Taking On Single Family Homes One Step At A Time

Apartment community living has long been viewed as the ugly stepchild when it comes to a choice for a home.  And it really shouldn’t come as a surprise as we have been on the losing end of one of the most effective, widespread “marketing” campaigns ever:  The American Dream.  Home ownership has always symbolized financial success and freedom, even being the requirement to vote in many societies!  Home ownership is also directly subsidized by our government through tax write-offs for mortgage interest – how are we to compete?

To a large extent, the multifamily industry has basically accepted its second tier status, even congratulating our residents when they choose to buy a home!  We can’t change (without some magic lobbying) the role the government plays in this, but my competitive spirit is driven crazy by this attitude that we can’t at least try to fight back!  But even in our own industry, I sense that people have no idea how we could possibly change the perception of apartment home living.  But there are actually countless examples of industries that you would never categorize as cool or chic that modify the public perception of them.  Answer this:  What is the other white meat?  I bet you know!  And the “Got Milk?” campaign has been one of the most successful ever.  Even recently, Toyota somehow made the minivan cool with their Swagger Wagon video:

Apparently, pork, milk, and minivans aren’t so horrible, after all!

Before recently, my argument that we should be competing on an industry level against single family homes had fallen on deaf ears, as if home ownership was a law of nature, an inevitability not to be bothered with.  But now I can see why my argument was so ineffective!  I was looking to the finish line rather than the incremental wins.  For example, take the domestic versus foreign car debate 10 years ago.  Domestics were floundering with their image, from reliability to fuel efficiency.  But they couldn’t just bring out one uber-car to suddenly change the public perception – they would need to chip away at it over time.

So what would it mean for us to chip away at the public perception of renting an apartment versus owning?  Imagine if we didn’t combat the end result, home ownership itself, but rather effectively delayed it for an average of one year across the board.  Would that make a meaningful impact on our industry?  According to the National Association of Realtors, there were an average of 2.4 million home purchases by first time buyers per year during the past decade.  Additionally, 75% of first time home buyers lived in an apartment prior to buying their home.  This means that by delaying the purchase of a home for just one year, we would add 1.8 million additional renters to the renter pool!  To put this into perspective, this represents a 10% in occupancy for every apartment community in the country. 

So while the apartment industry is a long way off to defining its competitive advantage and successfully demonstrating it versus single family housing, I believe we can make a meaningful change to our renter demographics by at least starting that competition! 

What do you think?