IRVINE, Calif. - April 3, 2013 - According to award-winning national architecture and planning firm KTGY Group, Inc.'s Manny Gonzalez, AIA, LEED AP and principal, "It is no secret that the multifamily sector has been a bright star in the housing sector's recovery. The growth of the multifamily sector has been primarily driven by the millions of people that moved into apartments as the result of foreclosures. Also, with high unemployment, young, newly formed households postponed the purchase of a home and moved into apartments."
Gonzalez said that it was primarily the REITs and national apartment developers that were driving the construction wave. "Now, we are seeing more local and regional developers fueling the construction of apartment communities and we are redesigning several projects originally entitled as high-rise condos into mid-rise apartments in the more desirable markets where land is scarce. But, at the same time, we are starting to see more for-sale builders looking at multifamily sites and beginning to compete with the rental developers for dirt once again as the housing cycle continues to play out in its usual way," Gonzalez noted.
With the new building codes, and an increased acceptance of higher densities by city planning offices, densities are much higher than in years past, Gonzalez noted. Higher densities keep costs down -- for both the renter and the builder/developer. "Renters are willing to live in a smaller unit size, if the location is right -- near transportation, work, shopping and play. In high density, cost-prohibitive markets like New York and San Francisco, 'micro units' (such as 220 square feet apartments) are popping up, similar to those found in Japan and Europe," Gonzalez said.
"Relatively small and intelligent floor plans can offer flexibility and density to the most challenging sites, while still providing compact and efficient versions of the many amenities found in larger, single-family detached homes," Gonzalez noted. "Floor plans need to be more open, more functional and have flexible interior components like sliding walls and room dividers. High ceilings and floor to ceiling windows are used to create a feeling of spaciousness and a great connection to the outdoors. Building green (whether certified or not) is the new standard. Renters want sustainability but they don’t want to pay extra for it. They want an overall design that is sleek and contemporary (both the interior and exterior)," Gonzalez said.
"With smaller apartment sizes, renters still want to be able to entertain and socialize, so outdoor community lounge areas, outdoor kitchens, fire pits and fireplaces are popular. A membership-quality fitness center and a studio for yoga and/or pilates is key," said Gonzalez.
"As buyer confidence increases, and interest rates remain low, demand for-sale homes will continue to increase. Projects that were originally entitled as apartments are being converted to condos to address the shortage of available single-family dwellings," Gonzalez said.
"Converting parking lots into housing and mixed-use residential with subterranean parking continues to be a development favorite, especially in dense, urban markets. Also, transforming an office or industrial building into housing in downtown or emerging neighborhoods is providing Gen-Yers with a unique living experience near where they work and play," added Gonzalez.
According to Gonzalez, in the previous housing cycle, recovery began with apartments, then for-sale properties to a point where condos were in such high demand that developers bought apartment communities and converted them into condos. "The exit strategy for the apartment owners worked out well because the majority of units were two and three bedrooms, which could easily be converted to condos with an upgraded finish spec. I am not so sure it will work as well this time around because the unit mix is weighted more heavily on the one-bedroom side and the unit sizes are shrinking. You can certainly find a renter for a 300-square-foot micro unit because they can walk away anytime they want; but will developers be able to find a buyer for a 300-square-foot condo? And, as the job market continues to improve and Gen Y matures and forms families, the apartment owners are going to have to find a way to fill those units with someone," Gonzalez stated.
Gonzalez will discuss additional trends and the future of the multifamily sector at the Bisnow Multifamily Annual Conference West on April 11, 2013 at 4:00 p.m. at the Montage Beverly Hills in Beverly Hills, Calif. He will be joined by panelists Greg Sadick, Vice President, SL Residential, Snyder Langston of Irvine; Mollie Carmichael, Senior Vice President of John Burns Real Estate Consulting, Irvine; Daniel P. Gehman, AIA, LEED AP of Harley Ellis Devereaux, Los Angeles; Peter Lauener, Regional President, Southwestern Region of Intracorp Companies, Newport Beach; and panel moderator Alexandra Glickman, Area Vice Chairman, Managing Director-Practice Leader with Arthur J. Gallagher & Co., Pasadena.
Manny Gonzalez has more than 25 years experience in design, land planning and production of residential, retail, and mixed-use developments throughout the western US. With his strong interest in livable communities, he focuses on well-scaled, contextual architecture that shapes vibrant environments. Gonzalez has won numerous awards for his outstanding designs including Gold Nugget, Best in American Living, NAHB Best of 50+ Housing and Pillars of Industry, and recently received the LEED for Homes Multifamily Project of the Year for Primera Terra in Playa Vista, Calif.
Gonzalez serves on the Board of Directors for PCBC and is the Design Trends Forum Chair. He also sits on the Board of the National Multi Housing Council and the NAHB Multifamily Leadership Board. He has served as Chair of the AIA Housing Committee, and a member of the BIA Board of Directors and national committees for The 50+ Symposium and University of Housing. He has been featured in Builder & Developer’s list of Who’s Who in Homebuilding for many years and was honored with the SAGE “Person of the Year” by BIA Southern California 55+ Housing Council. Gonzalez has written and contributed to scores of articles on residential design and is the Editorial Advisory Board (EAB) Chair for 50+ Housing Magazine and is an EAB member for 50+ Builder Magazine. Gonzalez is based in KTGY's Santa Monica, Calif. office.
For more information, visit www.bisnow.com/pages/2013/bmac-west 
About KTGY Group
With 21 years in business, KTGY Group, Inc., Architecture and Planning, is a national award-winning firm providing comprehensive planning and award-winning architectural design services for residential communities, retail, hospitality, mixed-use and related specialty developments. KTGY delivers innovative solutions that reflect clear understanding of development, market trends and financial performance. Serving clients worldwide, KTGY maintains offices in Irvine, Oakland and Santa Monica, Calif., Denver, Colo., and Tysons Corner, Va. See www.KTGY.com .