Multifamily Growth Prospects
- Mar 05, 2018
During my 30-plus years with Gables Residential, I’ve seen and been a part of a lot of changes in the industry. Our access to capital, where we invest and develop, the growth and professionalism in third-party management—these are all big areas of positive change for the industry.
However, the industry’s most notable achievement during the span of my career has been the shift in attitudes toward renting. Rather than just being a housing option of last resort, renting is now a desirable housing choice. Apartment living, in particular, has been branded as a lifestyle, where amenities, technology and flexibility offer a better fit for many Americans’ needs and wants. What we had once talked about as an aspiration has become a reality.
I’ve been reflecting on all this as I prepare for the next couple of years and consider the opportunities for the industry to further evolve. In January, I had the honor of stepping into the role of chairwoman for the National Multifamily Housing Council. NMHC has long been the leading multifamily industry organization, providing members with critical business connections, research and insights, and advocacy support.
As the new head of the leadership team, I plan to focus my energies on four areas of growth during my tenure. This is truly an exciting time to be in the apartment business and certainly to be leading an organization of my peers who are helping shape the future of our industry.
Growth Area # 1: Tech Innovation
I was involved in the first wave of innovation in our industry, when things like revenue management, internet listing services and cloud-based property management seemed far beyond our realm. They proved revolutionary, helping the industry become more sophisticated.
Now we’re standing at the brink of a second wave. After overlooking us for years, Silicon Valley has finally realized we’re an industry ripe for technology disruption. Real estate tech firms raised roughly $7.7 billion last year, signaling that another wave of serious innovation is right around the corner.
One area that’s already beginning to see growth is in PropTech. These new building management technologies will change the way we construct our communities, how we transact our deals, how we monitor and manage our buildings, as well as how we interact with our residents. Moreover, virtual reality, block chain and augmented reality are all terms likely to become part of our daily lexicon.
Of course, this rush of venture capital targeted at the commercial real estate sector means we will all be trying to figure out what is real and what is hype, who will be around in 10 years or gone in 12 months.
To be able to leverage this next round of innovation, our industry is going to need to be better informed and engaged. For this reason, I am most excited about NMHC’s new Organizational Innovation Committee, which aims to improve the industry by accelerating innovation and enhancing the customer experience. This group will undoubtedly be an invaluable resource as we navigate this brave new world, and I look forward to supporting its work and initiatives.
Growth Area # 2: Diversity and Inclusion
The #MeToo movement has raised awareness of sexual violence and harassment by highlighting the breadth and impact such acts have on victims, most often women, and calling for greater scrutiny of both systematic abuses and taciturn responses to such exploitations. It also underscores the need for proactive programs to create and support more inclusive workplaces where talent can thrive—and the costs of not doing so.
For this reason, I want to shine a brighter spotlight on NMHC’s Diversity and Inclusion initiative, of which I’m particularly proud. Led by the NMHC Diversity and Inclusion Committee, the strategic initiative is bringing more information and resources to the industry, exploring new and exciting partnerships to help members attract diverse talent and encouraging more meaningful dialogue about how we can build better workplaces.
I look forward to expanding the initiative in the years to come, and finding new ways to support the industry in its efforts to foster inclusive cultures. I encourage all industry leaders to join me at the 2018 NMHC Leadership Forum on Diversity and Inclusion on May 9 in Dallas. More information is available at www.nmhc.org/allmeetings.aspx.
Growth Area # 3: Legislative Priorities
NMHC and our allies secured tremendous victories in the landmark tax legislation signed into law at the end of last year. It’s certainly not where we feared we might end up when the issue was raised; we were having flashbacks to 1986, when sweeping changes to the Tax Code burned the industry badly. And truthfully, I don’t think we could have asked for much more than we achieved in the final legislation.
However, our work here is not done. The size and scope of this tax bill means there will be additional legislation to clarify some of the provisions. NMHC is already working with lawmakers on those clarifications to make sure our victories aren’t undone behind the scenes.
But we face other battles, as well. One very major fight is on housing finance reform. Our industry lives and dies by our access to capital, and any proposal that could cause a disruption or reduce liquidity is concerning.
NMHC has spent years educating lawmakers about both Fannie Mae and Freddie Mac’s successful multifamily operations. As a result, the industry is in a good position for the negotiations, and we are encouraged by the bipartisan legislation under discussion, as it includes many of our key priorities. While Congress remains challenged to break through the gridlock to pass legislation, we’ll be there making our case.
Growth Area # 4: Industry Research
More than 38 million Americans call an apartment home. Yet limited research exists on our industry, which finances, develops and operates those homes—and contributes more than $1 trillion annually to the economy.
As the apartment industry has evolved in size and sophistication, research needs have expanded. Two years ago, we created the NMHC Research Foundation to help address critical voids in apartment data. So far, we’ve raised $3 million to support a research agenda that will help us make better business decisions and improve understanding of the dynamics that fuel our industry.
Our first Research Foundation-sponsored report is due out early this spring and will document the impressive investment returns apartments generate compared to other commercial real estate categories. This data should prove a useful tool to help attract additional capital to our industry.
For all these reasons and more, I am honored and excited to take on the role of NMHC chairwoman. By investing in these priorities, I am confident we can make our next 10 years even more exciting than the last 10 —which, let’s be honest, have been a pretty good ride.
Sue Ansel is president and CEO of Dallas-based Gables Residential. In January, she was elected to serve a two-year term as chairwoman for the National Multifamily Housing Council, the apartment industry’s leading membership organization.
You’ll find more on this topic in the March 2018 issue of MHN.