From the Summit: Balancing Financial Considerations with Demographic Demands
A Comprehensive Look at Resident Service Packages
Currently, there are 44 million renters in the US. With the recent volatility in the economy, 60% of the US is actually living month-to-month. In an ideal world, renters would have a rent-to-income ratio around 30%, which for many is difficult. This is especially true if you live in more expensive cities like New York, where more than a third of renters pay more than 50% of their gross monthly income in rent, and that’s before you take into account an additional 5-10% of gross monthly income going toward ancillary fees.
The struggle is real for many renters. It’s in this environment where Stephanie Fuhrman from Entrata, Maria Banks, president and CEO of AMLI Management Services, and Laine Gomez, Asset Management leader at Graystar kicked off their conversation about resident services during a breakout session at Entrata Summit 2023.
AMLI primarily services the luxury class A market in most urban areas, while Graystar’s niche is servicing the missing middle. Because the demographic they serve is so different, the companies also take a different approach when it comes to resident services. For AMPLI that means providing a high-level, high touch experience for their residents, including connectivity, smart home access, and sustainability initiatives. On the other side, Greystar’s goal is to provide affordable housing without sacrificing quality and services, including trying to deliver the latest proptech that will enhance the living experience for residents.
What different demographics value most
For middle income renters, what they value most is the value they are getting on their rent and how affordable it is, but it’s more than just the rent. It encompasses everything they’re getting with the rent. What amenities are covered and how does it compare to other properties they could have chosen. Beyond that, they are looking for connectivity, transparency, and a space that allows them to have pets. Greystar consistently asks for resident feedback that are reviewed by regional property managers and the corporate office to identify trends and areas that need improvement.
Luxury renters also place a high value on connectivity. So much so that AMLI prioritizes connectivity in the building of new developments. Connectivity was important prior to the pandemic, but even more so in a post pandemic world where many people are still working from home or working a hybrid schedule. In a survey with residents, AMLI found that more than half of residents ranked connectivity and high speed internet as critical, meaning if the property didn’t have it they wouldn’t live there.
Second, and nearly as important, are the sustainability efforts AMLI is taking to reduce its carbon footprint. All of its new developments are Leeds certified and are educating residents of what the company is doing and what they can do to help the environment. Sustainability efforts have a two-fold benefit. The obvious being the impact they have on the environment, but they also help reduce expenses in the long run according to Banks.
How is legislation impacting the resident services you offer
Properties in California are now required to compost and there are significant fines that can be assessed. Fortunately, composting efforts can be tied back to both organizations goals to be more sustainable. For Greystar, they’re looking for ways to implement composting in a way that doesn’t impact affordability too much for its residents.”Every time one of these mandates comes down the path that just takes a little bit [of that affordability] away,” noted Gomez.
One area where legislation is driving strategy for AMLI is in the types of lighting it installs in new and remodeled units. They are retrofitting old units with LED lighting along with hallways and garages, which not only helps with sustainability efforts, it also reduces energy costs for the property and residents alike.
The importance of communicating the value of resident services
Sometimes it’s hard for residents to differentiate between the property and the utility company, so when these new regulations go into place, the blame is often misplaced on the property. It’s important to make it clear that you’re not trying to nickel and dime them, but as costs increase across the board, the property can’t carry the entire burden of those increases.
While residents often don’t view things like new lighting and composting as a service being offered by the property. If you take the time to explain why you’re doing certain things and how in the long run it benefits the resident, then they won’t be as upset, even if their utilities go up a little.