Multifamily Executive caught up with leaders from across the rental housing industry to find out their priorities and outlooks for 2024. Here's what they had to say.
“I expect 2024 will be more challenging for our industry compared to 2023, driven by the current economic and global landscape. Despite these headwinds, we have a long-term perspective, and my priorities remain relatively consistent:
First and foremost, I am focused on supporting our company’s purpose: ‘to create communities our residents are proud to call home.’ Our residents are our ‘North Star,’ and we are committed to creating an exceptional experience for them.
I am also focused on fostering our special culture and enhancing initiatives around talent management so that we can continue to attract, develop, and retain our exceptional teams as well as have intentional acts to foster our culture of caring and results.
Last, using our strategic plan as a guide, we are focused on embracing innovation and pursuing excellence in all that we do so that we can be a sustainable and scalable company, and outperform for our residents, partners, and associates.”
“Even with the ongoing volatility in the capital markets, we continue to be optimistic about the demand for rental housing. The fact is in just the United States alone we have a massive undersupply of housing to the tune of around 5 million units. When you couple that with the fact it is pretty challenging to purchase a home today with elevated mortgage rates and more, it reinforces what our internal data is showing: Renters are renting for longer, and the demand will continue to be there in 2024 and beyond.
Our priorities mirror the need for housing today, from our newer efforts focused on attainable housing driven by our modular construction business to areas where we continue to scale, like student housing and single-family build for rent.”
“The Fed’s announcement about potential rate cuts could in itself lead transaction volume to pick up slightly, but it hasn’t dramatically changed how I view 2024. I don’t see a return to significantly increased transaction volume until 2025.
Lower rates would certainly contribute to narrowing the bid-ask spread and positively impact debt proceeds, cap rates, and valuations.
But if the anticipated cuts don’t happen at the speed at which they’re anticipated, or if they don’t happen at all, we could see the current situation being prolonged. Fortunately, multifamily is underpinned by a set of fundamentals that remain highly positive.”
“The enduring impacts of skyrocketing operating costs—from insurance premiums to state and local taxes—high interest rates, and unprecedented regulatory activity at all levels of government remain top of mind. Operators, particularly those newer to the industry who have navigated fewer economic cycles, have felt these impacts on their net operating income (NOI), variable interest rate loans, and capital improvement spending. Though these challenges persist and experts anticipate that wage growth decline and a weakening labor market will fuel continued economic volatility, the Federal Reserve’s comments from its December meeting give hope that interest rates should come down in later 2024; a reduction in interest rates would provide the most immediate relief to NOI for owners and operators. NAA will proactively prioritize resources to help members through these economic challenges.”
“As we continue to navigate a period of economic uncertainty, the need for quality housing for renters who are moderately or severely cost burdened—which the Joint Center for Housing Studies of Harvard University found was 43.6% of households as of 2022—remains high. Legislation to help create additional housing, rehab aging affordable housing, and/or streamline the approval processes to build more housing will be crucial in supporting the ability of residents to live comfortably and thrive in markets throughout the country. Looking ahead, we’re continuing to seek out opportunities to partner with public entities to preserve and create affordable housing and help revitalize neighborhoods, as well as implementing strategies to optimize and grow our resident service offerings to enhance lives and improve situations.”
“2024 is going to an exciting year for National Multifamily Housing Council, our members, and all rental housing providers. We are working hard to educate lawmakers about the policies that will actually increase the supply of needed housing and the risks of rent regulations. … Some of the issues important to rental housing providers we are raising with lawmakers include insurance costs, potential changes to the tax code, and the rise of fraud in the rental housing application process. We are working to ensure policymakers understand the impacts on housing providers and housing affordability generally. It is critical to the economic well-being of people that live in or seek to access rental housing that representatives understand current market challenges and enact pro-housing policies.”