Several years ago, some might have concluded that suburban, garden-style apartment communities were on the wane.
I've always been a believer in this product type, but there was a lot of talk about the growing popularity of high- and mid-rise apartments in infill locations.
Now, as the pandemic has caused many to rethink where they want to live and working from home has moved into the mainstream, it's clear that garden-style communities are projected to experience robust demand now and into the future.
My goal is not to compare mid- and high-rise communities to garden-style. Each one has its merits, and the choice comes down to the style of living and community an individual or family prefers. What I want to focus on is why so many residents are gravitating toward garden-style and how this segment is growing in strength.
Garden-style communities - along with apartment properties in general - are experiencing some of the lowest vacancy rates in their history, and construction is struggling to meet demand.
In the past year, the United States has absorbed over 600,000 apartment units, which is more than twice the average of the previous five years. Developers were only able to deliver 270,000 units last year, and all of this has resulted in rent growth and a record-low national vacancy rate of 4.6%, according to CoStar.
Meeting the needs of the moment
Since the start of the pandemic, many renters have clearly preferred to live in less densely populated areas and in apartments with bigger floorplans. That describes garden-style communities to a tee.
But these communities will always exert a strong appeal for a large number of renters - pandemic or no pandemic - because of the quality of life they provide. Garden-style properties offer a feeling similar to living in a single-family home: unlike in a high- or mid-rise, residents can open their front door and go right to a greenspace, a dog park, a playground or an outdoor pool. The sizes of the units are more comparable to a house.
For families, garden-style communities provide kids with plenty of space to be outdoors and play with their friends. And they typically are located in areas with excellent school districts - another major appeal for families that can’t yet afford to take the homeownership plunge.
The growing trend of remote work is another reason garden-style communities are poised for a strong future. During the workweek, millions of people now spend close to 20 hours a day in their homes and therefore prefer the larger apartments found in garden-style properties. Moving forward, these communities are likely to feature even larger floorplans to accommodate renters who need ample space for both their home and work environments. And they’ll need to have common work areas that balance residents’ ambition to get out of their homes with their desire for privacy and safety during the pandemic.
At Ashcroft’s communities, we’ve added pod-like amenities in our business centers. These are small, quiet spaces where our residents can work, be on conference calls and not feel like they’re putting themselves at risk of catching COVID.
Another trend that bodes well for garden-style demand is that people are flocking to the states and metros in which these properties are prevalent. Populations in Sun Belt states like Arizona, Texas, Georgia and Florida are growing as people seek the lower cost of living and higher quality of life that these areas offer. Garden-style communities help provide that quality of life.
Add these factors up, and one can easily conclude that garden-style apartments will have enduring appeal to residents and will continue to be sound investments for the immediate future and well beyond.