prized amenities formerly only available to multifamily tenants are now available to nonresidents. Proximity and exposure to the greater community has led a growing number of owners to allow nonresidents to purchase memberships to common-area amenities such as fitness centers. This alternative finance stream marks a growing evolution in the multifamily business model and provides for greater utilization of a community’s fixed assets.
Additionally, employees of corporate tenants in mixed-use developments typically have access to the residential amenities as part of their benefits package. This will be the case with The Jasper, which my firm is currently building in historic downtown Charleston, S.C. Slated for completion in 2020, the luxury, 12-story, mixed-use building will include 219 luxury multifamily units, 75,000 square feet of Class A office space, and 25,000 square feet of first-floor retail. The mixed-use amenities feature high-end on-site dining and shopping; a rooftop pool and garden with a sundeck and outdoor kitchen; a commercial-quality fitness center; a clubroom with lounge and demonstration kitchen; and private wine lockers.
4. Urban-Core Workarounds
Today’s renter still wants to live downtown but is being priced out of the urban market. Construction costs remain high, so developers must look to alternative solutions like adaptive reuse of existing buildings to help solve some of the cost issues in the urban core.
In these markets, retrofitting an existing building may be more attractive, as the structure costs are already in place, so multifamily developers can deliver a product just as nice as a new community with a lower cost basis, resulting in a lower rent for the resident. Adaptive-reuse solutions will likely offer a slimmed-down, lifestyle-driven amenity package, which may include services such as refrigerated lockers for home grocery delivery or customer-driven parcel centers catering to online shoppers.
While we’re seeing a push for attainable solutions from urban-core renters, most cities have offered few incentives for developers to build affordable multifamily product in the past. In recent years, we’ve witnessed some cities doing away with or significantly reducing the number of required parking spaces in new developments by incentivizing developers and residents to promote and use alternative modes of transportation, such as ride sharing or public transit.
In 2019, we’ll see more municipalities putting programs in place to assist with affordable housing development, with some creating mandates that require a certain amount of affordable housing. To really make a project attractive to developers and local governments, I predict we’ll see more incentives for developers to make projects affordable in the form of subsidies through tax abatements, tax increment financing districts, or other forms of public–private partnerships.
Today more than ever, it’s important for developers to form partnerships with local municipalities in active markets to better understand the needs of the city and its residents.
Read more at MFE
Experiences on Demand: The Next Phase of the Amenities Arms Race
by Michelle N. on 11/26/2018 4:28:00 PM
On-demand apps are shaping the world around us. Our recent partnership with Homee is an example of an on-demand maintenance solution for multifamily property managers, all at the tap of a button. Check out this article below on how multifamily owner–operators continue to race to find the next best method to separate themselves from the pack in a demanding industry.
Increasingly, offering a variety of amenities isn’t enough. Owner–operators must be able to deliver these attractions when and how residents want them.
By Devin Wirt
Amenities have been among the hottest topics in real estate for years, as developers and property managers continue to race to find the newest feature that will help them court a pool of residents that are increasingly seeking both experiences, convenience, and a sense of community.
Today, amenities are in demand not just at luxury residential properties but all manner of apartment venues, office buildings, active-adult communities, hotels, student housing, and across nearly every other type of asset. As amenity spaces have become the new normal, the reality is that many in real estate are discovering that coordinating, managing, and booking the precise mix of amenities needed to attract and retain tenants is both more difficult and costly than expected.
In many cases, expensive and well-crafted amenity spaces are going significantly—or, in some cases, entirely—unutilized. Many operators also find that bringing amenity providers to their properties is far more costly than anticipated. In markets like New York City, a typical fitness class can cost as much as $200 per session. Other associated costs, including insurance, maintenance, and the workforce needed to manage a full menu of amenities, place further strain on an apartment owner’s existing resources.
Whether today’s renters are ordering a pizza, calling a cab, or renting a movie, they expect to be able to order everyday services online or with their mobile phone or tablet. Across the country, the same phenomenon is taking hold with fitness classes, house cleaning, dog walking, and pet sitting. As this massive shift continues to advance, property owners and managers will need to keep pace by offering their residents a platform that places a full suite of amenities just a click away.
Technology Answers the Call
Fortunately, real estate is seeing a massive influx of technology solutions to address this societal shift. Platforms such as Hello Alfred have already begun to merge traditional butler services with the so-called “on-demand economy.” As more and more properties begin to incorporate amenities, the demand for a single, one-stop platform that can help customize, coordinate, and consolidate a full menu of services will only continue to rise.
Perhaps understandably, much of the conversation regarding multifamily amenities has focused on the latest and greatest features across the industry. What began with simple on-site swimming pools and gyms has quickly evolved into fitness venues, yoga studios, voice-activated technology, dog spas, and golf simulators.
But just as property owners and managers have been forced to reckon with renters’ desire for a sense of experience and community, they must also be ready to offer the level of convenience and on-demand access consumers increasingly crave.
As owner–operators continue to race to find the next method to separate themselves from the pack, they’d be wise to not just consider what amenities they’re offering, but how to deliver them to tenants in the customizable, on-demand fashion residents increasingly are demanding.
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:
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.
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.
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.
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.
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.
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.