New Trends in MF Rental Patterns

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NEWPORT BEACH, CA—Movement outside the core for affordability's sake and the perpetual need for micro-units are just two of the latest trends in multifamily, Daniel Gehman tells GlobeSt.com. As we recently reported, Gehman has joined Dallas-based Humphreys & Partners Architects as studio director for its Newport Beach, CA, office, where he will focus on business development and the conception of new projects. We caught up with him for a chat about trends he's noticing in the apartment sector. Also, don't miss Gehman speaking on the panel "Development, Decision Drivers and Demand Generators" during RealShare Apartments on October 21-22 in Los Angeles.

GlobeSt.com: What new trends do you see emerging in apartments and apartment design?

Gehman: There is a price-driven migration affecting a lot of people since Millennials can't afford to live in the core. They're starting to move and look at the first-tier ring of cities that is adjacent to the core. In these areas, you can't quite walk to everything, but you save 50 cents per square foot on rent. That's a big trend that's not going to reverse any time soon. It runs counter to values expressed by the planning or sustainability community, since it often involves getting people back in their cars so they can buy houses they can afford. There's an irony there. There are all sorts of neighborhoods that interest people that are not that close to the core. It won't take the pressure out of prices in the core, but there will be a whole second-tier cultural phenomenon of three or four podium buildings in one place. The question is, how much critical mass do you need to generate the things people like about the urban lifestyle so that they don't feel they're compromising? It's pulling a more enthusiastic vertical mixed use into the ring cities—there's some precious quality about vertical mixed use vs. horizontal mixed-use that makes it inherently urban.

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GlobeSt.com: In which types of markets does a dense environment work best? Worst?

Gehman: As you move out from the core, the definition of dense becomes different. It's really hard to do a podium building without the key elements of a livable neighborhood within a half-mile. You need these five elements to make a neighborhood: the bar, the market, the temple, the store and the street. The bar is the social gathering spot. The market is the marketplace or town square; it's a civic space. The temple is the house of worship, as there must be some representation of a place where the community gathers for religious worship. The store is self-explanatory. The street is the most important open space in the public realm—even poor folks enjoy a good street. As you move out of the core, you require some combination of those things to have a dense environment.

GlobeSt.com: What are some newer amenities you're seeing in the multifamily space?

Gehman: This isn't new, but it's something that's controversial: the dog run. Sixty percent of Downtown L.A. residents own dogs—that's a lot of dogs and they have their own ecosystem which, in an urban environment, is problematic. The charm of people having dogs is they go walk them and meet their neighbors—the dogs are super key in leading that. Owners usually pick up and dispose of the solid waste, but the liquid waste goes everywhere, and it's extremely problematic controlling the odor from a dog park—it's almost impossible. In the amenities arms race, if your neighbor building has a dog run, you have to have a dog run, but where do you put it? Near the pool? Near the fitness center? Near the front door? Wherever you put it, there will be people downwind. It can be chemically treated with an enzyme spray, but this still presents issues.

GlobeSt.com: What else should our readers know about apartment design?

Gehman: Within the box itself, tiny will never grow old—there will always be a market for tiny. The denser the urban environment, the bigger the market for tiny. We went through about a year of navel-gazing about micro units, but in super-dense neighborhoods, particularly near a college or entry-level job center, they are in demand. The HGTV show “Tiny House Hunters” underlines this trend. Some investors are even capitalizing on the trend of tiny in single-family dwellings of less than 200 square feet.