Alexa: What’s the latest apartment amenity?

The newest thing in luxury apartment living is “Alexa Everywhere” as highlighted in this Wall Street Journal article:

New York developer Tishman Speyer is making a bet on voice-activated smart-home devices at each of the 1,871 apartments there, in what it sees as a blueprint for the future of rental housing…

In the 120 apartments in the “Penthouse Collection,” which consists of luxury units on the top four floors at Jackson Park, home-automation features will be built directly into outlets, light switches and a smart thermostat that could be used to raise and lower the heat or air conditioning through word commands…

The smart appliances would be connected through a hub to ’s Echo Show, a device with a video screen, activated by calling out to “Alexa.”…

The other apartments, now on the market, will get a scaled-down version with the Echo Show and an outlet that can plug into an existing receptacle and be used to turn on a coffee maker or a lamp. Renters would be able to add features as well.

The article goes on to point out that the “smart home” devices might currently focus on managing the lights and appliances, but in the near future they could incorporate information on services provided by the property manager – office hours, dates and times of upcoming events, reserving space at the gym, etc. – or even services and events in the surrounding area.

While this is confined to the extreme high end right now – the penthouses in Jackson Park rent for $10,000 a month – this is something that is likely to become an expectation at most market rate communities for  increasingly tech dependant renters.

NAA Report Explores Effects of Value Added Amenities

A report recently released by the National Apartment Association explores which amenities are most widely offered at both the community-wide and unit level and the impact those amenities have on rent and occupancy rates. Titled Adding Value in the Age of Amenities Wars the report details which amenities are most commonly offered and explores which are most effective in raising average rents.

Here’s a sample of some of the findings:

  • Top community-wide amenity: Fitness Centers
  • Top unit-level amenity: Washer/Dryer in unit
  • Percent of residents willing to pay a premium ($75) for hardwood floors: 49%
  • Percent of residents willing to pay a premium ($30) for granite countertops: 39%
  • Percent of residents willing to pay a premium for fitness classes: 46%

Finally, towards the end of the report is a graphic showing the impact of renovations on occupancy, broken down by apartment class:

Class A – Occupancy increased from 92.0% to 92.8%
Class B – Occupancy increased from 92.7% to 94.3%
Class C – Occupancy increased from 88.6% to 91.0%

You can read the entire report here.


This Gym is Not for You

A property manager in New York City is making a new gym facility available only to those residents who pay market-rate rent:

A tale of two cities is dividing Stonehenge Village, an Upper West Side apartment complex where management has prohibited the rent-stabilized tenants from using a newly minted gym.

Stonehenge Partners, the company that bought the 417-unit, three building complex on W. 97th St. near Amsterdam Ave. in 2006, told residents at a meeting earlier this month that the 1,000-square-foot gym was only open to its market-rate tenants…

A 2008 city law prohibited discrimination in housing based on tenants’ income, James’ spokeswoman said. The law was written to protect tenants in the Section 8 voucher program, but the spokeswoman noted it may apply to other instances, as well…

Residents said management even shot down tenants’ requests to pay a registration fee to use the facility.

“(The gym) is aimed specifically at new and prospective tenants who expect certain amenities and incentives that are commonly available to market rate renters,” said company spokeswoman Marcia Horowitz, who added that attracting market-rate renters that pay as much as three times the amount paid by rent-subsidized tenants “and to maintain high occupancy is critical to the overall financial health of the building which is in every tenant’s interest.”

This is the second story out of New York recently about management companies treating their residents differently based on their rent rates. The first was a story about “poor doors“:

City housing officials approved of a deal to allow a developer to create a separate entrance for low- and moderate-income tenants at a new rental development on the city’s west side…

The 33-story project at 40 Riverside Boulevard will include 55 units (out of 274 total) of affordable housing for low-income households.

The folks on the Freakonomics podcast have an interesting discussion about both these stories and you can listen to them by clicking on the link below. One of the most interesting comments was economist Steven Levitt’s thoughts on why the property managers would not allow rent-stabilized residents to even pay a fee to use the gym:

..I believe in markets and prices and the usual way to deal with the provision of goods is through prices. But I think that the developers here probably have an ulterior motive…

The way that these contracts are usually written is that these apartments will remain rent-controlled, below-market apartments for as long as the current tenants live there. So in a typical setting, it would never make sense to say the old guard tenants can’t use the gym, you just find the right price, it might be a very high price, that takes into account the negative externality they may have on the new tenants, but you wanna charge that price. And it would just be a mistake to ban them completely. But, I don’t know, if I’m that developer, I just wanna get these old guard out and so maybe really the market isn’t the best tool. It’s actually making life very unpleasant in a way that prices can’t actually make life unpleasant. So the idea that you actually ban them from the gym serves a real purpose here. It tells them, look, we think you’re second-class citizens, we don’t respect you, and as long as you live here we’re going to treat you horribly. Now that’s not a very nice and a very moral way to do it, but if your objective is to make life awful for these folks and get them out, it’s proving to be a pretty effective way of doing that, I bet.

NMHC Survey Shows Amenities Increasingly Important

From Multifamily Executive:

To better crack the code on what apartment renters want, the National Multi Housing Council (NMHC) and Kingsley Associates have partnered on one of the largest surveys of apartment resident preferences. The survey was sent to 200,000 residents across the country, and responses were collected from renters in 38 states, covering 84 MSAs and a wide variety of property classes and building types and sizes…

One of the clearest takeaways from the survey results was that the right level and mix of community amenities has become a much more important factor when renting an apartment…

In fact, respondents cited amenities as one of the top three reasons they decided to rent versus own, after location and lack of a down payment. More interesting is that, compared with previous surveys, a larger percentage of respondents in 2013 pointed to community amenities as a top factor, while a smaller percentage indicated the lack of a down payment as such…

Moreover, amenities are even more important for people looking to rent in higher-end communities. More than 75 percent of respondents at Class A properties cited community amenities as a high priority, compared with 58.8 percent in Class B properties and 49.2 percent at Class C properties.