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It is never easy to predict the future of any industry. However, certain trends are emerging that will greatly affect multifamily developments and not only impact the type of buildings being built but also the people who occupy and service them and the amenities and technology placed in them. 

Affordable Housing

The most prominent trend is the crisis in housing affordability in the United States. Half of all renters currently spend 30 percent of their income on their residence. Twelve million Americans spend more than 50 percent of their income on their place of residence, according to the U.S. Department of Housing and Urban Development. Estimates indicate the United States will require 4.6 million new rental units by the year 2030; obviously, all of these units will be spread throughout different economic sectors of the marketplace. Many should be workforce or low-income housing to alleviate this crisis. 

The need to make homes affordable for the masses will be a large trend in the coming year and thereafter due to the pent-up demand. Development will occur outside the luxury market to accommodate the current affordability crisis. This will happen through the use of micro-units and adaptive reuse in larger markets and through normal, less “amenitized” units in less lucrative development areas outside the hip downtown zones. In turn, builders must sacrifice on some of the amenities to achieve affordability.

P3s

Public-private partnerships (P3) to achieve affordability will take center stage in the coming year to help address the housing crisis. Tax incentives or abatements, tax increment financing districts, public land leases and affordable housing mandates will also play a large role in the years ahead. It will be important for the developer and their team to form a close relationship with the local government and its representatives to keep abreast of the opportunities these incentives bring. 

Customization and Amenities

Customizing buildings and their units to meet the local needs of the property and the rental market it addresses will be more commonplace. Whether these factors are local economics, demographics or regional preferences, the development must speak to the pulse of the area it is addressing in addition to its marketplace and preferences. Due to increased competitiveness, thorough market research will be a necessity for a successful project. This could mean providing surfboard storage lockers and a board waxing and repair room near the beach, or a bicycle repair and cleaning room with wash-off facilities in the mountains near accessible trails. The key is knowing the client and delivering what they really want and need. 

Shared amenity spaces will be considered by more developers as new income streams to assist in the development’s economic success. In this model, the owner allows outside members of the community to use the amenities of their building, such as its gym, for a fee. This can also occur when a developer has multiple buildings in close proximity to each other, whether residential, office or hospitality. This allows for greater use of a fixed asset by the owner’s greater portfolio lessening the expense of amenity operation and construction costs. This may also include purposing the retail for amenity-type usages such as a gym or a pool hall with free usage for tenants but open for public memberships.

Technology

Other trends beyond the economics of the product and its typology will be in technology and its implementation in the apartment marketplace. The smart apartment building will be something seen frequently in the marketplace. This increased use of technology will become present in buildings with more units providing automation to the renters’ lives and the use of their units. This increase in building technology and automation will occur on the building management side as well. This will be seen in the facilities security and building systems management systems. Automation of the tenant’s security access, guest access, electrical lighting and sockets will be an added amenity to the tech-savvy owner and renter. As we have seen automated assistants take their place in our lives, the same type of technology will assist in the automating of units and the buildings containing them. 

Sustainability

There will be a continued and greater focus on sustainability. The environment will continue to be an issue for developers and their tenants. As the world changes due to man's impact on the planet, sustainability will become a vital issue for communities who wish to see environmentally-friendly development take place in their neighborhoods. Codes and regulations in cities and towns will get tougher requiring more environmentally conscious construction, thus costing developers more in the field. Net zero apartment buildings will begin to hit the marketplace to accommodate the demand from renters, hopefully helping stem the environmental impact we have on the planet and providing a new marketing point for these facilities.

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