by Regan Hartley
One of the biggest challenges for multifamily operators is keeping up with renter preferences, which can seem to change daily. Owners and developers must continually re-assess the design and use of spaces and amenities to remain competitive.
It’s rare for owner/operators to get a solid glimpse into the desired amenities of future residents. However, when it comes to electric vehicle (EV) charging, no crystal ball is required. Consumers, the automobile industry and the federal government have left no doubt that EVs are the future of American transportation.
This foresight puts multifamily developers in a unique position to prepare now, installing an adequate number of chargers to meet today’s demands, as well future-proof their portfolio as EV sales and adoption continues to skyrocket.
The Rental Market and Vehicle Ownership
For years, multifamily rental demand has surpassed supply and any deviation from that is unlikely to occur as younger generations still face difficulties entering the home-buying market. There’s also an increasing number of renters-by-choice, who contribute to the strength of the multifamily sector. The industry will need to contribute more than 300,000 units across the country annually to match demand.
In the United States, more than 40 million people live in apartment properties with five or more units, and close to two-thirds of them are under the age of 35. Of those, 71% of multifamily renters own one or two vehicles, according to a recent study by the National Multifamily Housing Council.
New sales of EVs began to see significant growth beginning in 2011, setting sales records every year until 2018 when they topped the 300,000 mark for the first time. The next two years saw a slight leveling off in purchases due in part to COVID but still remained above the 300,000 mark each year, according to figures from the U.S. Department of Energy.
Thanks to a combination of market forces and changes in consumer attitudes, sales of EVs experienced an astronomical rise in 2021, breaking the 600,000 mark for the first time ever. Final figures for 2022 won’t be available for a few months, but numbers from the first three quarters show the country on pace to surpass 900,000 and move very close to the 1,000,000 mark. Additionally, sales of EVs have surpassed 5.5% of total new vehicle sales, which is considered the tipping point of moving from adoption to acceptance. Auto manufacturers continue to introduce new EV and plug-in hybrid models or add those features to existing models. There are currently 91 EV and PHEV models available in the United States with that number is expected to climb to around 220 models by 2030. A recent survey showed that more than 35% of respondents would consider an EV or PHEV for their next purchase. And all of these figures don’t include the secondary market, which will also increase as current EV owners trade their current vehicles for newer models.
Like many “perks” that used to set apartment communities apart, EV is now firmly here to stay and is quickly joining the group of must-have amenities like air conditioning and in-unit washers/dryers.
The confluence of increased multifamily housing demand and rising EV sales places an urgency on the multifamily industry to provide adequate charging solutions to residents now, as well as begin future-proofing their communities for the inevitable surge in need. The focus needs to be on true upgrades and not a “Band-Aid” approach to the issue.
Establishing the National EV Infrastructure
The increased environmental consciousness of consumers has made EVs a mainstay of personal transportation. Federal and local governments have also renewed their push for growth in this sector. In mid-September, the Biden administration announced the approval and distribution of funds to 35 states as part of its goal to build a nationwide network of more than 500,000 EV chargers. In fact, every state has applied for funds to help construct the network. The latest infrastructure bill also includes financial incentives for multifamily, hospitality and retail to add to charging stations. On top of the infrastructure bill, the current administration began offering tax credits for EV purchases as part of the inflation reduction act.
Earlier this year, government officials in California issued a mandate that all passenger vehicles and light trucks sold in the state must be EV or PHEV by 2035. This proclamation is significant because when it comes to environmental issues, as California goes, so goes the nation. It’s not unrealistic to project that an extensive number of states and metropolitan regions will require the same over the next decade. New York has already followed suit and implemented the same rules as California.
Meeting Demand and Preparing for the Future
Factoring in the increasing interest in sales, the increase in regulatory requirements and the expansion of some incentives for buyers of EVs and the construction of charging stations, it’s the perfect moment for multifamily to seize the opportunity to install EV charging stations. Not only can operators provide for their current residents who are EV owners, but also begin the process of future-proofing properties as chargers have morphed from a nice-to-have to being a must-have.
Playing catch-up is never the optimal approach toward the addition of any necessity.
Installation and future-proofing require investment from owner/operators. Costs for EV charging stations will vary depending on the requirements of the property, the level of infrastructure improvements or construction needed and the types of chargers desired:
- On average, the installation cost can range from $3,500-$4,500 per charger
- On average, installation time runs from 4-6 months
- Major considerations include:
- Capital expenditure
- Installation timeline
- Uptime & reliability metrics
- Pricing strategy for electricity usage
- Types of chargers include:
- Level 1 – Standard outlet (no smart functions)
- Level 2 – Residential/Commercial
- Level 3 – DCFC – Commercial
- Property-specific considerations for smart charging:
- Future-proofing: Installation levels and economies of scale
- Philosophy: Dedicated EV charging spaces vs. shared spaces
- Cost: Location and proximity in garages, parking decks and lots
- Uptime: cellular / WiFi (low reliability) vs Ethernet / hard wiring (medium-high) vs self-reliant computing (high)
- Smart Functions (payment, load sharing, access, OTA updates): Central network dependent (Central server dependent with IT infrastructure required for smart functions to work) vs. Distributed self-reliant network (No IT required, Smart functions operate without external dependence)
While this may seem daunting, it’s important to explore options for EV charging providers and find one that will work with a company to evaluate each community’s specific needs now and for the future. Select an EV provider that establishes partnerships that are mutually beneficial and grows alongside the property’s EV community, not just a company looking to sell some chargers and be done.
Many of the 20 million multifamily properties will be looking to have EV charging stations installed, which means heavier competition for supply. Installation of charging stations requires an evaluation of existing infrastructure and plans for improvements if needed. Finally, there is the cost. Waiting means paying more as demand for labor and materials in this industry skyrockets.
By addressing installation and future-proofing today, communities will have an advantage over the owner/operators that chose to wait. With the assured growth in EV ownership, those who didn’t plan will scramble as they watch prospective residents take their business to the communities that did it right the first time. Multifamily needs to find the right balance to accommodate current EV owners and new owners entering the market, as well as adequately prepare for the corresponding power and connectivity needs.