HOT & RELEVANT TOPICS
The Benefits of Vertical Integration
When an apartment owner launches its own property management or construction division, the benefits can be tremendous. Self-managing can make communities run much more efficiently, while in-house construction teams can save significant amounts of time and money. But owners must vertically integrate for the right reasons. If their focus is on, for example, using their vertical integration just to help them raise big money from investors, they could be headed for trouble.
Proptech: ‘Fees’ Is Not a Four-Letter Word
When multifamily companies explore the idea of adopting new proptech, the costs associated with the product cause many to hesitate on implementation. But what if the company itself didn’t have to absorb the costs and could easily pass them to renters through monthly fees? Consumers have proven they’re willing to pay monthly fees for convenience, from food delivery to music apps. And multifamily residents are certainly open to paying these fees for services that improve the renter experience, such as third-party package-management services that deliver packages directly to their doors.
Entrata Study Examines American Renter Behavior During Pandemic
Entrata recently conducted its ‘Renters on The Move’ survey and the results are in. Two key takeaways from the survey show that while nearly 22% of renters moved to larger apartments during the pandemic, another 56% are planning to move when the pandemic ends. Renters also indicated that they want more flexibility in their leases, and the amenities that were once considered to be ‘must haves’ are now changing. Furthermore, the survey outlined some reasons why respondents choose to rent over buying a home. While 39% said it is due to the inability to afford a down payment, 33% cited the ongoing expenses associated with owning a home.
IN THE NEWS
Fannie Mae, Freddie Mac Seek to Boost Workforce Housing
In an effort to spur the development of new apartment homes that are affordable to moderate-income households – and to preserve existing ones – Fannie Mae and Freddie Mac are taking a number of steps. Fannie Mae has launched its new Sponsor-Initiated Affordability program, through which communities where at least 20 percent of the apartments are affordable to households earning up to 80 percent of the area median income can obtain loans with lower interest rates. According to Wealth Management Real Estate, the rates can be up to 30 basis points lower than those on comparable loans for market-rate properties. Freddie Mac is also offering cheaper financing to properties that are affordable to moderate-income residents through its Social Investment Commitment program.
The Outlook of Apartment Developers Is Improving
The sentiment of multifamily builders and developers has reached its highest mark in seven quarters, according to the National Association of Home Builders. NAHB’s Multifamily Production Index, which measures how builders and developers feel about the current apartment and condominium markets on a scale of 0 to 100, reached 51 in the first quarter of 2021. That marks the first time the MPI has been over 50 since the second quarter of 2019, when it stood at 56.
High-Speed Internet Now a Must for Apartment Communities
The pandemic has had no shortage of effects on the multifamily industry. One of its most lasting ones may be that many tech amenities that were considered “nice to have” in the past have become “must have.” That was the viewpoint of panelists at Bisnow’s recent Orange County (Calif.) State of the Market digital event. For instance, with many residents expected to continue working from home even after the pandemic ends, The Irvine Co. is working to make fiber internet the standard across its portfolio, according to Chris Marsh, president of the company’s development division.