Not long ago, multifamily developers competed to provide wow-factor amenities that would attract residents—from movie theaters and rock climbing walls to dog washes and bike repair stations, flashy property features were sure to grab the attention of prospective tenants.
But the sentiment is shifting, and developers are now focusing on amenities that are more practical. “Amenities continue to be an important part of the lifestyle desired by millennials,” says David Ward, incoming chairman of the National Association of Home Builders‘ multifamily leadership board in Washington, D.C. “However, I think we are moving past more for more’s sake.”
Simply striving to outdo the Joneses can result in “a lot of dead, underutilized spaces,” adds Ward, who is also executive vice president of development for MAA, a Germantown, Tenn.-based real estate investment trust that acquires, develops, redevelops, and manages multifamily homes.
Related affordability issues are prompting owners, operators, and developers to consider which amenities are the most necessary, says Sarah Yaussi, vice president of business strategy at the National Multifamily Housing Council (NMHC).
Take the fitness center, for example. “People say they want it, but when you look at the number of people who say they rarely used it, it’s higher than you think,” Yaussi says.
About 84% of 372,000 apartment residents surveyed nationwide said they’re interested in or won’t rent in a building without an on-site fitness center, yet about half rarely or never use it, according to the 2020 NMHC/Kingsley Associates Apartment Preferences Report released in November.
Developers need to strike the right balance by offering amenities that are both attractive and practical. Here are some of the amenities with staying power, plus tips for future-proofing multifamily housing communities.
Strong Tech Infrastructure
At-home connectivity is a must. More than 9 in 10 NMHC survey respondents said reliable service is important; 44% won’t rent without it. They want it all—high-speed internet, pre-installed WiFi in units, and community WiFi. Nearly two-thirds of residents are streaming video entertainment online.
“You need to be able to start a phone call in your unit, then walk into the lobby to grab coffee and still be connected even as you leave the building,” says Yaussi. Her colleague, Rick Haughey, vice president for industry technology initiatives at the NMHC, calls good telecom infrastructure “the key to future proofing your place.”
Smart Home Features
High-tech conveniences include smart thermostats, lighting, and locks, plus dynamic glass (windows that control solar heat gain, glare, and sunlight). Residents are very interested in smart home features that can save them money, namely programmable thermostats and lighting, according to the NMHC survey.
Yaussi says this tech has become “a true basic utility, as important as having electricity or water.”
With more than 300 properties, MAA gathers its own data on resident acceptance, usage, and pricing by beta testing new ideas, explains Ward, noting that the company’s smart home package has gotten “very positive resident reception.” The bundle includes a smart lock, thermostat, lighting controls, and leak detection connected to an Amazon- and Google-compatible expandable smart hub. The company is rolling out the concept at more MAA properties.
“When you can test and measure the results of initiatives, you can make an informed decision as to the value proposition,” Ward says.
Nearly 4 in 10 residents engage in remote work, the NMHC research found. While many communities used to have enclosed business centers with computers, Haughey is seeing a move toward more open coworking-style spaces. Lobbies include meeting areas and work nooks—often long tables that serve as docking stations.
Toll Brothers’ Union Place community in northeast Washington D.C., has a lobby “set up to accommodate people coworking,” says Yaussi. The various areas serve as mini-booths offering nooks of privacy.
Wellness-related features are important for many renters. Besides on-site fitness centers, wellness includes environmental components like soundproof walls (which nearly 94% of respondents in the NMHC survey are interested in or won’t rent without), noise-reducing window panes (85%) and noise-reducing shades (77%).
While sound-proofing, which generally has a scent-containment bonus, is pricey, it fits into the “push for wellness and good, clean air—and not smelling the neighbor’s food,” says Haughey.
Sustainability features also count toward wellness, with nearly 7 in 10 residents wanting recycling programs and about three-quarters seeking community green initiatives.
A key step in future-proofing is making sure spaces can be easily converted and repurposed for new use once the original intention fades. For example, Haughey has seen community rooms for movies turned into centers for conference calling, even with the stadium-style seating.
His advice: Don’t commit to anything too specific or too fixed in place. With technology’s short lifespan, things will likely need to be swapped out within three years.
Keep in mind, too, that “millennials are the ‘me’ generation, while Gen Z is the ‘we’ generation,” says Yaussi. This means offering amenities like apps that allow residents to connect and communicate with neighbors.
Looking ahead, developers shouldn’t be afraid to experiment with new amenities, says Ward, as long as they’re based on customer research. “You will have hits and misses, and that’s ok.”
Multifamily housing developers and owners can never be certain about what amenities are most worthy of investment. But artificial intelligence is bringing decision makers one step closer to predicting what will have staying power. Enodo, an AI-assisted underwriting platform for multifamily properties, for example, uses data from millions of properties, historical insights, and its own projections to determine the value of in-unit and community amenities.
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