Recap by Paul Bergeron
Apartments.com joined with Grace Hill, featuring KingsleySurveys, along with the National Multifamily Housing Council (NMHC) to report on trends and preferences in apartment living and operations.
Apartments.com joined with Grace Hill, featuring KingsleySurveys, along with the National Multifamily Housing Council (NMHC) to report on trends and preferences in apartment living and operations.
Jagan Arumugham, Senior Director, Head of Analytics & Data Science, Apartments.com was joined by by Margette Hepfner, COO, Residential Management, Lincoln Property Company, who brought relevance and today’s perspective on the KingsleyReports Renter Preferences Survey and Sarah Yaussi, Vice President, Business Strategy, NMHC. Grace Hill’s Senior Survey Team Manager, Katie Jeffirs, hosted the presentation.
Topics included types of rental homes, smart apartments, flex space, flex living, Wi-Fi connectivity, home deliveries, pets and fitness centers.
Renters search for homes that are right for them, and there’s a growing array of options to meet individuals’ needs. From the survey, based on consumers’ most recent search, 57 percent wanted a traditional apartment; 23 percent wanted a townhouse; 19 percent wanted a single-family rental (SFR).
Housing supply is a critical issue, Hepfner said, and it’s expected to remain that way for the unforeseeable future. “Single-family rental development is looking to help fill that need,” she said.
Sarah Yaussi said householders have specific needs, and sometimes apartment living can't provide them. For example, some householders need more space, perhaps for those with multiple pets, and a backyard.”From 1974 to 2007 the SFR market represented 7 percent of all rental starts. From 2008 to today, it’s about 11 percent.
The SFR market has been ignored for a long time, Yaussi said, “and it’s a big chunk of the rental market. So much of this activity has been in the past year or so. It’ll be interesting to see how that turns out.”
Speaking to one home developer, Hepfner said they told her that pre-pandemic, their average entry-level home was $300,000; and today, it’s $600,000.
“Nothing is different about the home,” she said. “Not a higher profit margin, etc. It’s just the rising cost of everything such as materials, supplies, and labor. So, these homes that renters are looking to transition into just aren’t there.”
Interest in a renter membership “club,” where renters can live in many places as part of their lease, measured well.
Yaussi said a good number of people who moved during the pandemic did so because they could work where they wanted, and wanted the flexibility to move based on need or season.
This shifted the interest in STRs, which plays into the membership model.
“Some operators are trying to create a brand loyalty program,” Yaussi said, adding that about 46 percent of respondents overall were interested in this, and for those who do remote work, it was 56 percent.
Hepfner said a program such as this, “warrants more information about how this would work. Could it guarantee a unit for wherever you want to live and at whatever time of the year?”
Fellow panelist Jagan Arumugham, said he’s seeing interest in this, “but not too much.”
Rethinking the renter space
Residents are re-thinking how they use their space. During the pandemic, people wanted to tame their junk, the panel said. Survey data show renters value flex space and are placing a higher priority in home organization. Interest in modular closet systems has increased by 36 percent since 2020.
“We make sure that every inch of the home has some purpose,” she said. Interest in modular closet systems has increased by 36 percent since 2020, according to the survey.
Hepfner said developers need to help renters use their space better and balance work and home. “Let’s figure out what that space looks like. Having a place for everything is important, especially if we’re staying inside our apartments longer. The average size today is about 800 square feet. That’s not a lot.
Yaussi said that research shows that if people move, the two reasons are price and more space.
“So, if you can make it more functional, you can keep them longer and reduce need for new residents,” Yaussi said. “This ‘extra’ space also needs to be used if they want to entertain others.”
In the age of live-work-play at home, renters are looking for flexibility whether it’s furnished or unfurnished, furniture that can transition to different uses or adaptable floorplans.
Versatility rules, as nearly two-thirds said flex space was either important or extremely important. Flex living goes beyond the physical space.
Yaussi said that 60 percent of renters moved during the pandemic. A quarter who did made that decision because of telecommuting options. Some went city to suburb, city to city, and city to rural.
Hepfner said that Lincoln Property Company is doing all it can to accommodate.
“We’re looking to put more desk space into our homes,” she said. “We’re making sure that every inch has some purpose. Even in the clubrooms. We built them wanting them to have a Starbucks-like [vibe] to include work space and collaborative space. It’s the ‘together but separate’ approach.
“This also gives them the ability to adjust that space as necessary so our communities have a longer lifespan — we don’t have to completely redesign the space when we want a new look. Instead, it can be one thing on Monday and one thing Tuesday, or our design can be taken to a much longer time horizon.”
Solving for smart home technology
Renters’ interest in smart-home technology is tied to its ability to add convenience or to drive savings, Yaussi said.
Survey results show that the most popular smart feature is the thermostat; 70 percent say they are interested or wouldn’t rent without it. Sensor technology such as leak detection or water-saving features (67 percent) was also popular.
“This landscape is changing as more products come online,” she said. “And it’s the operators who are driving it more so that they can become efficient.”
Hepfner said, “We aren’t gaining new leases from smart features, or losing leases for residents not having the ability to control sound, lighting or locks.”
She said that because there are so many personal preferences for smart technology — including those who don’t want it at all — this makes decisions tough.
“More important to us is wanting to know what is the overall health of the building from a valuation perspective?” Hepfner said. “Are our onsite people able to view a dashboard for occupied and vacant units to monitor utility usage, etc., and to prevent damage or other things that we wouldn’t have known about otherwise? This gives a better understanding of our buildings so we can make better decisions about operating more efficiently.”
Wi-Fi connectivity as vital as ever
When it comes to Wi-Fi connectivity, 86 percent said that reliable cell service was the most important thing they considered when making their decisions to rent. Ninety percent said that they wouldn’t rent if it wasn’t reliable.
Yaussi added: “There is no doubt that there’s greater reliance on connectivity and that will only increase. One-third of respondents said that they are gaming daily. That’s a lot of bandwidth. This is a priority area for operators.”
Online ordering and package deliveries skyrocketed during the pandemic. High-volume package deliveries and perishable deliveries such as grocery items showed measured, but significant growth.
Package pick-up preferences shifted. Self-service pickup solutions such as package lockers or a package room are still the preferred option. People were less interested in people entering their apartments than having a doorstep drop-off.
“During the pandemic, having video camera-managed areas to relieve our onsite staff from handling them has been great,” Hepfner said. “You have to have conversations with the residents about what we’re able to receive and not receive and how. We’ve not gone as far as not receiving them, but we tell them that we’re responsible for their deliveries, except for at some high-value properties.
In the 2020 preferences survey, 26 percent wanted deliveries dropped at the door, but now it’s 37 percent. “This is based on people being comfortable about receiving it that way since more were at home,” Yaussi said.
Pets and fitness centers preferred
Living with a pet is a renter preference: one-third indicated they have a pet. Among renters’ pets, 70 percent of pets were dogs. And 77 percent of respondents said breed restrictions would not have an influence on their decisions to rent.
Arumugham said Apartments.com receives twice as many searches for dog-friendly than for cats. Hepfner said a lot of her communities have moved away from breed restrictions and weight limits.
Having pet-friendly outdoor spaces is crucial, Hepfner said, but also important is providing some type of outdoor space for all residents.
“Be sure to teach the residents how to use the outdoor spaces — what is and is not allowed,” Hepfner said. “When you do that, they begin to see the community as a community and it being “its own” and are more likely to take care of the space and to renew and that’s where we can see more in rent.”
With fitness centers, 70 percent say they are interested in having them and wouldn’t rent without one and only about 40 percent use them. Survey results show it is advantageous to include cardio, treadmills and above all else, free weights.
Hepfner said that Lincoln Property Company would never build a community without a fitness center. The same is true for swimming pools.
“Bike, kitchens, and storage is also important,” she said. “It’s important to ask the renters what they want. Pickleball might be popular in one place but not another.”
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