More Roommates, Fewer Spots: Today’s Multifamily Parking Challenges
The multifamily sector could face a significant shock in the coming months. Despite the persistence of high rental prices, numerous renters are foregoing home ownership due to the challenges, stress and expense of buying. This confluence of factors raises the likelihood of more households with roommates in multifamily communities. It also increases the risks of financial challenges for owners, particularly in regards to parking.
Although it has traditionally been a facet of multifamily, cohabitation and co-living agreements are experiencing a resurgence. Following a substantial drop during the pandemic, the industry has seen a noteworthy 5.9% increase in people choosing to have roommates over the last couple of years.
One of the challenges looming with this uptick in co-habitations is the effect on a community’s parking infrastructure. An increase in inhabitants per unit may increase the number of vehicles per unit, likely crushing parking ratios. This comes at a critical juncture when metropolitan areas are now actively addressing the housing crisis by reducing parking space requirements to allow developers to construct more units.
All of these challenges are significant if insufficient parking management creates frustration among residents. Nobody enjoys circling the lot at the end of their day, searching for a spot. More people vying for fewer spots increases the likelihood of unhappiness and tensions among neighbors and property teams, eventually cascading into heightened expenses and decreased productivity.
Disgruntled residents are less likely to renew their lease, and their departures drive up turnover costs, which averages about $4,000 per unit. When they aren’t directly voicing their displeasure to the leasing team or searching for a new home, they turn to Google or other review sites where one-star reviews of parking inadequacy are more frequent than any other amenity.
This surge of negativity influences overall reputation scores, making it more costly to obtain quality leads and fill vacant units with a minimum of vacancy loss. To counter this, owners must increase marketing spend, which then impacts net operating income (NOI) significantly.
In addition to property teams fielding complaints and chasing leads, they must devote valuable time to tracking down and addressing violators, as well as contacting tow companies to assist with rectifying some situations. These time-consuming tasks divert their attention from the tasks designed to increase revenue and build a strong community, creating an additional hit to NOI.
The solution to these challenges is to ensure that each community has an adequate system to properly manage their parking situation, preferably one that requires little to no time requirements for onsite associates. Automated parking solutions provide communities with the ability to open up available spaces for residents or their guests with scalability not available or feasible with other parking management options.
This shifts the power of parking to the residents themselves, allowing them increased flexibility over when and how they pay for parking as well as flexibility for space management for operators. By allowing them to make these decisions on their terms, residents are happier, preferring this option to fees that are imposed by operators.
The evolution of parking and continuous economic fluctuations are inevitable and many additional changes are on the horizon. However, solutions that adjust to these modifications, regardless of what occurs, are already here. Regardless of how many occupants there are per unit, owners and operators have avenues for protecting revenue by maintaining resident satisfaction and reputation.
Source: Multifamily Insiders
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