2020 went off the rails in so many ways, but the multifamily industry proves to be more adaptable and resilient than ever imagined. We are almost 10 months into the pandemic and resulting economic downturn. It’s been a year for the history books with its unprecedented challenges for the multifamily industry and our residents. However, in this time, a few things have become clear.
Some segments of our industry are dealing with some serious hurdles today, and the outlook remains cloudy, at least in the near term, for the apartment market at large. But the silver lining is that the industry continues to adapt and innovate to meet the demand that is in the market, in every way, shape, and form.
The Threat of COVID-19 Still Looms
NMHC Rent Payment Tracker figures have largely been encouraging given the severity of the economic downturn and rise in unemployment during the pandemic. However, Census Household Pulse Survey data clearly also show that renters, as a whole, are struggling to make ends meet and have precious little financial cushion available to them.
Also concerning, NMHC’s most recent Research Notes found that apartment residents are more likely to work in service sector industries such as tourism and hospitality, which have been some of the hardest hit during the pandemic. The more stubborn the pandemic, the greater the risk to our residents economically.
Throughout the last several months, there has been concern about the pandemic's impact on the industry and its residents. Top priorities of rental assistance, extended unemployment benefits, and an end to ongoing eviction moratoria are top priorities advocated to lawmakers.
Lessons Learned from the Pandemic
While attention is, by necessity, focused on the very real problems confronting the industry in the here and now, there is a very bright future for the industry. Over the coming months and years, integration of the experiences of the pandemic into the ways we do business, operate our communities, and interact with our residents. Here are just a few areas of marked changes:
- Clean is the New Green: The safety and security of residents has long been a top priority, but post-pandemic that will include the health of our communities and residents. Cleaning and sanitization will have increased importance in the day-to-day running of communities, necessitating new procedures, technologies, training, and resources, but also this becoming a requirement from the investment community.
- The New Work-Life Balance Will Impact Community Design: When it comes to community design, expect there will be greater emphasis on floor plan flexibility—especially in common areas and amenity spaces. Moreover, the likely long-term increase in individuals working from home may necessitate changes in unit layout with increased demand for dens or similar spaces that can be used as an office. Demand for reliable internet—already a top priority for residents—will also continue to grow as more and more time is spent online.
- Virtual Touring Is Here to Stay: Services that allow residents to experience a community virtually, whether it be digital or self-guided tours, are here to stay. Prospects will have a greater variety of options to evaluate communities going forward.
- The Urban Core Will Bounce Back: At a more macro level, the industry is clearly experiencing pain in urban cores while there continues to be strong, even growing demand for units in suburban communities. And while this is likely to continue over the short term—especially with projects currently in the pipeline coming online—I am hesitant to decry an “end of cities.” Urban areas have been the job centers that have powered the economy for the better part of the last two decades and will continue to do so following the pandemic.
Looking Ahead to 2021 and Beyond
At the end of the day, remain fervently confident about the health and future of our industry. Believe that because the fundamentals that have delivered so many years of growth remain constant and demand will remain strong.
But optimism goes beyond just economics and demographics. With every passing year, new talent enters the industry—making us more vibrant and dynamic—as well as more and more diverse. No one could have never predicted a year ago that our industry would be mired in the middle of a pandemic and a recession. And so, no prediction of exactly what we will be dealing with a year from now can be made. However, if the last several months have taught us anything, it’s that we should consider ourselves lucky to be in the industry we are, providing homes to millions of families. And, once we weather the current storm, we have much to look forward to.
By Doug Bibby; president of the National Multifamily Housing Council