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Nov. 19, 2013

What Renters Want: The Amenity Arms Race

By Leah Etling, Contributing Editor

Los Angeles—Gen Y likes rooftop pools, multimedia-equipped fitness suites, concierge package service and the ability to order housekeeping for their apartment. They have dogs, get lots of UPS deliveries but almost no mail, like walking places (but also need to charge their electric vehicles), and want the lobby of their apartment community to look like that of a four-star urban hotel.

Sound high maintenance? It’s a fair assessment.

Last week, a panel of multifamily experts delivered an overview of “What Renters Want: Development + Design Trends that Drive Occupancy,” at an AIA continuing education event held in Los Angeles and sponsored by Multi-Housing News, Interface and Universal Fibers.

Speakers Manny Gonzalez, principal, KTGY Group; Kelly Farrell, vice president, RTKL; and Alan Dibartolomeo, chief development officer, AMF Development Inc. didn’t pull any punches when it came to the wish list of the nation’s largest renter demographic: 20-to-mid-30-somethings.

“Gen Y rents by choice. We’ll see if they continue to rent by choice as they age. But if they keep renting, your rentals will have to be flexible enough in their amenities program to meet their needs in the future and the needs of their kids,” said Farrell, who described the demand for services among today’s typical resident.

They want to be able to order up housekeeping, but not pay for it on a regular schedule, calling for an appointment when they have been too busy to clean or Mom and Dad are coming to visit. Someone should be in the lobby to receive their dry cleaning delivery and accept their packages while they work. Rent should be payable by credit card so they can auto-schedule the payment and forget about it.

The good news is that they’re willing to pay for these conveniences.

“It’s a generation that if they have the money, they want to be served,” said Dibartolomeo, whose firm competed a Glendale project near Americana at Brand and the Glendale Galleria that features a 26,000 square foot rooftop skydeck, replete with a dog park and hot tub.

The only disadvantage of creating such posh living spaces is that residents really do seem to think they’re at a resort.

“They really believe they’re in a hotel. And there’s a downside to that: they think they can barbecue and cook and just walk away and leave it, and somebody will clean it up. Almost everything is ‘somebody else will take care of it,’” Dibartolomeo said.

Describing some of the private student housing communities that have been developed across Southern California, Gonzalez implied that multifamily would likely have to raise the luxury bar to keep up with rising expectations. Does your community’s swimming pool feature a lazy river?  How about a fitness center that rivals the offerings of the neighborhood’s most high-end health club?

“If your community isn’t big enough to do something like this, then don’t even try to do it. Get them a membership to the adjacent club. If you can’t go all the way, don’t just go halfway,” Gonzalez advised. He added, “It’s what I call the amenities arms race. Everything’s getting bigger, how much can we do? All the money seems to be going into the amenities: ‘My pool’s bigger than your pool.’”

A few other trends the panel identified:

  • Black box theaters are out, outdoor theaters—where weather permits–with movable furniture are in.
  • Business centers are out, but universal wireless network coverage and scattered “creative spaces” are in.
  • Printers and a couple of computers on site are still popular for that moment when the household printer is out of ink and you need to print boarding passes for a flight or tomorrow’s homework assignment.
  • Multimedia fitness “suites” where you can do a yoga, pilates or P-90X workout alone or with a few friends are hot.
  • Some new construction doesn’t bother to wire for landline phones. Direct data connections are the alternative.
  • The most important amenity? Five bars. “If you walk in and your phone doesn’t have five bars, you’re walking out,” Gonzalez said.
  • Green isn’t as important as you think, though it may matter to owners, builders and lenders. “The leasing people don’t sell it too hard. They may mention it, but it’s not an amenity that really sells,” Dibartolomeo said.
  • Got an In-and-Out burger nearby? You’re golden. A Whole Foods? High five. Neither? No worries. Settle for a designated food truck parking space and invite local trucks to set up a regular visitation schedule. “It’s a great opportunity for them that costs you absolutely nothing,” Gonzalez noted.
  • Micro units need some kind of separation barrier between living space and sleeping space. It gives the feeling of a one-bedroom unit, even if the entire apartment is less than 500 square feet.
  • Kitchens can be smaller than we’re accustomed to, especially with new reduced-footprint appliances. But entertaining is still important, and expandable spaces to host a larger crowd are requested.
  • Location still matters—a lot. “You’ve got to build it where the rest of the amenities are already provided by the city that’s there,” Dibartolomeo observed.
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