By Meghan Hall
In today’s competitive commercial real estate market, property owners and managers are constantly evaluating what amenities will convince tenants to sign on the dotted line—and which perks are largely unused. An expansive survey produced by the National Multifamily Housing Council (NMHC) and Kingsley Associates at the end of 2019 reveals that while there are many glitzy amenities included in competitive markets—pools, lifestyle centers, concierge services and more—basic necessities like WIFI connectivity and accessible property management are among the biggest influencers of where and why tenants choose a property as their new home.
“There are not very many resources that can get this level of insight from actual renters living in provisional-grade apartment communities,” explained Sarah Yaussi, vice president of business strategy at NMHC, which is based in Washington, D.C. “That said, we had almost 373,000 apartment renters respond to the survey this year. That makes it absolutely the largest survey out there that is fully focused on multifamily residents. The report is really a cradle to grave look at the residential [renting] experience: why people are renting, what features they want in their apartment, what amenities they enjoy; it really is that wide of a spectrum.”
NMHC and Kingsley Associates began the survey back in 2013 in an effort to provide apartment owners, managers, developers, as well as architects, financial institutions and others in-depth data on tenant preferences and trends. The biennial survey is web-based; results for the most recent report were conducted in June of 2019. According to NMHC’s website, surveys were distributed to 1.5 million residents across more than 5,000 properties professionally owned and managed by more than 30 multifamily firms. Yaussi estimates that the most recent report had 100,000 more responses than its 2017 counterpart. This year, data was collected from more than 270 markets.
The biggest topics discussed in the report were consistent with many emerging multifamily trends today: short-term rentals, the inclusion of coworking space as an amenity, the introduction of co-living to the national multifamily market, and desired amenities, among others. For example, the report found that for the most part, tenants remain reserved when it comes to co-living, although younger tenants were more amenable to the idea of pursuing a co-living situation. NMHC notes that, for now, however, co-living remains very much an emerging trend, with almost 69 percent of respondents replying that they were not interested in co-living as a living arrangement.
“This was the first time we asked about co-living,” said Yaussi. “We do see there is a ton of investment in co-living companies and platforms, but it still clear from the data this is a relatively new concept. We don’t see a huge interest in it right now, but we would expect that might change. [The survey] does give a sense of where the market baseline is.”
NMHC also notes that younger tenants are also much more likely to embrace short-term rentals within their communities when compared with older residents. Nationally, 60 percent of survey respondents said short-term rentals in a community would either positively impact or have no influence on their perception of a community. On the other side of the spectrum, 16 percent noted they would not rent in an apartment community that allowed short-term rentals.
“The view of short-term rentals is really reflective of age,” said Yaussi. “We can see that older residents felt much more negatively than younger residents.”
Additionally, while more and more developers are investing in coworking spaces within new communities, many respondents felt that a coworking space within their community was not a top priority. 42 percent of respondents said they telecommuted at least part time, but just 15 percent said they either h ad or would use a coworking space.
Perhaps even more surprisingly, 42 percent of respondents noted that they rarely or never use the fitness center included in their community.
Based on the survey results, it turns out that two of the top items that renters look for when deciding where to live have long been considered basics in the multifamily realm: cellular connectivity and responsive and accessible property management. The second most cited reason residents noted for moving was the pursuit of better management, the survey states. Additionally, 51 percent of residents expect management to reply to online reviews of the property. Yaussi notes that improvement of property management services is at the top of many owners’ list of to-dos.
“In terms of trends—at least from the property manager/owner perspective—in general they are looking for ways for technology to enhance not only the management, but the resident experience,” Yaussi said. “Many operators are looking at the leasing process, for example, and the big question is are there tech solutions that can make that a more seamless experience.”
Yaussi added that many operators are looking into self-guided tours and digital leasing agents. However, for many tenants, direct interaction with leasing personnel and property management continues to be key. Two-thirds of respondents still preferred to tour properties with a leasing agent, and just 14 percent would rent without seeing an apartment in person.
However, perhaps the biggest standard for tenants was technology, specifically WIFI and cellular connectivity. 91.2 percent of those surveyed noted that reliable cell reception is important. 44 percent of residents won’t rent an apartment without reliable cellular reception, while 47 percent of potential tenants will check cellular and WIFI connection on walkthroughs. In tech-heavy metros, such as San Francisco, that number is more than 50 percent.
“We see that having reliable cell service in the apartment is really important; it is one of the top-rated features or amenities that [tenants] show interest in,” stated Yaussi. “It is a qualifying factor in their search and touring process…Internet is a utility now; it is not even negotiable, really. And we are seeing a big shift in how many people are simply streaming, who are just cord cutters.”
Moving forward, accessible management and connectivity are likely to remain top considerations for renters, with increases in technology following closely behind. As markets continue to evolve, co-living and co-working within communities can also become more popular as demographics shift towards younger renters in the coming years. As these trends mature, developers and property owners are likely to follow suit in an effort to maximize returns and maintain low vacancy rates.
