IT Providers Disappoint Multifamily Sector; 'Jetson' Apartment Not Quite Reality

DALLAS-The multifamily sector is cautiously waiting for high-tech companies to make good on early-on promises of exorbitant savings and streamlined efficiency.

“We’re definitely a little ways away from the Jetson apartment,” Steve Lefkovits, vice president of the National Multi Housing Council told GlobeSt.com. “It’s been a tremendous disappointment to the industry.” The council has just wrapped up a two-day Apartment Technology Conference in Dallas, where an estimated 600 owners, managers, lenders and IT providers had gathered to wrestle with the state of the industry.

The conference consensus is that IT companies need to collaborate and combine services to deliver on the promises that have been made to the multifamily sector. Lefkovits has been pressuring for bottom line accounting because he doesn’t believe the industry is as inefficient as many IT providers claim. And, he emphasizes, some – such as procurement services – need to step back and consider setting up a point of presence with brick-and-mortar wholesalers instead of developing a point-and-click replacement. “We’re talking about aggregating human behavior,” explains Lefkovits. “People have existing relationships … We have a very dynamic, competitive marketplace. I’d be shocked and amazed if the inefficiencies are still there.”

Last year’s optimism has faded, giving way to skepticism because too many promised products are still in development and roll-outs have been slow in coming. Many products, says Lefkovits, are still four to six years away from being placed into the marketplace. Meanwhile, the IT ranks are shrinking, with more expected to go out of business in the next few months as capital is exhausted and added funding fails to materialize. He estimates 50% to 75% of the IT companies across-the-board are suffering and broadbands in particular due to the market share under AT&T’s control.

Lefkovits says the IT providers attending the conference have blamed the complexity of the industry on slow product roll-outs. “It’s been an enormous undertaking,” he says.

It’s not just the IT procurement and leasing industry, but it’s been the broadband providers as well who have disappointed the multifamily sector. The problem is a shortage of skilled technicians to install the necessary equipment, which often takes longer than expected, and the cost. Lefkovits says it costs between $30,000 and $90,000 to wire an average multifamily building for broadband, with the average per unit cost now standing in the neighborhood of $1,000 at this stage of development.