Industry News | Week of January 6
HOT & RELEVANT TOPICS
How to Deal with the New Age of Package Delivery
Online shopping now accounts for 12% of all retail sales, which means an ever-increasing number of packages arrive each day at multifamily communities. Property managers must adapt to accommodate the influx. The ability to navigate issues including security, insurance, package clutter and potential legal issues will prove crucial in maintaining the convenience level for renters. The industry is largely turning to technology to stay ahead of the trend, turning to touchscreen interfaces at the front door in favor of traditional doorbell intercom systems to handle receiving. Renters may also see increased security deposits or liability insurance requirements as properties build or retrofit spaces to facilitate their package systems.
Read Cheryl Ann Gray’s story in National Real Estate Investor.
5 Ways Multifamily Design Will Change
While the demand for apartment living continues to grow, renters’ preferences are changing. A 2020 NMHC/Kingsley Associates survey points to five key areas where multifamily design will need to change to meet renter expectations. Connectivity – in the form of reliable cell reception, high-speed internet access and pre-installed Wi-Fi – tops the list. The industry must also find a way to accommodate renters’ desire for control and personalization – which has long been considered a benefit of homeownership. Renters want the flexibility to stay in their current apartments despite lifestyle changes, through the use of movable interior wall systems or convertible furniture to adjust the layout. Renters also increasingly seek conveniences and want everything they need at their fingertips. Rounding out the list is health and wellness.
Read Rick Haughey’s story in Multi-Housing News.
Here’s What Renters Want More of in 2020
A recent resident preferences report from the National Multifamily Housing Council and Kingsley Associates outlined morphing renter preferences, many of the tech-driven variety. But all renters aren’t ready to dive headlong into the tech revolution quite yet. According to the report, only 14% would rent a home sight unseen, despite the increasing propensity of virtual tours. And while co-living made a pronounced impact in 2019, 70% of renters indicated they are not interested in that type of arrangement. Despite the polarizing concept of short-term rentals, only 16% of residents said they’d avoid a community that allows it. Dog owners, meanwhile, indicated they’d pay a premium of $28-$34 per month at a community with a pet park and other pet services.
Read Julia Falcon’s article in Housingwire.
IN THE NEWS
Two-Thirds of Renters Made Sacrifices to Afford Rent
Median rent in the U.S. currently accounts for 27.8% of the median income. A percentage of 30 is considered the tipping point where rent is considered unaffordable and 32% is when homelessness begins to increase. With that, a majority of renters (66%) indicated that they make at least one financial sacrifice to afford rent, according to Zillow research. Most often, renters sacrifice entertainment expenses (38 percent), but others reduce down-payment savings, cancel or postpone health services, reduce insurance coverage and make several other sacrifices. Others opt to work more, as 25% indicated they acquired a second job to help offset rent expenses.
Read the article in Multifamily Executive.
Apartment Operators Cut Back on Renovations in Wake of Rent Regulations
As rent regulations become a reality in particular locales, apartment companies are cutting back on renovations. In New York City, for instance, renovation efforts were down 44% (or $71 million) over the past year. As part of a renter protection act passed in June, apartment owners’ ability to pass along improvement measures has been significantly slashed. Major Capital Improvement increases are now capped at 2%, reduced from 6%. While rent might be more affordable in rent-control locales, apartment operators will be much more hesitant to upgrade their properties.
Read Miriam Hall’s article in Bisnow New York.
Companies Quitting Facebook Marketing
Facebook is losing favor in multifamily marketing campaigns. While some are transitioning to Messenger, others are quitting the social media platform altogether as companies fail to see the same returns as five years ago. Though it still draws a massive audience, Facebook’s legal entanglements, privacy issues, data breaches and advertising practices are causing many to steer clear. Additionally, most people engage with Facebook to connect with friends and family rather than research or shop for apartments. More importantly, Facebook simply isn’t popular with millennials and Generation Z, and as marketing campaigns begin to shift their focus to those demographics, Facebook no longer makes sense.
Read the story by Paul R. Bergeron III in Units Magazine.