Once desirable by multifamily owners and operators as a differentiator for their communities, electric vehicle charging stations are now a necessary amenity and demand is expected to increase dramatically.
Electric-vehicle sales are expected to surge due to incentives contained in the Inflation Reduction Act. According to Cox Automotive, sales of EVs jumped 66.4 percent between the second quarter of 2021 and the second quarter of 2022, despite an average EV price in June 2022 of $66,000, well above the industry average.
More important to apartment owners and managers, however, is data in the 2022 NMHC/Grace Hill Renter Preferences Report, which found that 27 percent of respondents were interested in electric car charging stations, up from 25 percent in 2020. The respondents also said they would pay more in rent for this amenity–an additional $28.12 per month.
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“We know the wave is coming,” said Jill Brosig, managing director & chief impact officer for Harrison Street, which recently announced a partnership with Xeal, a provider of EV charging stations, to install more than 300 stations at select senior housing, student housing, life science and medical office properties in California, Massachusetts, Texas and Virginia. “We want to make sure we have the EV chargers in place to meet demand.”
Planning to add EV charging stations or increase the number you already have? Here’s what you need to know.
Familiarize yourself with different vendors
Brosig said that Harrison Street decided to partner with Xeal because of the company’s unique charging platform, which uses encrypted tokens and distributed-ledger technology for communication, thereby eliminating the need for installing IT/network infrastructure in the parking lots or garages. “It allows you to charge if you’re not connected to the Internet, like in a subterranean garage,” she said.
Harrison Street recently completed the installation of 52 chargers at The Lyndon, a 515-bed student housing project in San Marcos, Texas. Other amenities at the community, which serves students at Texas State University, include study suites, indoor and outdoor fitness centers, a pet park, a recreation room and a pool.
“Our clients purchase the chargers from us, and they come with a five-year warranty, all the software and the connectivity protocol,” said Regan Hartley, Xeal’s vice president of sales. “There are no ongoing costs past that.” She said the charges have a useful life of five to seven years.
Another EV charging station consultant and provider, which has a different business model, is Refuel EV Solutions. “We host and pay for the charging stations and the electrical upgrades,” said REVS Founder & CEO David Aaronson. “Our goal is to own and operate charging stations on multifamily properties. If we can’t do that, we will manage and operate them for the owner.”
One recent installation isThe Monterra Apartments, a 256-unit community in Austin. Aaronson said the total cost incurred by the owner was $16,500, which included a dual charging station with a tri-pedestal, cable management and upgrading the electrical service to 100 amps, with 50 feet of trenching and laying conduit.
“The owner wanted to own these,” Aaronson said. “They started with two stations. We monitor the usage, and when they need more, we will know about it and can install them to meet demand.” The owner of the property pays REVS a network fee of $360 per year plus 8 percent of revenue from the chargers.
Plan for the future
While just one charging station was installed at Monterra—to start—many communities host multiple stations to meet expected renter demand. Hartley recommends that clients utilize a 20 percent allocation, while Cassandra McFadden, vice president of sustainability for Bozzuto, recommends that 10 percent of parking spaces be converted. “The actual number will range, based on owner appetite, what incentives there are jurisdictionally and other factors,” she said.
Aaronson said it’s key for those planning to own or operate apartment communities to know the property’s capacity for hosting EV charging stations, and he recommends that an evaluation be done by an electrical engineer as part of the due diligence before purchasing any community.
“Putting up one or two EV chargers in a property of 300 units is not solving the problem, nor is it addressing the opportunity,” he said.
Michael H. Zaransky, managing principal of MZ Capital Partners, said that he plans for EV charging stations pre-construction. “Planning for the underground work during the site work stage saves a whole lot of money,” he said.
Zaransky uses a 5 percent ratio for EV charging stations, so in a 100-unit building the firm will include five stations. But he also plans for the future. “We’ve also been stubbing in power for additional charging stations,” he said. “We’ve found that there are renters in the market that will only select a property with a charging station available. As more renters have electric cars, it will be one of those must-have amenities.”
The company is currently building Vantage at Gregg’s Landing, a market-rate community in Mundelein, Ill., that’s slated for completion in 2023. The community will have seven EV charging stations initially, but the property will be wired underground to add up to 20 more.
Charge for the service
Zaransky said he currently provides EV chargers at no cost to residents. Instead, he said the chargers give his communities a competitive advantage. “Sustainable features are a distinguishing characteristic that older properties do not provide,” he added. “We use the features in our marketing materials and believe we command a premium in rents because of it.”
Hartley, on the other hand, recommends that its clients charge per kilowatt hour at a 3X markup, so apartment owners who pay 10 cents a kilowatt would charge residents 30 cents per.
According to Aaronson, he’s working with several properties that aren’t charging residents and are having problems as a result since some residents are hogging the spaces. “The standard resident comes home from work, parks their car and wants it charged in the morning,” he said. “If you don’t charge for the space, they will park there and leave the car there all night even if they just need 20 miles of charging, which can be done in one hour.”
