Four Things That Will Be Driving Rental Demand for Next Decade | National Apartment Association

Four Things That Will Be Driving Rental Demand for Next Decade

NAA WebsiteBanner


Top Story
Market Trend Insights
Products Insights
Legislative/Legal News
NAA Announcements

Top Story


Four Things That Will Be Driving Rental Demand for Next Decade
Digested From "Small Housing Inventory May Push Rental Demand for Years"
Housing Wire (12/31/12) by Megan Hopkins

Research by the Bipartisan Policy Center forecasts that the next 10 years may bring as many as 5 to 6 million new renter households. One reason is that the relatively low inventory of available houses may push and/or keep many potential homeowners into the rental market. Barry Zigas, director of Housing Policy for Consumer Federation of America, remarks, "There is clearly an unmet demand for homeownership among young households. Those households are running up against a number of constraints." Three more factors that will all play into the escalation in renter households in the coming years include: tighter credit, lower incomes, and larger required down payments. Zigas adds, "Families will likely have less wealth because the rising generation is starting with less wealth. If down payments are at any significant level, it will be a barrier to acquiring a home for longer than may have been the case in the past." Among the key groups that will be driving the demand for apartments and other rental housing are seniors looking to downsize, young adults moving out on their own yet not ready for homeownership, post-foreclosure homeowners, and the growing number of immigrants.
Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Market Trend Insights

Three Reasons Why Denver Apartments Set Records in 2012
Digested From "Denver-Area Apartment Market Sets Records in 2012"
Denver Business Journal (01/04/13) by Dennis Huspeni

ARA Colorado reports that the Denver-area apartment sales market ranked as one of the country's hottest last year, with a record $2.4 billion worth of apartment communities sold. Low interest rates on construction, purchase and development loans, and higher demand from apartment residents were the three main reasons why the local apartment sector saw such sustained momentum throughout the year. ARA Colorado ranks as one of the highest-volume multifamily housing brokerages in the Denver metro area. ARA brokers alone moved approximately $1.1 billion worth of apartment assets in 62 sales in 2012, representing 10,429 apartments for a $104,204-per-apartment average.
Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Multifamily Construction Has a Hot November
Digested From "U.S. Construction Spending Falters, But Outlook Improving"
Dayton Business Journal (01/03/13)

According to an analysis of federal data by the Associated General Contractors of America, construction spending declined 0.3 percent in November from the month before. The retreat followed seven consecutive months of growth. However, a tax agreement regarding the fiscal cliff should boost private construction investment moving forward. The association's chief economist, Ken Simonson, noted that private single-family and multifamily housing spending continued to post strong growth numbers. Expenditures on new single-family houses increased 1.3 percent for November and 29 percent on a year-over-year basis. Meanwhile, multifamily housing outlays climbed 0.5 percent and 46 percent, respectively.
Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Orlando Apartment Sector to Tighten Further in New Year
Digested From "Apartment Vacancies Expected to Shrink"
Orlando Sentinel (FL) (01/03/13) by Mary Shanklin

A new Colliers International study shows that Orlando's tight rental housing market is likely to tighten further in 2013, even with new apartment communities coming online. Based on apartments slated to come on the market during the next year, Colliers' Orlando office forecast that even modest job growth would push the metro area's vacancy rate down to 5.2 percent and lower from its current mark of 5.8 percent. Those areas most likely to see vacancies fall include Lake Nona, Windermere, Winter Park, and locations near the major theme parks and the University of Central Florida. George Pjevach, director of multifamily services for Colliers' Orlando office, further notes that not all parts of the Orlando market are tightening up. The Pine Hills and Parramore areas, for example, still have vacancy rates of 11.9 percent. Colliers based its forecast on a job-modeling metric devised by a trio of professors at the University of Houston. Their model calls for one new apartment for every 8.9 jobs created in a market. For the most part, apartment demand has been based more on historic trends than on projected job growth. So far, the biggest rush to develop new apartment communities has indeed been in downtown Orlando. Greg Wilson, who represents apartment buyers and sellers for Colliers in Orlando, says the downtown market continues to attract young professionals. Still, he expressed skepticism about such residents staying long-term in the central business district. Eventually, most will want families, bigger homes, and backyards.
Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

What's Behind Americans' Shocking Decline in Electricity Use?
Digested From "U.S. Electricity Use on Wane"
Wall Street Journal (01/03/13) by Rebecca Smith

While Americans are using more gadgets, TVs, and air conditioners than ever before, their electricity use is barely growing. The Energy Information Administration is forecasting that annual electricity use nationwide will rise an average of only 0.6 percent for industrial users and 0.7 percent for households through 2040. Electricity production in the U.S. fell in 2008 and 2009 in response to tepid demand amid the recession. It then ticked up slightly in 2010 before falling again the following year. For many years, electricity use was viewed as a barometer of economic growth. The link has become less clear cut in recent years, due partly to a big push to make such products as a home's major appliances and other products use less electricity. Additionally, the "erosion of U.S. manufacturing" has played a role in the consumption slowdown. The slower pace of growth in electricity use has utility companies scrambling to reduce spending or redirect capital investment in order to bolster their profits regardless of consumption patterns.
Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Boston's Castle Square Apts Rule With Royally Efficient Retrofit
Digested From "Boston's Castle Square Apartments Receives Royally Efficient Retrofit"
Mother Nature Network (01/04/13) by Matt Hickman

The nation's largest deep energy retrofit of an affordable multifamily housing development was awarded with LEED Platinum certification last month following an extensive, non-gut renovation that has been two years in the making. The Castle Square Apartments community, on the edge of Boston's South End, was built in the 1960s with little regard for energy efficiency. The 540,000-square-foot community for low- and moderate-income individuals has been subject to sweeping changes as of late. Spearheaded by owners Castle Square Tenants Organization and WinnDevelopment, the $50.5 million deep green retrofit project has resulted in a 72 percent reduction in energy use with annual utility bills expected to drop by $227,578. Much of the energy savings is due to the installation of an innovative, super-insulated exterior shell, which measures five inches thick. In combination with extensive air sealing work, the shell is expected to reduce the apartments' heating needs by 61 percent and cooling needs by 68 percent. Additionally, Castle Square Apartments was topped with super-insulated reflective roofs and solar thermal panels. High-efficiency fiberglass casement windows, high-performance HVAC technology, Energy Star appliances, and energy efficient lighting were also installed in each of the rental units. The common areas received similar upgrades.
Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

The Two Things That Made Houston Tops in Rent Spikes for 2012
Digested From "Houston Rent Spiked Nearly 17 Percent in 2012" News (Texas) (01/02/13)

According to a Fortune magazine ranking of the 10 cities with the highest rent spikes in 2012, Houston took the top spot. Fortune reporters found that rent rose 16.8 percent since 2011 in the city, with a median rent of $1,270.50 a month. The spike was likely due to two factors: high demand from those eager to rent and few available apartments. Next on the list was Oakland, Calif., with a spike of 11.6 percent, followed by Miami with a 10.8 percent rent increase.
Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Why Is Multifamily Housing So Upbeat Heading Into 2013?
Digested From "Rental Market Outlook Positive"
NuWire Investor (01/01/13) by Bendix Anderson

The multifamily housing sector faces an upbeat 2013 in the wake of lawmakers reaching a fiscal cliff deal, as about 400,000 new apartment units will be needed per year to meet projected demand. Currently, multifamily housing developers are building about 250,000 units per year, and analysts are confident that the market can absorb this new construction and potentially more. Apartment demand seems poised to as strong as it was before the financial crisis, as the age group that typically rents -- between 20 and 34 years old -- will grow by 2.4 million people over the next five years. However, everything from financing constraints to rising construction costs to neighborhood opposition could keep actual construction down.
Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Census Shows Where U.S. Is Growing and Where It's Not
Digested From "If Demography Is Destiny, Good News for Texas, DC"
Human Events (01/03/13) by Michael Barone

Each year, the Census Bureau releases its estimates of the populations of the 50 states and Washington, D.C., giving demographers the opportunity to see where the country is growing and where it is not. Nationwide, the agency estimates that the United States has grown from 308 million people when the Census was conducted in April 2010 to nearly 313 million in July 2012. Researchers note that the fastest growth in the past couple of years has been in a couple of small enclaves -- in D.C. (5.1 percent), thanks to the U.S. government and gentrification, and in North Dakota (4 percent), courtesy the Bakken shale oil boom. The next-fastest growth rate was measured in Texas where the population climbed 3.6 percent to 26 million. Two other states -- Utah and Colorado -- grew more than 3 percent because of high birth rates and newcomers. Florida, where growth stagnated following the housing boom gone bust, rose 2.7 percent. Economically beleaguered Rhode Island and Michigan were the two states that lost population in the last two years. The latter, though, appears to be on the way back, growing enough in the past year that its 2010-12 estimated population loss was only 275 people.
Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Products Insights

Ring, Ring! Smartphones Can Also Be Secure Apartment Keys
Digested From "Turning Smartphones Into Secure and Versatile Keys"
Fraunhofer-Gesellschaft (01/02/13)

Mobile phones can serve as keys for front doors, cars, and more. But researchers at the Fraunhofer Institute for Secure Information Technology (SIT) have developed software that will make the key app concept more versatile and secure. The ShareKey software enables users to issue digital keys remotely and assign them certain user permissions. "For instance, I can grant the building superintendent access to my apartment for a short period so that he can open the door for the gas meter to be read while I'm at work," says SIT's Alexandra Dmitrienko. The software sends electronic keys directly to the user's mobile phone in the form of a quick response code attached to an email or MMS. Dmitrienko notes the software uses near-field communications technology and is equipped with resource-efficient communication protocols.
Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

The Two LED Bulbs You Must Have
Digested From "Field-Testing LED Light Bulbs"
Washington Post (01/04/13) by Katherine Salant

Light-emitting diode (LED) bulbs continue to emerge in the home-lighting arena. LEDs use about the same amount of energy as compact fluorescent bulbs (CFLs), but they last on average about 22 years -- much longer than most people plan to stay in the place where they will be installing them. Washington Post columinst Katherine Salant writes that the two LEDs that significantly outperformed the others in her personal home testing were manufactured by Sylvania for use in a track light (Par 20) or a recessed ceiling fixture (Par 38). Both were found to have an unusually high Color Rating Index (CRI), a number that indicates how the colors of objects under a given light appear to the human eye. Sunlight has a CRI of 100. By contrast, the CRI of most LEDs is 80. However, Sylvania's CRI for these "HD" Par-style bulbs is 95, which is ideal for those times when having the correct color of objects is important such as putting together an outfit for work. It should be noted, though, that the Sylvania HD Par-styled bulbs come at a premium. Salant writes that the company's HD LED Par 20, which she used on a track light fixture, sold for $33 at her local Lowe's. Sylvania's HD LED Par 38 bulb, also used in a recessed ceiling fixture, retailed for $50. Salant concluded: "The only downside for LEDs that I observed in my testing was an inconsistency in the color of the light given off by identically rated bulbs from different manufacturers. The color is not the same."
Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines


Equity Residential to Sell Up to $1.5 Billion of Apartments
Digested From "Equity Residential to Sell Up to $1.5 Billion of Units"
Bloomberg (01/07/13) by Prashant Gopal; Oshrat Carmiel

Equity Residential has agreed to sell 27 of its apartment communities to Goldman Sachs Group Inc. and Greystar Real Estate Partners LLC. The $1.5 billion deal, which comes after Equity's agreement to purchase part of Archstone, values the 8,010 apartments in the portfolio at around $187,000 per rental unit. The various properties are located in seven major markets -- northern New Jersey; Florida; Phoenix; Denver; Southern California, the Washington, D.C., metro area; and the San Francisco Bay area. The sale is expected to be completed by the end of this year's first quarter. Equity Residential President and CEO David J. Neithercut comments, "With this transaction we will have made significant progress selling assets in our exit markets and non-core assets in primary markets to fund our share of the acquisition of Archstone. Demand for multifamily assets remains very strong."
Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Colonial Sells Apartment Portfolio to Elco Partnership
Digested From "Colonial Sells Apartment Portfolio to Elco Partnership"
CoStar Group (01/02/13) by Randyl Drummer

Elco Landmark Residential and Timbercreek Asset Management recently acquired a portfolio of four apartment communities in three states -- Texas, North Carolina, and Virginia -- from Colonial Properties Trust for $95.4 million. The purchase marks the first transaction completed under the two firms' private label partnership. The four communities together total 1,380 rental units, of which 95 percent are occupied. Elco plans to rebrand the individual apartment communities and implement a 10-month renovation and repositioning program. The properties include Colonial Village at Canyon Hills in Austin; the Heatherwood Apartment Homes in Charlotte; and Autumn Hill Apartments in Charlottesville, Va.
Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

REIT Closes Out 2012 in Style, Buying Five Apt Communities
Digested From "Steadfast Income REIT Buys Five Apartment Communities -- Including in Kentucky and Tennessee -- to Close Out 2012" (01/04/2013)

In late December, Steadfast Income REIT acquired five apartment communities for a total purchase price of nearly $115 million. They included properties in Louisville, Nashville, and Austin. Steadfast President Ella Neyland remarks, "Our December acquisitions capped a banner year for the company," which saw Steadfast add 22 apartment communities with more than 5,400 rental units for $500 million.
Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Legislative/Legal News

Here's What's in the Fiscal-Cliff Deal
Digested From "Here's What's in the Fiscal-Cliff Deal"
National Journal (01/02/13) by Catherine Hollander

On New Year's Day, Capitol Hill lawmakers approved legislation to address the year-end tax hikes and spending cuts known as "the fiscal cliff." It includes higher taxes on individuals earning $400,000 and on families making $450,000 or more. There will also be higher tax rates on capital gains and dividends for wealthier households, along with a one-year extension to unemployment insurance. Automatic spending cuts were delayed for two months. Also put off were scheduled cuts in physician payments under Medicare. In addition, personal exemptions will be phased out and itemized deductions will be limited for individual taxpayers making over $250,000 and families earning more than $300,000. The estate tax will rise to 40 percent from its current 35 percent level, , and the alternative minimum tax will be permanently indexed to inflation. Finally, the deal includes five-year extensions of the Child Tax Credit; the American Opportunity Tax Credit, which can be claimed for college-related expenses; and the Earned Income Tax Credit, which is a refundable income-tax credit for low- to moderate income working Americans.
Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

2013 Brought New Tax for Some Real-Estate Investors
Digested From "2013 Brought New Tax for Some Real-Estate Investors"
Wall Street Journal (01/03/13) by A.D. Pruitt

Many who receive rental income from such properties as apartment units and retail space will be hit with an investment surtax of 3.8 percent that took effect on New Year's Day. The so-called Medicare tax was passed as part of 2010's Affordable Healthcare Act. It will not affect real estate firms or those who work full-time managing a property portfolio. Rather, the levy will hit such high-earning professionals as physicians, attorneys, and others who have full-time jobs but dabble in real estate for the purpose of side income. The new tax covers all other types of investment income as well, including dividends and interest from banks and bonds. Jim Guarino, a partner at the accounting firm of MFA-Moody, Famiglietti & Andronico LLP, remarks, "We know for certain the Medicare tax is here to stay. I think there might have been some question if the tax would be a bargaining chip in the fiscal cliff negotiations. It was not."
Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Charlotte Apt Owners Find New Way to Take a Bite Out of Crime
Digested From "Charlotte Landlords Must Register With Police"
WCNC (NBC North Carolina) (12/31/12) by Elisabeth Arriero

Beginning Jan. 1, a new ordinance in Charlotte began requiring all rental housing owners to register their buildings with the Charlotte-Mecklenburg Police Department (CMPD). The CMPD says the change will help it respond in a more timely manner to emergencies and to better track locations where crime is flourishing. The apartment community owner's name, home address, phone number, best contact number, and the range of rental property addresses they oversee will go into a database for the police. While the ordinance went into effect on New Year's Day, local authorities are giving owners and managers a six-month grace period to register. Properties that fall in the top 4 percent of police calls and crime statistics will be required to pay an administrative fee ranging from $350 for single-family homes for rent to more than $1,300 for large apartment communities.
Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

You Are the Product With Instagram and Other Social Media
Digested From "Instagram Users: You ARE the Product"
MarketWatch (01/02/13) by Therese Poletti

MarketWatch columnist Therese Poletti urges users to recognize that they are not customers of such social-media services as Instagram, but are actually "part of the product that is sold to the true customers -- the advertisers who pay these companies money and expect a return on their investment." Instagram, which is now owned by Facebook Inc., is still dealing with the fallout from a recent privacy flap, which was sparked in December when the photo-sharing service announced confusing changes in its terms of service and privacy policy. The main concern was that Instagram could allow the pics taken by its users to be used in ads. In recent years, Facebook has also angered consumers with its confusing privacy settings. "What all these past and current debates are showing," Poletti concludes, "is that there is a disconnect between the social media firms -- which are profit-focused, revenue-generating businesses -- and their growing number of users, who have become accustomed to getting valuable services at no charge. Each side needs to take some responsibility for the disconnect."
Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

NAA Announcements

A ‘State of Art’ Performance from the ‘Warhol of Wall Street’ at the 2013 NAA Education Conference & Exposition

Erik Wahl, internationally recognized graffiti artist, author and entrepreneur, best-known for performing incredible acts of art during his presentations, will deliver the Friday keynote speech for the 2013 NAA Education Conference & Exposition, June 19-22 in San Diego.

If you think watching paint dry is boring, think again: Wahl challenges companies to think different, and his presentation will help you and your organization uncover new and creative ways to achieve 2013’s profit targets through innovation and superior performance—but only if you register to attend the industry’s largest gathering of multifamily housing professionals. Don’t delay: Sign up by Feb. 1 and save $400 by visiting the NAA Education Conference website.

Make sure to book your housing as soon as you register—rooms are going fast. Visit the Education Conference website for information and reservations for all official NAA Education Conference hotels.

Wahl says the most successful companies cultivate an environment of creativity. Want to know more? Read “It Pays to Play” in the December issue of units.

Wahl is but one of several world-class thought leaders lined scheduled to appear at the NAA 2013 NAA Education Conference & Exposition—visit the NAA website to preview other exciting speakers.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines
Find Out What Makes Millennials Tick at the 2013 NAA Student Housing Conference & Exposition

Plan to better understand what makes Millennials tick Feb. 25-27 as NAA convenes the 2013 Student Housing Conference & Exposition in Las Vegas at the ARIA Resort.

Millennials’ attitudes toward higher education evolve faster than their smartphone models, making it critical to understand the needs and expectations of future students now so as to be prepared to engage them when they arrive on campus.

Michael Wood, Senior Vice President at TRU, one of the world’s leading research firms specializing in teens and 20-somethings, will headline the keynote session “Youth Truths: The Millennial State of Mind.” Wood's presentation is one of many learning opportunities during two days full of education and networking, from general and breakout sessions to receptions and time spent interacting with exhibitors on the trade show floor.

Wood says understanding teens’ attitudes and expectations is critical when preparing to meet their housing needs in college (and beyond). Want to know why? Read “Millennial State of Mind” in the January issue of units.

Visit for registration, schedule, housing and the latest announcements. And remember to use the official hashtag #NAAStudentConf to engage, discuss and follow the conference.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines
2013 Green Conference Latest in World-Class Events Offered by NAA

Don’t miss the chance to register today for the 2013 NAA Green Conference, April 15-17, in Baltimore.

Join forward-thinking industry colleagues and learn ways to improve your community’s energy efficiency and bottom-line performance through a cutting-edge lineup of education topics and panel presentations at the NAA Green Conference.

Come learn from acclaimed green-industry expert Andrew Winston, a best-selling author of “Green to Gold” and “Green Recovery,” who will serve as the event’s keynote speaker. Find out how your business can profit from environmental thinking as Winston guides you about what works—and what doesn’t—when companies go green.

Save $200 off the onsite registration rate before Feb. 15 by registering today.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines
Two Expanded NAA Education Conference Sponsorships You Need to Consider

If your organization is a supplier or property management, you now can consider branding your company in June at the 2013 NAA Education Conference & Exposition. For the Opening Party, Thursday, June 20th your team can “own” a restaurant for the night at the party in the San Diego Gaslamp Quarter.You can even team up! See the details here. For the Thursday Keynote, we have a special Sponsorship that includes introducing Sir Richard Branson showcasing your brand with a true business innovator. Explore the opportunity here.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines
NAAEI Hosts Webinar Wednesdays

NAAEI joins forces with Apartment All Stars and Multifamily Insiders to host Webinar Wednesday Training Series.

NAAEI is teaming up in 2013 with the largest premium webinar series in the industry to provide state and local association members with access to industry thought leaders to discuss innovative ideas, best practices and emerging industry trends. These webinars will give participants the tools they need to become industry superstars in their own right. The Webinars:

• will cover industry trends and timely topics that benefit both on- and off-site staff
• are available at a one-time or subscription price
• offer NAAEI Continuing Education Credits (CEC)

Cost: The webinar series averages two webinars per month, and for a limited time, we have discounted this subscription rate to $49.99/month, a discount of 17%.

Learn more today!
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines
2013 PARAGON Awards

The Call for Entries for the 2013 PARAGON Awards is now open! If you would like to nominate an individual, an affiliated association or a community that represents our industry's models of excellence, please visit the PARAGON Awards Overview page. Entries must be received by Monday, March 18, 2013. Winners will receive their PARAGON award during the NAA Awards Celebration breakfast with Bert Jacobs during the 2013 NAA Education Conference & Exposition, Saturday, June 22, in San Diego. They will also be featured in the September 2013 issue of units Magazine, NAA’s monthly publication that reports on the apartment industry.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines
Find an NAAEI Designation Course Near You!


Roanoke Valley Apartment Association
January, 2013

South Dakota Multi-Housing Association
March, 2013

Greater Charlotte Apartment Association
April, 2013

CAM Online


Austin Apartment Association
January – February, 2013

Apartment and Office Building Association of Metropolitan Washington
February – March, 2013

South Dakota Multi-Housing Association
February – March, 2013

Rental Housing Association of Boston
April – May, 2013


Roanoke Valley Apartment Association
January, 2013


Apartment and Office Building Association of Metropolitan Washington
April 2013

NALP Online

To find more courses in your area, click here.

For more information about any of the classes listed, please contact Kimberly McCrossen at or 703/518-6141 ext. 121.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Abstract News © Copyright 2013 INFORMATION, INC.
Powered by Information, Inc.
January 8, 2013

Follow NAA Online
facebook Twitter LinkedIn
NAA's YouTube Channel NAA Photo Collection NAA Community Site
2013 Capitol Conference
2013 NAA Green Conference
NAA Education Conference
CAM Online
NALP Online

Event Highlights

A Career with Growth & Opportunity

Career Growth and Opportunity  

Learn about the perks and benefits of working in residential property management and some of the reasons the industry provides career growth, stability and endless opportunities.