If you’re even considering apartment development, and believe your firm to be on the progressive side of multifamily builders and operators, then you’d better be designing for a resident who eats standing up, doesn’t care to look out the bedroom window at night, and has traded in traditional concepts of privacy for exciting communal spaces. “Suffice it to say, everyone is catering to the Gen Y renter, trying to understand how they live and what their space needs are, including how they bathe and how they eat,” explains Rohit Anand, a principal of Irvine, Calif.–based architectural firm KTGY Group, which has a pipeline of 10,000 units’ worth of apartments. “We are finding that these kids live differently from the renter who has come before them, and the product needs to respond to that,” says Anand, who runs KTGY’s East Coast office in Vienna, Va. Indeed, Gen Y—those 80 million individuals ages 16 to 29—boasts a set of needs and habits distinctly disparate from their parents’ and grandparents’. For example, this group was born and raised into technology: 37 percent of Gen Yers access the Internet with their phones, and the demographic spends an average of 11 hours and 32 minutes per month online, according to a 2009 Nielsen report titled “How Teens Use Media.” What’s more, they don’t buy based on brand alone, preferring to take into account peer recommendations. Still, when they do make purchases, they spend big, doling out approximately $170 billion annually of their (and their parents’) money.
Thankfully, apartment developers ramping up in the post-recession recovery have some changing needs of their own that will likely coalesce with this new renter’s lifestyle. Specifically, capital requirements for new construction financing are forcing developers, along with their equity partners and lenders, toward smaller projects that require less of an all-in cash commitment but are dense enough to generate solid rental revenue, particularly as rents begin to rise. Investors are also continuing to chase urban infill product in high job-growth MSAs, a follow-the-money tactic that architects say is a testament to the evolution of new development opportunities. “These are sophisticated investors and developers who base their decisions on all the research and data that is out there,” says Michael Ytterberg, principal of Philadelphia-based BLT Architects.
“Our clients are following the market, not leading it.”
The development sector’s need for smaller projects that still pencil out supersized returns is thus aligning with a resident desire for more efficiently designed apartments at communities that nevertheless pack in a super suite of amenities. A net out-migration of square footage is leaving the unit floor plan and being incorporated into open common areas that lack defined boundaries. Where walls and halls once separated amenity areas, a hotel-inspired great room space is beginning to define apartment community life outside of the unit, and given access to adequate technology and programming capabilities, residents seem all too eager to activate those spaces. As architects begin processing the first wave of post-recession apartment developments coming out of the ground, small, dense, urban, and cool are ruling the day—even outside core downtown markets.