This research focuses on uptake of solar heating in small apartment properties, impact of building age on multifamily rents, the role of small apartments in workforce housing affordability and much more.

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Small Balance Mul,family
Research on ALEX Cha:er

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Uptake of Solar Hea,ng in Small Apartment Proper,es Slow 2
How Does Building Age Impact Mul,family Rents? 3
The Role of Small Apartment Proper,es in Workforce Housing Affordability 4
Rents in Small Assets are More Affordable than in Large Assets 5
Small Assets Cater to Families and Other Larger Households 6
Smaller Apartment Buildings are More Likely to be Located Outside the Urban Core 7
2
Table of Contents

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While large apartment assets and the general housing market are more likely to use solar hea,ng, the technology’s growth rate is the
fastest in small apartment assets.
$0.0
$2.0
$4.0
$6.0
$8.0
Small Asset
Apartments
Large Asset
Apartments
All Housing Types
2010 2014
Source: ALEX Cha:er, Chandan Economics, U.S. Census American Community Survey
Solar Energy Adop,on Across Property Types
Units Adop,ng Solar Energy Hea,ng per 10,000 Units
0.0%
5.0%
10.0%
15.0%
20.0%
Small Asset
Apartments
Large Asset
Apartments
All Housing Types
2010-2014
Growth in Solar Energy Adop,on
Average Annual Growth Rate in Units Adop,ng Solar for Hea,ng
Uptake of Solar Hea,ng in Small Apartment Proper,es Slow

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How Does Building Age Impact Mul,family Rents?
When it comes to apartments, general wisdom says that the newer the building, the higher the rent. This holds true un,l you reach the
‘prewar’ vintage, which can approach new inventory rent rates for smaller proper,es. This trend only holds true for small mul,family
proper,es. Asking rents for larger assets show steeper declines with age and only a slight recovery for the oldest structures.
$0
$400
$800
$1,200
$1,600
Before 1940 1940-59 1960-79 1980-99 2000-08 2009-14 2015
Small Asset Units Large Asset Units
Source: ALEX Cha:er, Chandan Economics, U.S. Census American Community Survey
Monthly Asking Rents by Age of Building
Year-over-Year % Change: 2014-2015

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The Role of Small Apartment Proper,es in Workforce Housing Affordability
Small proper,es already cater to a higher propor,on of workforce renters, with 72 percent of households at or below the 120% AMI mark.
Large proper,es, on the other hand, have roughly a 65% share of renters at or below 120% AMI. Keep in mind that this number is likely
lower, as the Census includes large, subsidized affordable housing developments in its apartment data.
0.0%
10.0%
20.0%
30.0%
40.0%
Small Asset Renters Large Asset Renters
Less than 60% AMI 60%-120% AMI Greater than 120% AMI
Source: ALEX Cha:er, Chandan Economics, U.S. Census American Community Survey
Monthly Asking Rents by Age of Building
Year-over-Year % Change: 2014-2015

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Source: ALEX Cha:er, Chandan Economics, U.S. Census American Community Survey
Rents in Small Assets are More Affordable than in Large Assets
Asking rents in the small asset market (5 to 49 units) had reached about $900 across all unit sizes. Compare that to $1,130 per unit for
large assets (50+ units) and $960 for the overall mul,family market.
While the emerging glut in the larger building inventory has placed some downward pressure on rent growth, larger buildings s,ll
command higher average rents.
$899
$1,130
$962
$0
$200
$400
$600
$800
$1,000
$1,200
Small Asset (5 to 49 units) Large Asset (50+ units) All Mul,family

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In terms of unit mix, large buildings are weighted to apartments with fewer bedrooms. In fact, 1-bedrooms account for more than half of
the inventory in proper,es with 50 units or more. That contrasts with small proper,es, which include more 2- and 3-bedrooms.
These mul,-bedroom units — which might cater to families and other larger households — account for more than half of all apartments in
small proper,es. On the other hand, 1-bedrooms account for 30% of the small property unit mix, compared with 52% for larger
proper,es.
Small Assets Cater to Families and Other Larger Households
Source: ALEX Cha:er, Chandan Economics, U.S. Census American Community Survey
Studio
7%
1
Bedroom
40%
2
Bedrooms
44%
3+
Bedrooms
9%
Small Building Unit Mix
Studio
12%
1
Bedroom
52%
2
Bedrooms
30%
3+
Bedrooms
6%
Large Building Unit Mix

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Source: ALEX Cha:er, Chandan Economics, U.S. Census American Community Survey
Smaller Apartment Buildings are More Likely to be Located Outside the Urban Core
Small apartment proper,es are rela,vely more suburban compared to large buildings, thus offering families larger spaces at greater value.
Nearly half (45 percent share) of the overall small property inventory in these markets is located within suburban metro neighborhoods. In
direct contrast, large property units are more concentrated in urban-core areas (principal ci,es), which comprise two-thirds of the total
inventory in this asset class.
55%
66%
45%
34%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Small Asset
Large Asset
Principal Ci,es Suburbs

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