Profit-Driven Owners Must Consider Changing Demographics
January 5, 2017 | Globe Street
Part 3 of 3
According to a recent white paper, considering the priorities of renters in the new shared economy will create win/win scenario for both owners and tenants.
“Profit-driven owners would be well advised to take into consideration the changing demographics and priorities of renters in this new, dynamic, shared economy to create win/win scenarios for themselves and tenants. Owners must begin to think about the owner-resident relationship as a partnership that presents opportunities to create value for all concerned.”
Those comments are according to a recent white paper titled: Share and Share Alike, written by DHR International partner Sayres Dudley along with Jaja Jackson, director of global multifamily housing partnerships at Airbnb.
According to the white paper, 72% of Americans have used at least one kind of shared or on-demand service, and of that number:
- 86% believe that it makes life more affordable
- 80% believe that it makes life more convenient and efficient
- 78% believe it builds a stronger community
- 89% believe it is based on trust between providers and users
The paper says that home sharing services, such as Airbnb and VRBO, continue to grow in popularity, especially with those under age 45 and over 60. The report points to a survey by the NMHC, which found that more than a third of the leaders of the nation’s largest apartment firms are open to cooperative, codified partnerships with residents who want to list their homes on short-term rental sites. That same survey showed that 43% of those leaders have residents who are doing so.
“Conflict between tenants and owners around home sharing needn’t be a given. Many such tensions grow out of tenants’ reluctance to broach the subject with owners,” the report says. “Entering into active partnerships with tenants who want to participate in these services can eliminate stress for landlords, HOAs and tenants, and solidify relationships all around. Airbnb has created a property management tool called the Airbnb Friendly Buildings Program designed to support the community rules and execute a profit share that benefits the building owner, neighbors and resident hosts.”
The report says that owners who appreciate that participation in home sharing services will continue to grow can manage home sharing as an amenity, including establishing frequency caps and keeping a portion of those fees in exchange for the security, extra income and convenience enjoyed by the tenants. In addition, the report says that fellow tenants may be more receptive when they know that the process is being handled with respect for the needs of all parties involved, and they know which units will be occupied, when and for how long. “They may also be more comfortable knowing that there is a limit on how many units may be occupied by travelers, and more receptive to business travelers who will stay from a few weeks to a few months, as opposed to the weekend guest.”
On the workspace front, the growth of the gig economy is outpacing hiring overall, with work and living spaces converging to meet the needs of professionals, and not just millennials, the report says. “A Gallup study in 2015 showed that baby boomers are twice as likely to start a business than millennials. What both demographics have in common is that they seek, and are willing to pay for, housing and amenities that enhance a lifestyle that blends home and work in such a way that’s convenient for them.”
And with nearly half the population working from home, owners looking to proactively bring value-add to their tenant relationships would be wise to address the needs of these workers, the report says. “Providing office space, a conference room, a fax line, internet access, etc. to those tenants on either an as needed/fee per use basis, or unrestricted access for a monthly fee that would be well below the market rate for conventional office space, while it significantly enhances the work/home experience for the tenants.”