HOUSTON – (By Dale King, Realty News Report) – “We live in an age of disruption, and the multifamily industry, historically slow to adapt to change, is especially at risk.”
A new report from the National Multifamily Housing Council (NMHC) delivers a stark assessment of the challenges facing the apartment sector.
The council’s research estimates that 4.6 million new rental units will be required nationwide by 2030 to meet rising demand.
Broken down by region, metro area and district, the report says Houston alone must add roughly 214,000 rental housing units over the next 12 years to accommodate population growth and an increasing tendency to rent.
“The multifamily industry needs to catch up with revolutions already underway across transportation, retail, demographics and psychographics,” said Rick Haughey, NMHC’s vice president for Industry Technology Initiatives.
“With a population that is aging and becoming more diverse—and with household compositions changing—now is the time for our industry to adapt and build to meet future needs.”
NMHC recently released its 2018 Consumer Housing Insights Survey together with an in-depth trends study titled “Disruption: How Demographics, Psychographics and Technology are Bringing Multifamily to the Brink of a Design Revolution.” The extensive report is available online and includes visualizations and scenarios that illustrate how the industry might respond to coming waves of change.
In collaboration with KTGY Architecture + Planning, the council produced a series of computer-generated videos to bring these scenarios to life. The research and renderings emphasize that developers, investors, property managers and architects must respond to renters’ shifting demographics, preferences and psychographics—people’s attitudes, aspirations and lifestyles—to reach the unprecedented levels of apartment construction the study projects.
The report estimates the United States will need to build an average of 324,000 new apartment homes per year to keep pace with demand. By comparison, the industry averaged about 225,000 completions annually from 2011 to 2016.
Several factors complicate these projections. Consumer tastes will evolve over the next decade, and the population’s composition will shift as baby boomers age, millennials grow into older age groups and new immigrants arrive. Regions will change at different rates and in different ways, and local zoning, planning and construction regulations will either accelerate or impede apartment growth.
According to the report, Houston currently has about 1.3 million apartment residents living in roughly 552,000 units. That resident population contributes approximately $22.6 billion to the region’s economy and supports around 218,700 jobs.
Statewide, Texas is home to about 3.8 million apartment residents in nearly two million units, generating an estimated $76.2 billion in economic activity and supporting approximately 722,600 jobs.
The NMHC’s 2018 consumer survey finds that renters increasingly demand flexibility, personalization, healthy-living features, convenience and strong connectivity in their homes.
On personalization and flexible living, most respondents emphasized adaptability: 83% said it is important to have a space that evolves through different life stages, while 78% said it is important to have a space that can transform to meet varying needs.
The NMHC surveyed 1,000 adults with a focus on renters and millennials. Key findings include:
- Many Americans struggle to define the “apartment of the future,” instead favoring practical improvements to current services and amenities.
- Reliable cellular service and high-speed internet are now essentials for modern apartments and other housing options.
- Renters want more accessible amenities: better appliances, in-unit washer/dryers and community features such as outdoor spaces and fitness centers.
- Millennials are more likely than older cohorts to view rental apartments as innovative, to support a broader community role for apartments, and to believe communities are stronger when rental apartments and single-family homes coexist.
- Millennials show stronger social tendencies and an attachment to urban centers; they attend live events more frequently but still value face-to-face interaction.
- About two-thirds (63%) said their lives are so hectic they actively seek ways to simplify daily routines.
- Approximately 94% said the ability to personalize their living space is important.
- Forty percent of respondents indicated they plan to telecommute more in the future.
- Sixty percent said their home reflects their personal identity.
To help stakeholders envision the apartment of tomorrow, NMHC and KTGY developed eight videos showcasing potential future living spaces. Concepts include movable walls, interactive fitness and wellness features, and on-site fabrication tools such as 3D printers. These videos and the full Disruption report provide practical design ideas for developers, property managers, investors and architects planning for demographic and technological shifts.