New technologies, evolving demographics and changing consumer preferences have upended every real estate sector but one-multifamily. However, data and trends from a new NMHC report released at the 2018 NMHC Annual Meeting show it’s only a matter of time before the apartment industry follows.
“Things are changing rapidly, and, if we do not adapt this mentality of possible is now possible, then I think we will be left behind,” said Toby Bozzuto, president and CEO of The Bozzuto Group, at a leadership panel discussion on industry disruption at the conference. Other panel participants included Karen Hollinger, vice president of corporate initiatives at AvalonBay Communities, and Rohit Anand, a principal at KTGY Architecture + Planning.
The industry will need to build 4.6 million new apartments by 2030 to keep up with demand. Those new apartment homes will have to serve a population that will be older, more diverse and feature smaller households than previous generations.
Meeting the needs of future residents will require new thinking across every aspect of the industry. To help multifamily stay ahead of change, NMHC partnered with KTGY Architecture + Planning to visualize concepts on how apartment development and design could adapt in the face of rapidly evolving technology.
“We were tasked with looking ten years ahead, but if you look back, ten years ago we did not have [Google] Chrome, AirBnb, Spotify, Uber, Whatsapp, Venmo, online crowdfunding,” said Anand.
Central to the next generation of apartment living is the movement away from the commoditization of four walls and a ceiling to creating experiences for residents, whether it’s a hologram T-Rex in a fitness center or an in-unit 3D printer. Personalization, flexibility and adaptability will also be important going forward.
“What we’re seeing is a shift in our industry from being a producer of a ‘fixed good’, a producer of ‘things’ to a provider of a service,” said Bozzuto.
Inspiration for tomorrow’s apartment must also come from outside of the industry as well as within.
“I think we look to every industry,” said AvalonBay’s Hollinger. “Travel is interesting. They’re not selling the actual flights. They’re selling the experience, and then they partner with lots of different vendors for the actual service, the flight, the hotel, the food. They’re selling an experience that’s a conglomerate of other companies, but yet you still find trust in that.”
“I think we would be doing a tremendous disservice to ourselves if we looked only at each other in this room, for ideas that would become extremely underivative and unoriginal,” said Bozzuto.
Learn more about industry disruption and view the new concept apartments at www.nmhc.org/disruption.