Great article, Brad. All good points. I’ve been thinking about family focused apartments for the past 10 years and am still struggling to figure it out. On the policy side, I would also say education is a huge issue for families with school aged children.
I’m an apartment asset manager and have quite a number of 2 and 3 bedroom units in urban buildings in Boston and NYC. The challenge we run into is that the renter pool for those units is not deep and is highly seasonal. Families with school aged children typically want to move during summer before the school year starts. When we get these units back in the off season, it can sometimes take 3-4 months and slashing rents to get them filled and it’s crushes your vacancy. $5 psf on a 1,000sf unit for 4 months has a huge impact on the rent roll. We obviously try to shore up our expiration schedule on those units but that doesn’t always protect you. I think the other challenge is that families tend to be the contingent moving out to buy homes so you can’t necessarily depend on them to be there for more than a couple of years.
Anither interesting development we’ve seen in our portfolio is the 2 and 3 bed units conducive to families in the suburbs throughout the Southeast have gotten extremely challenging to keep full because of the competition from SFR.
One key additional value that is missing from the list is the ability of an extra bedroom to significantly reduce the cost of childcare for families. In NYC, where the cost of childcare for a single child under 4 in daycare is $30,000/year (and hiring a private nanny legally is even more expensive), having an extra bedroom enables a family to hire an au pair. The federal au pair program is the most affordable form of childcare available for families with multiple young children. Yet in a city where 4 bedroom apartments are nearly non-existent and are not being built in the majority of new housing and where whole-home 4+ bedroom properties are financially out of reach for most, having an au pair isn't currently accessible to most families. Having access to more, large 3-6 bedroom apartments would make it significantly easier for many families to stay in the city and afford the help they need for childcare.
My ideal apartment: two levels, two baths, four bedrooms, plus office (with a window) and a den playspace. Current availability in Brooklyn/Manhattan: Nearly non-existent.
Great article, Brad. All good points. I’ve been thinking about family focused apartments for the past 10 years and am still struggling to figure it out. On the policy side, I would also say education is a huge issue for families with school aged children.
I’m an apartment asset manager and have quite a number of 2 and 3 bedroom units in urban buildings in Boston and NYC. The challenge we run into is that the renter pool for those units is not deep and is highly seasonal. Families with school aged children typically want to move during summer before the school year starts. When we get these units back in the off season, it can sometimes take 3-4 months and slashing rents to get them filled and it’s crushes your vacancy. $5 psf on a 1,000sf unit for 4 months has a huge impact on the rent roll. We obviously try to shore up our expiration schedule on those units but that doesn’t always protect you. I think the other challenge is that families tend to be the contingent moving out to buy homes so you can’t necessarily depend on them to be there for more than a couple of years.
Anither interesting development we’ve seen in our portfolio is the 2 and 3 bed units conducive to families in the suburbs throughout the Southeast have gotten extremely challenging to keep full because of the competition from SFR.
One key additional value that is missing from the list is the ability of an extra bedroom to significantly reduce the cost of childcare for families. In NYC, where the cost of childcare for a single child under 4 in daycare is $30,000/year (and hiring a private nanny legally is even more expensive), having an extra bedroom enables a family to hire an au pair. The federal au pair program is the most affordable form of childcare available for families with multiple young children. Yet in a city where 4 bedroom apartments are nearly non-existent and are not being built in the majority of new housing and where whole-home 4+ bedroom properties are financially out of reach for most, having an au pair isn't currently accessible to most families. Having access to more, large 3-6 bedroom apartments would make it significantly easier for many families to stay in the city and afford the help they need for childcare.
My ideal apartment: two levels, two baths, four bedrooms, plus office (with a window) and a den playspace. Current availability in Brooklyn/Manhattan: Nearly non-existent.