How to support a ‘nation of renters’: lessons learned from the US07 Dec 2017
DV’s Development Directors Karen Cowden (Precincts) and Rob Stopajnik (IH&L) recently attended a two-week study tour of the US focussing on the ‘Build to Rent’ model of development.
Joining 28 other delegates from the likes of Ernst and Young, Mirvac and RMIT, Karen and Rob immersed themselves in world class urban renewal projects in Seattle, San Francisco and Los Angeles, gaining new insights into how modern cities can enhance their housing supplies and meet the needs of future populations.
Urbanisation in global cities is booming. According to industry experts in the US, population growth, increased mobility and the rise in the number of people living alone, combined with a reluctance to enter the property market following the GFC, has resulted in renting being increasingly favoured over home ownership.
The evolution towards a ‘nation of renters’ has propelled the popularity of ‘Build to Rent’ style developments (or ‘Multifamily’ as they are known in the US). A concept which emerged in the US in the 1940s, Build to Rent housing structures create flexible, secure, hassle free living for renters, while also incorporating shared amenities and services.
One great example is The Pierce development in San Jose (pictured). Built by the Sares-Regis Group, the 232-apartment building was previously an auto repair shop and tyre store. With their millennial target market in mind, the complex design features a fitness centre, club room, pool and rooftop lounge, bike maintenance area, theatre, digital package lockers, resident events and six full time staff members. The building also allows pets, although they – like their human owners – need to pay their way, with $50 per month put towards ‘pet rent’! All dogs must also undergo DNA testing to make sure they are accountable for any unwanted deposits!
As Sares-Regis points out, ‘people don’t choose the apartment, they choose the building’. With the occupancy level for The Pierce sitting comfortably at 95%, we can clearly see that if people feel happy in the building, they will stay.
While Build to Rent could be associated with the mobile, short term lifestyle favoured by US populations (i.e. university and retirement villages), it is not without its benefits. The model is increasing the supply and diversity of new housing, building stronger and more connected ‘mobile’ communities, and delivering world-class residential assets that encourage investment.
Within the Australian context, however, Build to Rent housing will encounter several key challenges, the main one being the need for greater government commitment – as this model requires subsidies in property and tax, as well as a certainty of affordable finance. We will also need to encourage a cultural shift from the traditional emphasis on home ownership towards a more ‘renter friendly’ mindset.
Place making is all about taking risks, however, and this is increasingly important when we consider the predicted population growth for Victoria over the next 30 years. The question is, are we, as planners, up to the challenge?