It may surprise some operators to learn that residents' preferences don't always match the amenities most frequently offered in multifamily housing.
In an analysis of user preference data, as well as property-level data gathered from its apartment listings, Apartment List has found that some amenities are undersupplied and others oversupplied. Amenity preferences and availability vary widely from metro to metro, the data showed, often based on climate, affordability, and the age of the area’s housing stock.
The gaps between the availability of a given amenity and the demand for it also can vary, and some metros are serving their renters’ preferences better than others.
Supply and Demand
In-unit laundry is far and away the most undersupplied amenity in Apartment List’s analysis, with a -40% availability gap: 53% of renters nationwide are looking for in-unit laundry equipment, but only 13% of apartment properties offer it. Air-conditioning comes in second nationally, with a -17% availability gap: 56% of renters cite a preference for air-conditioning, but only 39% of properties provide it.
Conversely, Apartment List found, pet-friendly facilities are the most oversupplied amenity, at 40% for cat-friendly apartments and 22% for dog-friendly properties. While 52% of developments allow cats and 48% allow dogs, only 12% of users are looking for a cat-friendly apartment, and 27% are looking for a dog-friendly building.
Apartment List housing economist Chris Salviati attributes this mismatch of supply and demand to the difference in the amenities' up-front costs. Pet-friendliness requires no up-front costs, and the incremental costs of wear and tear are usually covered by “pet rent.” In-unit laundry machines, however, take up valuable floor space and require a huge financial commitment for equipment and plumbing.
Preferences by Metro
Of the nation’s 25 largest metros, San Antonio has the highest amenity demand levels in five out of 10 categories, Apartment List found, including air-conditioning (72%), parking (64%), and pools (41%). New York, meanwhile, has the lowest amenity demand levels for five of the 10 amenities in the analysis, including in-unit laundry (39%), pools (9%), and balconies (17%).
While its hot climate explains the city's demand for air-conditioning and pools, San Antonio is also one of the most affordable large cities in the nation, with a median rent of $1,050 for a two-bedroom apartment. As such, according to Salviati, its residents are more willing to spend more on higher-end amenities. In New York, where the same two-bedroom rents for a median $2,470, affordability takes priority over additional amenities.
Satisfaction by Metro
In order to determine how well a given metro’s amenity supply matches renter demand, Apartment List calculated both an Amenity Satisfaction Index (ASI), which represents the likelihood a renter will be able to find the amenities he or she wants, and an Excessive Amenity Index (EAI), which represents the likelihood of encountering additional amenities a renter doesn't want, for the nation’s top 70 metros. Positive values indicate an above-average likelihood, while negative values indicate a below-average likelihood.
Metros with a positive ASI and EAI are considered “amenity-rich” metros, where amenities are in abundance but renters may end up paying for features they don't need. These include all the major Texas markets (Houston, San Antonio, Dallas, and Austin), as well as New York and Boston.
Metros with a negative ASI and EAI are “amenity-poor,” and renters looking for particular amenities in these locations are likely to have trouble finding them. These areas include Rust Belt cities such as Detroit and Cleveland.
Metros with a positive EAI and negative ASI have an “amenity mismatch,” where properties are supplying amenities but not the ones renters really want. According to Apartment List’s analysis, these metros include Madison, Wis.; Portland, Ore.; and Phoenix and Tuscon, Ariz. Only 10 of the 70 metros studied are considered “well-matched,” with a positive ASI and negative EAI. Providence, R.I., is considered to have the best match.