What is a Multifamily Housing?
Around One-third of the United States rental housing market consists of multifamily units. The US Multifamily housing as we understand it today, is a well-established housing concept. It has grown rapidly and gained major ground in the rental housing market over the last three decades. Here, we will take a look at 3 lessons we can learn from US Multifamily housing.
The UK Build to Rent market is referred to as multifamily in the United States and across Europe. However, the BTR Sector is still in its infancy stage. With the US Multifamily being a more advanced sector, there are subtle differences between the two. These subtle differences could be beneficial to the planning and growth of the BTR sector in the UK.
In terms of design, we can define Multifamily housing as a building that contains more than one dwelling unit. With multiple units’ side by side or stacked on top one another, in forms of apartment buildings, condos, townhouses, and duplexes all of which are examples of multifamily housing options.
The Growth of the US Multifamily Market
The Multifamily market has been maturing for about 30 years. During this period there has been a noticeable paradigm shift in the housing lifestyles of Americans. Nowadays, renting is viewed as a lifestyle choice i.e. Americans are actively choosing to rent rather than buy.
This is made evident as over 250,000 new multifamily units were built in the states in 2017. It was projected by Freddie Mae that Multifamily will grow into a $317 billion sector in 2019.
The Multifamily market has witnessed an influx of investors. They are looking for a reliable and secure form of long-term investment. This rapid growth has led developers and investors to constantly devise new means of attracting and retaining tenants.
Even though the UK is still in its infancy, there is evidence that it’s made a remarkably positive start. We can illustrate this with the UK’s Build to Rent sector recording over £10 billion in investments. According to Savills, the investments in the sector have helped facilitate the construction of over 40,000 Build to Rent units.
Projections show that about 140,000 BTR homes are under construction or in planning. This is a strong sign of the profitability of the Build to Rent development in the UK.
How has Design and Specification Changed Over the Last 25 Year?
The positive reception of multifamily housing in the US is a result of innovative ideas. These designs constantly get an introduction to multifamily homes. The need to provide a stable housing system to cater to the housing deficit has been a key driver for the success in the US. It has since gone beyond just providing housing and basic amenities. Now, it has embraced growth by providing hospitality, usually found in hotels.
In providing tenants with amenities and the ease of having no responsibility for maintenance and management, the US Multifamily has revolutionised the concept of renting. Making it an attractive option for American citizens. Especially, with the enviable locations that multifamily homes are often situated.
By constantly focusing on making the day to day living easier for tenants, multifamily housing has drawn in more of them. Redefining the tenant, renting and living experience.
1. Offer Employment Opportunities with Great Career Progression
At first thought, one may think that working in the multifamily industry is a narrow field with no vertical career progression. In actuality, it is an industry that fosters the growth of its employees to create a loyal employment base.
Multifamily have various facets such as construction and development, finance and acquisition, property management and more. A robust job hierarchy that makes working in a Multifamily a career with prospects.
For example, a UK Graduate scheme can allow someone to start in the business as a maintenance team member or concierge. They can work up to be a regional manager to multiple buildings managed by the same company.
The ability to retain, train and improve the skills of the teams working within multifamily is one of the key elements to the successful growth and a lesson that the UK can learn & benefit from.
2. American Management Companies Capitalising on the Lack of Sector Leadership in the UK
Over the last 3-5 years, we have seen an increase in American management companies interested in the UK BTR sector. These US-based companies are keen on pursuing new opportunities across the pond. They are bringing with them their extensive knowledge, skills, and expertise. This is largely due to the lack of industry leadership in the management sector in the UK.
This is a great opportunity for the UK market to learn from seasoned professionals. Some of them will have experience thrice the length of the existence of the UK. This knowledge could catapult the UK market forward by avoiding early adoption mistakes.
3. Are there Technologies that the UK Build to Rent can Incorporate from the US Multifamily Development?
Technological integration is at the core of US Multifamily innovations. Using improved technological systems for managing and monitoring the development, creates incentives that not only attracts more tenants, but also make the maintenance easier.
Overall, it provides a pivotal win/win for both tenant and landlord. These innovations could be anything from keyless entry to automated air-conditioning to building sensors to notify maintenance issues.
Conclusion:
We all should remember that the US has a plethora of land available. The opportunity to find land for Build to Rent schemes with a far lower land value was more frequently possible in contrast to the UK now.
However, looking at the US Multifamily market is a great way to look at the potential future of how the UK Build to Rent market could develop.
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