Different economic, demographic and cultural shifts, as well as new political policies, are influencing new trends for the 2017 affordable housing marketing. According to Census Construction Data, the share of new multi-family units built for rental purposes was more than 92% over the last two years; thus, 2017 affordable housing trends are reflective of increased rental demand. The rising prices of homes are afflicting the market while incomes stay stagnant and the supply of multi-family units remain limited.
The United States is facing a significant challenge when it comes to affordability of these multi-family units. While homeownership remains an important goal people strive to achieve, renting is gaining popularity among all age groups and cultural backgrounds. According to the National Multi-family Housing Council, approximately 30% of apartment households spend more than 50% of their incomes on housing. Consider these popular trends for developers and owners of multi-family affordable housing for 2017.
With an increase in appeal for an urban lifestyle and the increase of employment in the city, developers and owners are discovering great opportunities in the surrounding suburbs of popular cities such as New York City. Millennials are renting properties somewhat longer than prior generations and consider renting an affordable way to remain in close proximity to the urban core. Renters are seeking the same feel of an urban center, so it is important that units are within a 20-minute distance to public services such as transportation.
The strong sense of community and desire to live near like-minded people also increases the desire to rent a multi-family unit. The appeal in urban life has led people to seek affordable options in close proximity to major cities rather than pay more than 50% of their wages on rent within the city. New apartment constructions in metro areas will increase significantly as real estate experts are expecting the completion of approximately 363,000 units in 2017, which is a huge increase from 289,000 built in 2016.
Building Affordable Multi-Unit Properties
Most housing options attract deep-pocketed customers looking for luxury developments and amenities to match; however, these prices are unaffordable to the middle class seeking rental opportunities. Most high-rise buildings include high-end amenities such as infinity pools and upgraded common area designs. However, some developers strive to lower operating costs in order to attract prospective renters in a more fragile financial state. By designing smaller units with energy-saving features, spaces are more affordable with attractive locations and multi-functional abilities. Adopting micro-apartments can pay off as they are affordable and serve millennials who are flexible and open to different residences.
Offering Luxurious Amenities at Affordable Prices
Tenants are looking for properties with amenities, which provides luxurious living at an affordable price to remain attractive to renters. Owners of multi-family units expect that the development is up to date with current technology and offers practical amenities. As telecommuting increases within the workforce, it is important that developers facilitate work life by providing fast wireless connection, iCafés, USB ports and more web-access features.
Contractors should also consider including dry cleaning services, lofts with offices, bike-racks and pet friendly areas; all which are popular among tenants. The competition for amenities in multi-family properties calls for developers to expand multi-family units to include tenants’ work, social and lifestyle needs.
Sustainable developments create less energy consumption, more affordable living and are highly attractive spaces to own and rent. Many owners and tenants are seeking sustainable living through green buildings. Developers should consider providing features such as wood-framed buildings, LEED platinum, floor to ceiling windows, solar panels and bike storage to help cut down operating costs. Building owners can also offer green leases as incentives for tenants to use public transportation and recycle. In addition, common areas need to include hydration stations to dispense purified water. Meanwhile, plastic flooring from recycled materials and zinc cladding are long lasting, green-friendly building options.
Develop or Own Affordable Multi-family Housing
There’s no doubt that the demand for multi-family housing, especially renting, is exceeding the supply in 2017. Although affordable multi-family units are currently difficult to find, most middle class families seek these properties. To develop or purchase an attractive multi-family unit this year, consider cost-effective and sustainable units that fulfill all aspects of urban living while attracting all types of demographics. Hunt Mortgage Group offers a broad range of financing solutions to multi-family owners and developers, and provides valued relationships with large property management and developers. Contact Hunt Mortgage Group today for more information about multi-family property loans.