In this week’s newsletter, we delve into NMHC and Grace Hill’s new renter preferences survey.
The National Multifamily Housing Council (NMHC) and Grace Hill released their 2022 Renter Preferences Survey last week. The report looks at the home features and community amenities that over 200,000 renters prefer, and there are several key takeaways for multifamily owners:
- More single apartment renters: 42% of renters are living alone in 2022, up from 35% in 2020.
- Less face-to-face: 19% of renters prefer a face-to-face lease renewal process, down from 21% in 2020.
- Better amenities: 29% of renters in 2022 are seeking better apartment amenities, compared to 21% in 2020.
- More space: 28% are seeking more living space, up from 19% in 2020.
- Why you rent: The top choices for why people rent was “It offers maintenance-free living” (50%) and “I don’t have to make long-term commitment” (37%)
- Access: 71% of renters are interested in controlled property and amenity access, with 20% citing it as a necessity when considering whether to rent.
- Smart locks: 59% of tenants said they would be interested in keyless smart locks for their apartments.
- Remote work: 25% of survey respondents cited remote work as an influence on their move.
- Cutting the chord: Cable TV subscriptions are down to 28% in 2022, from 43% in 2020.
- Mail packages: 72% of renters people prefer onsite self-serve package pickup, with 76% saying they receive more than 3 packages a month.
- Upsells: The following is a reflection of what renters said they’d be willing to pay more per month for selected amenities:
- $38 for a smart security system
- $37 biometric access on the property
- $36 for keyless smart locks
- $35 video doorbell
- $36 controller property access
- $33 video intercom for property front door
“71% of tenants want controlled property and amenity access, with 20% citing it as a necessity. With smart home technology becoming increasingly popular, multifamily buildings are beginning to execute smart building technology strategies to give their tenants that same experience. Specifically, innovations in controlled access are guiding smart access initiatives across portfolios as demand from tenants increases.” — Saurabh Bajaj, CEO Swiftlane
So What? Renter preferences are changing dramatically. Multifamily owners looking for an edge will change offerings based on consumer behavior such as stronger demand for space, amenities, controlled access, and more. Not only will it reduce vacancies, but will put upward pressure on your NOI based on a willingness to pay more for certain amenities and features.
This Week’s Top Headlines
- Banks appear well-positioned to continue originating new multifamily loans in 2022 despite rising interest rates. — Wealth Management
- Blackstone will spend $1 billion through portfolio company Home Partners of America in rent discounts for tenants who meet certain income thresholds. — Bloomberg
- Culdesac, a car-free community expanding across America, just raised a Series A $30 million funding round. — The Real Deal
- The National Association of Realtors (NAR) hit its highest membership count ever in 2021, with nearly 1.6 million members. This is up almost 7% from 2020, with about 100,000 new realtors joining in 2021. — Inman
- Mortgage rates are on the rise with the 30-year fixed-rate mortgage up 45 basis points in less than a month, averaging now at 3.56%. — Realtor Magazine
- The top cities where renters have grown the most: Fishers, Indiana tops the list. — Forbes
Zillow reports that housing inventory is now at record lows, sitting at 923,000 homes across the entire country, down 11.1% in December. According to Zillow, “Buyers at the end of 2021 were left with 19.5% fewer homes to choose from than they had at the close of 2020 – itself an already thin year for buyers looking for choice. Compared to December 2019, there are now 40.5% fewer homes available for sale.”
The largest annual inventory declines were seen in Miami (-48.0%), Denver (-40.3%), and Raleigh (-39.2%). The largest inventory increase was in Austin (+14.6%).