Future-proof Your Property: Get Charging

Having EV charging stations on your property will help you gain a competitive advantage and boost your appeal to a growing segment of residents.

By DAVID AARONSON, Refuel Electric Vehicle Solutions

It’s no surprise that property management teams are beginning to receive calls from potential residents asking if their property has electric vehicle charging stations. EV adoption in the U.S. is progressing far more quickly than expected and the multifamily industry is becoming well aware of this latest trend.

Houston is ranked as one of the major cities seeing a significant rise in registrations for electric vehicles, followed by several other cities in California, Arizona and Illinois. According to data from the Texas Department of Motor Vehicles Registration, around 23,000 electric vehicles were registered in Harris County as of January 2023. Building codes are being updated nationwide for new construction as the multifamily sector will provide a sizable portion of the EV charging infrastructure.

These updates may require developers to incorporate design plans to develop the infrastructure necessary to support EV charging stations. The good news is, unlike most items typically required by building codes, installing EV charging stations will provide property owners an opportunity to develop a new revenue stream and provide a positive return on the investment if done correctly. Deploying charging stations is also much cheaper if the property is under development with proper infrastructure plans set in place during the design phase.

Why Invest in EV Charging?

Until adopted building codes require all new developments to satisfy the future EV charging infrastructure demand, developers will continue to build projects with functional obsolescence, costing the prospective owners and investors millions of dollars to cure. The biggest impediment to widespread charging infrastructure availability on multifamily is cost. The costs associated with EV charging infrastructure include charging equipment, ongoing operation and maintenance costs, and installation costs needed to get power to the charging station sites. However, the benefits of installing charging stations on your property outweigh the initial costs.

The increasing demand for charging stations makes it a profitable investment that provides an accretive new revenue stream that can be underwritten into the property level pro forma returns, offsetting the up-front infrastructure cost. A common misconception is that residents can simply charge their EVs at a nearby public location. Yet 80% of EV charging happens at home, according to the U.S. Department of Energy. As a multifamily owner, you know that resident retention is vital to the success of your property. Attracting or retaining just one resident justifies having charging stations available for your residents to use.

Renters have demonstrated a willingness to pay a premium over the electricity cost, generating additional income for the property owner. According to Multifamily Executive Magazine, more than 58% of renters are willing to pay more to live in a community with EV charging stations on site. If your property doesn't have this amenity, you'll lose EV-driving residents to a competitor that offers the convenience of recharging their car at home.

The Problem with Existing Properties

Despite mandatory building codes, the real issue is what to do with existing multifamily properties. To keep up with competition and demand, property owners must find ways to develop EV charging infrastructure.

Most multifamily properties were built without the electrical infrastructure to support the future EV charging station demand. According to the National Multifamily Housing Council, Texas had over 2.2 million apartment units by the end of 2021. Based on the average number of parking spaces per unit and occupancy rate, more than three million vehicles are currently parked on multifamily properties in Texas.

Existing properties could incur hundreds of thousands of dollars in costs to upgrade their electrical infrastructure because they often have limited to no additional electrical capacity to supply electricity for EV charging stations. Older properties generally need electrical upgrades to support EV charging stations. As the industry is still in its infancy, most architectural and consulting engineering firms that developers traditionally look to for support do not possess the knowledge and experience to help address these issues.

Partnering with an outside firm with background knowledge in EV charging and commercial real estate is recommended. Property owners should also be wary of relying on manufacturers or vendors for advice because they generally lack a background in the multifamily industry. The primary goal of a manufacturer is to sell as many charging stations as possible to cover network fees, which may result in having an excessive number of stations.

Transitioning to Cleaner Energy Together

Multifamily property owners are beginning to receive more assistance in grants and rebates for EV charging stations. Various financial incentives are available that early adopters can apply for through utility providers and federal, state and local funding programs. You can apply to see if your property is eligible for these incentives to help alleviate the cost of installation.

Consumer preferences and major automobile manufacturers are also working in favor of EV adoption. Traditional automakers have added a variety of EVs to their lineups, with many more planned. For example, General Motors says 4050% of U.S. sales will be EVs by 2030 and that they aspire to sell only electric passenger vehicles by 2035.

Although the initial costs may seem intimidating, the inability to match the growth in charging infrastructure with the number of residents interested in owning an EV will negatively impact investor returns. There's no doubt electric vehicles are here to stay, and future-proofing your property to accommodate EV-driving residents comes with many benefits. Having EV charging stations on your multifamily property will help you gain a competitive advantage and boost your property's appeal to the growing segment of residents who have or plan to purchase an electric vehicle.

David Aaronson is the founder and CEO of Refuel Electric Vehicle Solutions (REVS), an EV charging consulting, management, installation and ownership company exclusively serving the multifamily industry. David founded REVS to help real estate owners capitalize on the impact the transition to electric vehicles will have on their properties. Prior to forming REVS, David enjoyed a successful career in the commercial real estate banking industry for over 40 years. During his tenure at Grandbridge Real Estate Capital and CBRE, David arranged debt and equity capital for commercial real estate investors and developers throughout the U.S. David is originally from Houston, TX, and graduated with a B.A. in Real Estate Finance from The University of Texas at Austin in 1980.