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An amenities arms race heats up in the apartment industry

Renters are demanding more in apartment amenities these days. (Bill Crandall for The Washington Post)

Apartment living has changed in recent years. Gone are the days of shag carpeting and laminate countertops. Now renters demand hardwood floors and high-end finishes similar to what they would find in a single-family home.

They also want a wide-range of amenities in their buildings. Before an owner might have gotten away with a treadmill or two in a fitness center. These days, tenants are willing to pay top dollar for doggy grooming spas, full-time concierge services, indoor basketball courts and electric car charging stations. The Esplanade at National Harbor, a luxury apartment building in Maryland, offers an HD virtual golf simulator.

Amenities are a hot topic in the apartment housing industry. In some competitive markets such as the D.C. region, an arms race of sorts appears to be breaking out as buildings try to outdo each other with lavish features.

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To get an idea of what’s hot and what’s not in the industry, the National Apartment Association, an Arlington-based organization, recently surveyed its members across the country, as well as nonmembers, about amenities added or upgraded between January 2014 and September 2016. The results, which covered 100,000 individual units in 35 states, were intended to provide guidance to owners and operators on which amenities offered the most return on investment either through rent increases or higher occupancy rates. But it also gives the rest of us a sense of what’s popular in apartment living these days.

What NAA found is that half of the top 10 community amenities involve bringing people together, the community aspect of apartment living. Clubhouses and common areas for socializing made the top five, as did fitness centers, business centers and pet-friendly amenities. You see this trend playing out in the apartment buildings opening around the city. The units are smaller and the common areas are larger and designed for gatherings.

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“When you think about the new product that was built 20 years ago, even 25 years ago, you put in a pool, maybe you put in a fitness center and you might have a club room. That was pretty much it,” said Cindy Clare, chairman of the board of directors at NAA and president of Kettler Management in McLean. “Now we are much more focused on a lifestyle, what’s going to work for our residents. Our club rooms are much more open and multipurpose and they get used. It’s rare now when I go into one of our buildings where someone isn’t in one of the amenity spaces versus when I first started in this business and it was rare to see someone in the amenity spaces.”

Fitness centers ranked first among community amenities in the NAA survey, which was no surprise to Clare.

“People say, ‘Do we really need a fitness center? There’s a gym right down the street,’ ” she said. “But you do. I always say 100 percent of your residents think they are going to use the fitness center, only 10 percent will, but everybody thinks they are.”

The top in-unit amenities included washer, dryers, high-end kitchen appliances and hardwood floors. Pet-friendly amenities had the greatest impact on rent increases with the lowest cost to implement.

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The NAA compared its results to a study done by J Turner Research, which asked renters what they wanted in amenities. Fitness classes and walking trails ranked top three in their survey, but 16th and 13th place in NAA’s results. The differences between the two studies highlight the mismatch that sometimes occurs between what residents will pay for and what owners provide.

The survey also found differences in popularity among amenities across different markets. What is popular in one city may barely get noticed in another. Using Enodo Score data, NAA broke down by amenity its frequency in a market as well as the average rent premium it garnered. In Boston, 25 percent of the properties had a fitness center, allowing owners to charge a $66.93 per unit per month premium for it. In Colorado, only 13 percent of the properties had a fitness center and owners charged $22.04 extra in rent for it.

The survey has its limitations, including a lack of market coverage in a few major metropolitan areas. Much of the data relies on participants’ subjective opinions. But its findings are nonetheless worth noting. As the homeownership rate falls to near 50-year lows, the trend toward apartment living is growing. More people are choosing to live in an apartment and are demanding certain amenities. With more than half of the rental housing stock built before 1980, owners and operators are looking to update their properties and wondering what makes the most sense.

“In many cases with apartment communities, people do have choices,” Clare said. “We have to look at … what are the things that residents are willing to pay for and where you should spend your dollars if you are looking at renovations, what’s going to make your property more desirable.

“We think we’re building these things that people want, but this research helps really know what they want instead of just assuming we know,” Clare said.

To read more about the study, go to