My sister’s apartment is all sorts of tricked-out. She and her roommates share a luxury pad on the top floor of a brand-new Los Angeles mid-rise. The kitchen has stained stone countertops and stainless steel appliances. The walk-in closets are massive. There’s an iPod docking station in every room, custom finishes, a 24/7 doorman, complimentary valet service, and a huge first-floor retail complex that includes a Coffee Bean & Tea Leaf, yoga studio, and doggie day care. Meanwhile, her rent is about 25 percent less than at comparable units in the area. Oh, did I not mention that my sister is a junior at the University of Southern California and this is student housing? Her apartment, which houses four girls, is, frankly, more spacious and luxurious than nearly every residence I’ve ever lived in. When I visited her place last month, there were a dozen friends over just hanging out. The panel TV (complimentary in every apartment) was blaring, the front door was open, music was streaming in from an open door down the hall, and you could hear puppies barking and grills sizzling around the pool in the courtyard below. My first thought: I miss college. My second: I want to live like the college student of today. After all, this was not the USC experience I had. My apartment was cramped and had stained carpets, a stove that seemed permanently infused with the smell of Top Ramen, and a single bathroom shared by five absurdly untidy residents.
As I looked around at my sister and her hipster friends, it suddenly become painfully apparent that they neither understood nor appreciated the quality of the apartment they were living in. When they graduate, they will be in for a big surprise. Good luck finding this kind of luxe living on an entry-level junior salesperson’s salary. Ask my sister, though, and she’s not concerned. She’ll tell you that she fully expects her first “real” apartment to have these same bells and whistles, if not more, simply because it will enable her to prolong her college lifestyle—one that emphasizes social interaction and technology—into her post-graduate years.
But will she be willing to pay for it? Therein lies the conundrum. The student population exiting college the next few years presents a huge opportunity for multifamily developers and renovators targeting the Gen Y demographic. And indeed, many of the new development pipelines that have recently emerged after 18 months of inactivity are purposefully targeting this population. But for many Gen Yers, it will take the help of Mom and Dad to afford these units. It may require doubling up to keep rents down. And in the case of renovations, it might mean losing renewals of longtime residents when rents get pushed past their status quo in hopes of attracting new blood.
I’m not saying that the industry won’t be able to attract this generation of young, social, tech-savvy creatures. I am simply suspicious of the level of awareness our business has of how college students think. Sure, there have been surveys and studies and focus groups conducted on trying to understand their needs and desires, but what will they actually pay for?
What’s more, we need to seriously consider what recently graduated renters will stick with. For my sister’s many talents, she is also extremely fickle. One minute, she loves TOMS shoes; the next, she must own a pair of Sperry Top-Siders. She thinks recycling is a good thing, but she won’t go out of her way to do it. And as for her apartment? When it comes time to renew, I have no idea if she’ll want to stay at her current home or move into the newer student apartments down the street. After all, I hear every resident gets an iPad for moving in.
Makes me wonder if I could pass for a college senior.