What does Gen Y want? The wrong answer to that question could cost you millions.
Developers and owners across the country have been scrambling the past few years, trying to uncover innovative ways to attract tech-savvy Gen Y renters. And along the way, tough questions have been raised about which tech amenities renters really care about, and which off er the most bang for the buck.
Is it worth it, for example, to install expensive, eco-friendly thermostats that can be operated from anywhere via smart phone? That's probably too exotic, experts say, because while Gen Y renters want green amenities, they don't want to pay more for them. So, what is working?
The most successful strategies are focused on creative common areas, or what's referred to in community planning as “the third place”—a space distinct from work and school that off ers an informal, social hot spot.
“Millennials have all the technology they want in their hands,” argues Joseph Batdorf, president of Houston-based J Turner Research. “What they're really looking for is a place to use it.” That means developments will need to continue to expand bandwidth and off er Wi-Fiaccess throughout the property to keep up.
In some ways, Gen Y views a living space in much the same way they'd view consumer electronics—as something that evolves with them. “[Gen Y] wants to be able to purchase upgrades for their car like they do apps for their smart phone,” says architect Manny Gonzalez, principal at Irvine, Calif.–based KTGY. “And if we don't think about that in our rental communities, that we have to upgrade so that we're constantly changing, we're going to be out of touch with this new generation of renters.”
Here's a look at eight ideas for amenities with tech-centric Gen Y in mind:
1. EXPANDED BANDWIDTH
Gen Y renters are likely coming straight from campus housing or their parents' home into their first apartment, and they expect the same technology they had to be available once they move in. That means the wireless speed better match what they are used to. “Speed continues to be critical for Wi-Fito Apple-centric Gen Y,” says Richard Holtz, CEO of Infinisys, a Daytona Beach, Fla.–based technology consulting and design firm.
And as phones, computers, and televisions now require fast Internet, multifamily properties will have to continue to expand their bandwidth. In fact, many REITs now view wireless connectivity to be as common an amenity as a swimming pool, or as vital a service as electricity. They'll also sometimes off er tech support on site for residents. It costs about $100 to $300 per unit for such services, but it goes a long way toward attraction and retention.
2. PAPERLESS LEASING CENTERS
Maps and brochures are such antiques. Potential Gen Y residents have already seen these on your website anyhow. Gonzalez instead suggests turning the experience of the leasing office into something similar to a visit to an Apple store, where everything is interactive, lively, and fun.
“It's all done electronically; there's no paper,” he says. “Even when you go in and buy a computer or an iPhone, you don't get a receipt. They e-mail it to you. So if you think about marketing the way Apple does, you'll have a [leg] up on everybody else that's your competition out there.”
Plus, you'll save money, not to mention trees, by going paperless.
3. AIRPORT-STYLE KIOSKS
Alliance Residential had a bright idea at its latest Seattle property, dubbed Koi. Among the property's many high-tech features, airport-style kiosks will be installed in the lobby where residents can pay their rent and have access to an internal Craigslistlike online bulletin board to buy and sell furniture with other residents.
“The most important thing for renters today is to be in touch at all times,” says Suzi Morris, Phoenix-based Alliance's director of development for the Pacific Northwest Division.
Each kiosk costs between $5,500 and $7,000 for a flat-screen TV, six-point touchframe overlay by Screen Solutions, plus related infrastructure and software costs.
4. CHARGING/DOCKING STATIONS
“Everybody needs a charge; it's like fuel,” says Kerry Kirby, founder of New Orleans–based 365 Connect, a technology firm specializing in the multifamily industry. Luckily, it's fairly simple to put an iPod docking station in your units and have wireless cables going to speakers. And these stations only cost between $15 and $20 per unit, but their presence has a larger eff ect.
“Most of these kids will have an iPhone or something that's got their music on it. And whether it's used much or not, it's the idea that it's there: The idea you thought about it, that you understand the next generation,” Gonzalez says. “[Docking stations] are one of the things you need to have in your units to let kids know this is a cool place to hang out.”
5. PERSONALIZED FITNESS
Gen Y residents make working out a priority, with 83 percent marking fitness centers as their No. 1 common-area amenity preference, according to J Turner Research's 2011 Evolving Resident Demographics report.
One trend seeing a resurgence, according to Holtz, is computer-based fitness equipment. That means state-of-the-art touchscreens and computers in each treadmill or elliptical that will personalize a resident's fitness program.
But it's not cheap: They typically run about $10,000 and up per machine.
6. OUTDOOR KITCHENS
Downsizing unit kitchens by installing smaller appliances is an option for Gen Y units, because, in the long run, they allow renters to have more living space. An outdoor kitchen could take the place of that space, off ering another area for residents to socialize.
Gonzalez likes the idea of outdoor kitchens for Gen Y renters but wishes someone would invent an outdoor microwave, because that's how he thinks this demographic really knows how to cook.
But customization comes into play with the idea of an outdoor kitchen because Gen Y renters might want to invite a group over. “The real critical thing for them is the movable furniture in that outdoor space,” Gonzalez says. “Give them something that's light and movable so they can customize it to whatever their group size might be.”
And it's an aff ordable addition. The Home Depot off ers an outdoor kitchen with grill, side burner, and fridge for about $4,000.
7. OUTDOOR THEATERS
Outdoor theaters have replaced the old idea of complexes off ering theater rooms, an amenity that was always a stop on the property tour but rarely, if ever, used. Today, some Gen Y renters might not have their own TV if they stream everything online, so this is a nice amenity that sets your community apart.
And if investing in an outdoor theater is too much, just off er rooftop or outdoor movie nights. That doesn't take a lot of technology, just a screen and projector.
8. ELECTRONIC DISPLAYS FOR BUSINESS AND PLEASURE AvalonBay's new AVA properties are designed to be Gen Y–friendly. And that extends to the mail room at the developing H Street community in Washington, D.C. Future residents will see their name on a TV screen when they receive a package or notice from the rental office.
“Our residents expect our properties to be wired with the latest stuff ,” says Jon Cox, Arlington, Va.–based AvalonBay's vice president of development.
H Street will also feature a series of digital screens in the lobby off ering electronic artwork during the day and multiple TV screens equipped with Wii at night.