The Next Multifamily Property Competitive Advantage
If there is one thing that those who continue to win even during the most challenging of times can teach us, it is to not look at the ants when there are elephants walking by. Despite devastating losses by many during the Great Depression, some businesses, and industries thrived due to agile and forward-thinking strategies.
Martin Guitars restructured its workforce and differentiated its product lines, including offering more affordable customer options. Procter & Gamble pioneered the “soap opera” to sell soap. The film industry created the “double-feature,” giving moviegoers more value for their money and a way to escape their real-life struggles. Brewers stuck in the middle of Prohibition dramatically diversified their production efforts to include milk, meat, and non-alcoholic beverages such as root beer.
The elephant today is Biden’s $1trillion infrastructure bill heavily championing an environmental agenda. $119 billion will be spent on transitioning to low to zero-emission vehicles, electric vehicle (EV) charging networks, and updating power grids. In addition to this historic bill, many municipalities are mandating EV charging in new and renovation development projects and parking lots.
A noticeable trend for multifamily operators that is a clear consequence of the pandemic is an enhanced tenant interest in lifestyle amenities and the environment. People want to live better and more fulfilled lives after what was (and still is for many) a challenging social time for humanity. Amenities where people live, create convenient and enjoyable lifestyle options, especially when they can’t travel or find themselves confined to their homes.
Moreover, many residents enjoyed bluer skies in their communities during the lockdown. Cities such as Delhi, Los Angeles, and New York City, all notorious for poor air quality, saw significant improvements primarily due to the lack of combustion engine vehicles on the road and airplanes in the skies.
In line with the above, a whopping 58% of renters plan to buy an EV within the next five years, and currently, 80% of EV owners charge their vehicles at home. This dynamic means that EV charging at multifamily properties is no longer just a nice-to-have; it is a necessity. 70% of these EV drivers are college-educated, make over $75,000 per year, and according to Harvard’s Joint Center on Housing Studies, high-income renters are growing. In 2017, a record 19 percent of six-figure Americans rented. In 2019, nearly 10% of renters had an annual household income of greater than $120,000.
“As rental rates continue to climb and renters of all incomes are faced with paying more, they will expect more. Renters will want convenient amenities that make their lives easier and support their interests and lifestyles. Competition for new tenants is fierce today, and multifamily operators have to one-up their competition,” Lauren Immel, RE/MAX residential specialist, contends.
According to the National Multifamily Housing Council (NMHC), renters will need 4.6 million new rental units in the U.S. by 2030, and technology and service amenities top the list of tenant desires.
Challenging times present new opportunities. Multifamily operators must find novel ways of attracting and retaining new tenants. While they can offer numerous amenity options, such as gyms, pools, activity centers, and parks, technology connected to EV charging is now in demand. More and more people are driving electric vehicles, and there will come a day in the not-so-distant future where most everyone will drive them. If operators don’t offer the amenity, tenants may be forced to look elsewhere.
Tenants are also willing to pay a premium for these new, improved, and convenient amenities making EV charging a zero-cost investment with upside.
“We have been keeping a close eye on the rapid evolution of the EV industry over the past several years and a handful of our existing assets already include EV charging stations. With that said, over the past 18 months it has become clearer than ever the importance of continuing to offer this amenity to tenants, and to expand the number of properties at which we offer EV charging stations. We currently have two developments underway that will offer EV charging stations and we continue to look for ways to incorporate this amenity into more assets in our portfolio,” Courtney Crowder, Managing Director of Investments at Grand Peaks Properties, Inc., explains.
With more people working and shopping from home, charging where a person lives is sometimes the only opportunity to fully charge a vehicle without intentionally driving somewhere and waiting. EV charging amenities is a key strategy to attract and retain tenants.
“As the number of EV drivers continues to accelerate, tenants that live in apartment complexes, attached dwellings, and high-density buildings will need to charge at work and home. We are seeing strong demand for charging infrastructures at most multifamily properties. Existing operators are installing charging sites, and new developers are planning for them. Today is a business-defining moment for multifamily operators. Those who meet the needs of tenants will win, and those who don’t will lose. EV charging offers a competitive advantage now and will be an absolute necessity in the near future,” Bill Sanchez, Go-Station’s Head of Business Development, concludes.
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