What "big trends" are driving the multifamily industry? Forget about what's next, this post explores what's here. Now. It's easy to get lost is the minutia of multifamily. We have daily operations to address while planning for next month, next quarter, next year. Following are five trends occurring in our industry that will be taking up more space in your email box and brain in coming years. Notwithstanding the fact that they are occurring as we speak...
1. Technology. Rapid technological advances cannot to be ignored. It's imperative to be a "first adopter" in an attempt to keep pace. When a twelve year old can help Mommy find an apartment on their smart phone we need to be there; on mobile, on-line, with current information and availability.
Tech is part of our daily lives on every level from the food we eat to the units we lease. Technology allows us to "connect" with our customers broadly and specifically. From Living Social to Facebook to PayPal there is no getting around greater forthcoming integration into the multifamily business. Carve out your niche here and own it. Note that this cannot be 100% outsourced. Someone in house must know where all the wires are located.
2. Decrease in family size. From 2000 to 2010 family size has decreased by about one percent. Many would say this is statistically insignificant. But let's translate that number into the increase in households created based on this change.
In 2010 there were approximately 114 million households in the U.S. Therefore, a one percent increase in the number of homes needed (to house the same number of people, but with fewer people per household) equates to a need for an additional 1.1 million homes.
3. Decrease in unit size. SRO (Single Resident Occupancy) and Micro Units are a trend that will only expand. Construction of Micro's provides a completely different perspective on unit count, density and livability. It's a positive when considering transportation districts than allow for greater utilization of existing infrastructure.
Few people give much thought to how much Architects affect our daily lives. They keep us safe with progressive street level designs and keep use healthy with recognition that humans need sunlight. While multifamily developers require continuous value engineering, Architects want to deliver livable space.
4. Increases in Urbanization. Jobs are in the cities- jobs and job growth reside most fully in the urban core. Proximity to jobs and cultural events are in the cities. Suburbia is great if you can afford it, but usually requires individual access to transportation. We fully anticipate continued increases in fuel, insurance and commute times.
5. Multifamily Product Scarcity (Demand). Everyone knows that multifamily construction starts has increased. Will this be enough to meet pending residential construction demand? Considering Item #4 above, the answer is no. Consider also the most recent five years where construction starts were well below delivering just replacement housing (construction of units to "replace" those lost to age, natural disaster and redevelopment).
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