The multifamily industry is going all out to entice renters with cutting-edge homes embellished with the latest smart-home technology, stylish interiors, and lifestyle-enhancing amenities.

But the million-dollar question is: Are renters ready and willing to pay for such upgrades? The unequivocal answer is no. In today’s pricey market, they don’t want any additional increase in their rents. This is the central conclusion of the most-recent MFE–J Turner Research study, which garnered 84,924 responses nationwide.

Residents are definitively price conscious, and given the pace of rent growth over the past three years, who can blame them? But, of course, there are exceptions to that rule.

Upgrades for which some residents are willing to pull their purse strings include 24/7 package lockers, fitness classes, steam rooms, walking trails, and a gated community. The verdict is almost evenly divided when it comes to shelling out money for hardwood floors and large closets, however.

As Multifamily Executive’s Concept Community data partner for the fifth consecutive year, J Turner Research undertook an extensive national research project. Titled “The Next-Gen Apartment: What Renters Want,” the study focuses on the technology, lifestyle, and interior upgrades and amenities desired by residents. Nationwide, 84,924 residents living across 1,555 communities representing 26 apartment companies responded to the survey, the highest participation level ever for a Concept Community study.

As expected, the majority (59%) of respondents were millennials (18 to 34 years), followed by Gen Xers (35 to 50), at 25%; baby boomers (51 to 70 years), at 14%; and the Silent Generation (71 years and above), at 1%. (An additional 1% chose not to specify.)

The study takes a deep dive into common-area and smart-home upgrades. Some of the topics addressed include the hot-button issue of short-term rentals, as well as the latest health and fitness amenities, electronic-vehicle–charging stations, bike sharing trends, and the apartment interior features that renters most desire.

Package Delivery: Yes, Please!

The meteoric rise of online shopping is evident from the survey results, with 62% of respondents receiving two or more packages a month at home.

First, we asked tenants how many packages they receive in a typical month (a figure that no doubt rises during December’s holiday season). A large majority (88%) said they receive one or more packages a month, on average. Nearly 41% of respondents receive two to four packages a month, while almost 17% said they get five to 10 packages a month. Another 4% indicated receiving more than 10 a month. This equates to 876 packages at a typical 300-unit property.

As owners and managers struggle to keep up with that volume—or simply allow drop-offs at individual doorsteps—27.24% of those polled (or more than 22,800 renters) indicated they personally have experienced problems and/or inefficiencies with receiving packages at their communities.

To streamline package delivery to units, 48% of residents gave their consent to in-unit delivery by on-site staff. Meanwhile, nearly one-third (31%) of respondents said they’d be willing to pay a minimum fee of $5 per month for a 24/7 accessible package locker.

Airbnb: 'My Home Is Not a Hotel'

The hot topic of services like short-term rental outfit Airbnb received a lukewarm response from survey respondents.

One-fourth (25%) answered “definitely not” to living at a community that allows residents to rent out their units for a day or a week, similar to the Airbnb model. Additionally, 21% of respondents are “less willing” to rent at such communities, while another 18% expressed ambiguity, saying they’d be “somewhat willing.” All told, more than 64% of all renters expressed a degree of negativity regarding short-term rentals.

This perception is somewhat balanced by the 25% of respondents who said the presence of short-term rentals isn’t a factor in their decision of where to rent, while 11% said they’re more willing to rent at communities that allow short-term rentals.

Across the generations, 18% of millennials, 31% of Gen Xers, 40% of baby boomers, and 47% of the Silent Generation weighed in with “definitely not” to renting at a community that permits short-term rentals. Millennials are more likely to accept the idea of temporary neighbors.

Said one resident: “Please don’t allow people to rent out their apartment temporarily. The people that live here are sufficiently disrespectful of the property as it is. My ‘home’ is not a hotel.”

Electric Vehicles: Not in the Near Future

Bloomberg forecasts that electric vehicles (EVs) will represent 35% of global new-car sales by 2040. But in the near term, the outlook for them isn’t quite so robust.

Our study highlights that just 15% of residents plan on buying an EV in the next five years.

Of this 15%, more than half (58%) are willing to pay for a charging station on-site. The vast majority (85%) of residents have no plans to buy an EV in the next five years.

Health and Fitness: Steam It Up

Newly constructed communities often boast a rich menu of health and fitness amenities to attract a diversity of demographics. While many renters just expect a fitness center to be included in their community, according to our data there are a few fitness features for which renters are willing to pay extra.

Offerings for which respondents would be willing to pay a minimum of $5 a month include fitness instruction, such as Zumba classes (46% of respondents); steam rooms (43%); track/walking trails (42%); and fitness machines with individually tailored connectivity and Bluetooth options (38%).

Common-Area Amenities: On-Demand Is Big

With the increasing demand for music and video streaming, it’s no surprise that residents are in favor of upgrades that support this feature.

More than half (56%) of our respondents said they’d use a Bluetooth-connected speaker in common areas such as pools, picnic tables, and grilling areas at least once a month.
Close to half (47%) of residents said they’d use a high-definition theater room where they could plug in their mobile devices for viewing at least once a month. Not ready to let the weather play spoilsport, 55% said they’d use a weather-sealed, exterior, high-definition screen on a rooftop or pool area a minimum of once a month.

Price Elasticity and Design Options

To help developers assess the opportunity to increase rent for different interior upgrades, we provided respondents with a stock rent increase for certain interior features.

During the survey period, we adjusted the price of a feature to determine how the price revision would affect renters’ responses. (The builders and experts on the Concept Community panel determined this rent increase.)

For instance, residents were given the option to choose between carpeted living-area floors and hardwood floors for an additional $75 a month in rent. More than half of our respondents (51%) opted for the standard carpeted floors, and 49% chose the hardwood floors at the $75 price bracket.

The hardwood-floor percentage dropped to 46% when the price was increased to $100.

The choice between regular closets (4 feet by 6 feet) or large closets (10 feet by 6 feet) for an additional $75 drew the same response: Slightly more than half (51%) chose regular-sized closets, and 49% went for the larger closets. The large-closet percentage dropped to 45% with a $25 price increase to $100.

As observed in our 2015 Concept Community study, safety is a paramount concern for residents. Mirroring this, when asked to select between a drive-through community and a gated community for an additional $25, the majority (54%) of residents opted for a gated community. This number dropped to 49% when the price of a gated community was increased by $50 per month.

The choice between an electric cooktop and a gas cooktop for an additional $15 was more decisive. More than half (57%) of the respondents voted for an electric cooktop, as opposed to 43% for the added-fee gas cooktop.

In sum, while testing the price elasticity of a design option, a $25 price increase in a feature resulted in a 4% decline in preference, and vice versa. Hence, overall, residents are unwilling to pay for upgrades. As expressed by one respondent, “Many of these items are one-time costs. I don’t want to pay for them year after year.”

Money-Saving Smart-Home Technology

With smart-home technology on the upswing, residents across the generations most desire amenities that will save them money. Ranked in order of preference, these include free Wi-Fi connectivity, smart thermostats, and Energy Star kitchen appliances. Next are features that offer convenience—keyless electronic front entry, built-in USB charging ports, in-unit motion-detection cameras, and motion-sensor lighting.

In Their Own Words

Respondents also shared a warning for multifamily companies—it’s not enough to add amenities, they said; operators need to make sure the amenities are functional the majority of the time.

The renters stressed the importance of focusing on “basic services like competent leasing-office staff and interior maintenance—everything else is window dressing to attract new tenants, not existing residents,” said one.

Two other themes that consistently featured in the residents’ comments were the need for better soundproofing and amenities for families with children, such as playgrounds.

One survey participant put it this way: “Never forget about families with children. There needs to be a place for children to gather. A game room in the clubhouse and/or playgrounds and basketball courts on the property [and] bike trails, or somewhere to ride their skateboards. When the kids are happy, the parents are happy. We are the ones paying the bills.”

Further insights from “The Next-Gen Apartment” study will inform management companies and developers about the technology, lifestyle, and interiors expectations of today’s—and tomorrow’s—renters. Detailed survey results will be unveiled at the 2016 Multifamily Executive Conference next month.