President's Pen July/August 2018

July 16, 2018

Posted By: Claire Michael in TAA News & Updates, the ApartMentor,

Summer is in full swing, time to apply the sunscreen and break out the boogey boards. Lots of families in the Triangle take advantage of our fortuitous location and make that quick trek to the coast for some rest and relaxation. While many of us are going to utilize these sunny days to bathe in the pool or ocean, those in the multifamily industry know that the summer months can sometimes feel overwhelming because of the amplified traffic, AC units that fail, and increased exposure. It’s easy to get wrapped up in the mayhem and tackle the day-to-day operations as they occur, but what is crucial for successful communities to flourish is looking ahead amidst the summer chaos and exploring what innovations are on the horizon for the multifamily industry. But before we can look forward, it’s useful to examine the history of home buying to see how past desires to buy a home have been replaced with current trends towards wanting to rent.

After the Great Depression, Roosevelt’s “New Deal” catapulted the American housing market. Following many of these consumer stimulus measures created by the New Deal, the Federal Housing Administration (FHA) was created in 1934. The establishment of the FHA helped solve money lender worries by offering protection to lenders and substantially reducing the risk of a borrower defaulting on a loan. With these safety nets, and other programs such as Fannie Mae, the housing market saw a surge in home purchases that had never before been experienced across the American landscape, and renting was losing momentum. Fast forward to modern day and we see a much different picture. More households are renting now than at any point in the past fifty years. While many Americans in the past were eager to buy homes and stay in one location for the rest of their lives, today’s market contrasts with a population that is more transient and wants the ability to be mobile. Families were also eager to have a large yard and plenty of space between neighbors. While many of us today still desire this, it can also be argued that potential residents will happily trade in a large yard for access to amenities and proximity to work/friends/city. With this uptick in renting, it’s imperative for us to stay ahead of the game and pay attention to the advances and modernizations that make residents in our community happy to call a rented space home.

So what innovations will keep people renting at the record-breaking percentages we see today? Here are four advances that I believe will keep the multi-family industry on the cutting edge of modernization and maintain our industry growth: Leasing kiosks that allows the consumer 24-hour access to tour and lease, flexible walls with floor plans that allow the resident to adapt their living space, smart-apartments that control everything from restocking fridges to anticipating maintenance needs, and future amenities such as drone landing pads and digital detox spaces.

Leasing Kiosks

When was the last time you used a self-checkout at your local grocery store? The answer is probably recently, and current market trends demonstrate that companies implementing these expedient systems are ahead of the curve. The apartment industry is changing in this regard as well, driven by customer demands. Modern consumers desire 24-hour leasing at their fingertips; with the ability to rent an apartment, sign a lease, and move in without ever entering a clubhouse. Leasing kiosks allow the renter to identify themselves at the kiosk and take a tour of the community, directed by a virtual leasing agent. Technology such as this will allow us to maintain optimal occupancy while operating on the prospects personal schedule.

Flexible Spaces

The physical layout of an apartment has always been important when it comes to the renter finding the perfect home, with the biggest concern being the actual size and orientation of the rooms. Today, customers in major cities are seeking flex spaces and homes that can be adapted to allow for changing lifestyles and family sizes. Future residents will have apartments with walls and modular spaces that morph and change based on their needs. What could be a kitchen at one moment could transform into a living area the next. One example of a technology that allows more flexible space is the Ori. This voice-activated, movable piece of furniture, turns your studio into an office, creates large closets, and pulls your bed down by voice-activated request. As prices for precious square footage continue to increase, flexible spaces will certainly be something that potential residents will search for in the coming years.

Smart Apartments

Smart apartments are changing the future of our industry, and the adaptations go beyond digital locks and Nest thermostats. Technology will be able to streamline the residents’ needs and allow for immediate customer service in their new homes. What if your apartment was smart enough to predict your light bulb was about to burn out, or that the HVAC system was leaking Freon? What if your refrigerator anticipated that your milk was going to expire, and restocked it before you even knew? We can expect to see these technological advances entering our market in the immediate future and some homes already have them incorporated. One company already dominating this smart space is WePlenish. This pioneering company has already created the vision of a reordering system with smart containers that sense when your food essentials are running low. On the maintenance side, we are fully aware that the modern consumer expects immediate solutions to any issues they encounter. Too often we find ourselves being reactive when it comes to failing mechanics in our residents’ homes, since the only way to learn of a problem is to receive a work order. But these issues highlight another way that the smart apartments will change how we resolve maintenance issues. Appliances will send automatic alerts to our maintenance team members to let them know they need service, that the Freon needs refilling in the HVAC, or a light bulb is due to be changed. Smart apartments will revolutionize how we conduct our business and head off any maintenance concerns before they become larger issues.

Amenities

Future amenities are the final item I would like to explore. Anyone working onsite can attest to the fact that package delivery to residents can become problematic and exhausting. With packages already stacked high in closets, and a trend of online ordering that shows no hint of declining, we can sometimes feel like we are working in giant storage lockers! But there are apartment communities that will be able to alleviate these frustrations by featuring drone delivery decks and landing pads. Communities with these pads are already being constructed in Los Angeles and New York. Residents can coordinate deliveries on their smartphones and pick up packages on designated landing areas, freeing up space where lockers once stood. Another example of innovative amenities are co-working spaces. Co-working spaces are already popular in cities everywhere, and they offer another avenue for our industry to attract potential renters. What a benefit it would be to renters if they could walk out of their home and conduct business in a communal office, without having a commute. And best of all, these co-working spaces could be a work area during the day while offering a location for pop-up events after hours. Some current pop-ups include wine tastings, book club meetings, cooking classes, and even childcare. Making spaces versatile and able to accommodate work and pleasure will certainly attract prospective residents. Finally, an amenity that will become increasingly popular are digital detox spaces. Digital detox spaces are relaxing areas where people can unplug from the constant onslaught of information we ingest daily. One example recently mentioned in a “National Multi Housing Council” article, demonstrates living green walls lined with foliage, large trees, and art. Residents can experience serenity, quiet, and tranquility within the walls of their apartment community.

Although we only touched on a few innovations that are on the horizon, a quick search on Google will demonstrate that there are many more trend-setting features that will become part of our industry. While we try to beat the heat this summer and support our communities, remember to always look forward and stay ahead of our residents' expectations.