There will be a huge demand for new apartments throughout the next decade. In fact, the industry will have to build at least 4.6 million apartments by 2030 to keep up. The increase is largely due to a set of structural changes occurring in the U.S. economy, including the maturing of millennials, the downsizing of baby boomers, and job growth in major U.S. cities. These changes will all support the continued shift from high-touch to high-tech.
 

Millennials, America’s largest demographic by age with more than 75 million people born between 1981 and 1996, spend more on rent as a percentage of their income than any other generation. In fact, they’re the largest group of renters in history, and they all want to use high-tech to request high-touch services. Here are some examples of high-tech amenities accessed via a smartphone that create a better high-touch experience:

 

  • After-hours tours: Property tours can be conducted at any time of the day. Millennials don’t work 9 to 5 and don’t want to be forced to physically tour a property during those times.
  • Smart locks: People want to ditch the keys, fobs, and cards. They want to use their smartphone to open and manage doors.
  • Cloud-based property management systems: Residents want to pay rent, request services, or resolve other property issues directly from an app on their phone.

 

Proptech Statistics

 

 
Baby boomers accounted for a large portion of the net increase in renters between 2006 and 2016 — 58.6%. As this demographic continues to age, many no longer need to live in their longtime homes and want to be in cities where there are more facilities and medical services. In contrast to millennials, boomers prefer a high-touch living model supported by high-tech. For example:

 

  • Facility updates: Alerts to their smartphone when a treadmill has opened up or other amenity space is available for use.
  • Secure and seamless visitor entry: The ability to order professional services such as house cleaning and dog walking without handing over their keys to a third party.
  • 24/7 doorman: The security and convenience that comes with a doorman, not necessarily the doorman himself.

 

Download The Shift from High-Touch to High-Tech

 

The job growth in major U.S. cities is being caused by the automation of agriculture, the concentration of wealth creation, and the specialization of work. Today, 55% of the world’s population lives in urban areas, and this is expected to increase to 68% (or 2.5 billion people) by 2050. This massive migration is supporting the demand for multifamily housing and further increasing the speed at which innovative technologies are being developed and implemented.

Similar to the pioneers of the LEED movement, a few earlier adopters in development, ownership, and management are redefining the meaning of luxury living.

“This will force the industry to become even more anticipatory, progressive, and innovative when it comes to serving the next generation of renters’ needs via technology in the multifamily housing market.”  

The next post in this series will discuss how home delivery has impacted high-touch living and how to manage the ongoing shift.   

   

 

The Shift from High-Touch to High-Tech

John Tamn

Author

John Tamn

I enjoy writing about real estate, property management, and PropTech. I live and work in New York City.