According to the National Multifamily Housing Council, the United States will need 4.6 million new multifamily units by 2030 in order to keep up with the projected demand. This boom is in spite of concerns from industry leaders about a potential slowdown, thanks in large part to the changes in the demographics of multifamily renters.
Average Income is Increasing
Multifamily living is breaking the previous notion that it is reserved for single people in their early 20s. Not surprisingly, millennials are a disruptor in the housing market — but not in the ways that you might think. Although millennials are at a point in their lives when previous generations have typically made lifestyle changes such as getting married and having children and shifted from being renters to homeowners, millennial’s priorities differ.
According to research, living in multifamily developments longer is allowing for the average income to increase. People who are more established in their careers are renting for extended periods. In fact, in 2017, the number of renters who earn over $100,00 increased by 5% and the number of Americans who make at least six figures and still rent reached the highest number ever at 19%.
Changing Demand and Lifestyle Expectations
With an increase in the average age and income, renters’ expectations for where they live have also changed. Amenities such as dog parks, pools, and clubhouses have become the standard in new construction developments that cater to this demographic.
Increasingly, renters are interested in integrated technologies and conveniences including concierge services, dog walking services, and other platforms that make apartment living an all-encompassing experience. Landlords must now look for ways to satisfy tenants’ interests in community life and making their property the ideal work-live-play destination. For example, having a yoga room is an expected amenity, but to increase the property’s desirability, owners may consider investing in instructors to teach classes regularly.
Generations Driving the Change
While millennials are the largest driver for the recent changes to the industry, they are not the only ones. Baby Boomers are living longer and are increasingly opting for multifamily rentals instead of home ownership. From 2014-2016, renters between the ages of 55-75 grew at an annual rate of 5.4% in small apartment buildings. Some of the most significant reasons for this shift in living arrangements include:
- Desire for convenience
- Ability to live a more active lifestyle
- Flexibility that rentals offer
- Access to amenities
- Maintenance free
- More affordable cost of living
Live Oak Contracting is proud to collaborate with all of our clients to develop multifamily communities that not only meet the needs of the country’s changing demographics but also our personal standards of excellence and integrity. We closely follow market changes, offer valuable insights that guarantee properties are innovative and desirable to today’s renter. To learn more about our services or begin a partnership with our team, contact us today.