The NMHC’s annual OpTech Conference, held in Dallas recently, was buzzing with discussions about the latest tech solutions for resident retention, hot trends in operations, and the future of alternatives like short-term rentals.
So, what’s does the future for housing and the multifamily industry look like?
Smart Home Technologies
The exposition hall was well populated with vendors offering the latest in smart home technologies with offerings going beyond virtual keys and remote thermostats. Operators attending OpTech concurred that “smart apartments” are becoming more and more important to consumers. Furthermore, the integration of smart home technologies is not limited to new upscale developments. Interest and adoption from value-add renovators and operators of middle-income apartments are also rising.
AI is alive and well in the multifamily industry, with AI technologies used to minimize resident credit defaults, identify the best prospects (e.g., those likely to stay longer), customize the resident experience and much more. The OpTech discussions and vendors confirmed that the industry has barely touched the surface of AI potential for the industry.
Especially hot at OpTech were technologies (apps) to handle anything and everything their residents need from the property staff (like lease renewals and package deliveries), and to connect residents with external service providers like dog walkers and house cleaners. The popularity of these systems seem to derive from the residents’ interest in coordinating basic services without intervention of humans. The systems also undoubtedly appeal to owners and managers looking hard at rising operating costs and staffing challenges due to labor shortages.
Ironically, while more/less routine activity may be increasingly handled by technology, OpTech discussions also emphasized that experience and a sense of community are really important to residents. One panelist advised owners and managers to add staff to help create experiences and build a sense of neighborhood (their term). The better the resident experience, the greater the likelihood of residents renewing and telling their friends about the property. It’s positive return on investment.
Are self-guided apartment tours the next best thing since sliced bread? The jury’s out on that. But the high number of vendors with systems to facilitate self-guided tours and the general OpTech buzz suggests self-guided tours will become much more prevalent in the near future.
AR & VR
Perhaps prospective residents don’t even need to visit a property. The latest in AR and VR (augmented realty and virtual reality) technologies were presented at OpTech, creating impressive “wow” moments for conference attendees.
Well represented in the Exposition Hall were vendors with new tech products to improve utility costs. Energy saving devices and technology is clearly making a difference in the industry. Recent analysis conducted by CBRE found that utility expenses among the six largest multifamily REITs are actually trending down. Utilities expenses year-to-date through Q3 dropped about 0.9% from last year. The average year-over-year change in all operating expenses at the REITs was about 2.8%.
The 2020 NMHC/Kingsley Apartment Resident Preferences Report was revealed at the conference. The bi-annual report covers amenity preferences, lease decisions, lifestyle, apartment services, and much more. The data is sliced and diced by metro and by age cohorts. The top three areas of interest for apartment residents are travel, food and fitness. The top unit amenities are central air, soundproof walls and garbage disposals. The top-rated common amenity is cell reception (47% of prospective residents tested cell receptions when touring a community). Telecommuting is high—55% of urban apartment dwellers. Only 15% of all apartment residents surveyed said having co-working space available was a priority amenity. With respect to co-living, the survey found that 23% of 25-year old Dallasites are interested in co-living—a statistic which seems to support the concept!
One of the most intriguing panels focused on “flex rentals” aka short-term rentals (STRs). (Now that the office world has stolen the term “flex space” from the industrial sector, multifamily wants its own flex space concept.) The panel illuminated the different structures of STRs, how to mitigate and indemnify risk and the financial benefits which STRs bring to property owners. The NMHC/Kingsley report found that about 28% of older residents (55+) would not lease in an apartment community with short-term rentals, but only 7% of the under-25-year-olds would be adverse to STRs. One presenter compared STRs to dogs. Banned from most properties not that long ago, dogs are now ubiquitous. STRs are next.
OpTech’s pièce de résistance was KTGY Architecture & Planning’s Park House concept for creating more affordable housing. This concept won them NMHC’s 2019 Innovation Challenge award. The idea? Take an underused parking garage. Cut open the middle section to create a spacious courtyard and bring more light to the housing units. Offsite, build out modular housing units from shipping containers (three containers per apartment) and then lift the units into the parking garage. Sounds crazy? Yes. But take a look at the video at http://ktgy.com/work/park-house/.
By Jeanette Rice, Americas Head of Multifamily Research, CBRE.