Market Segments in the Multifamily Sector

Andrew Oh, John H. Reed, Nick Hall, Tom Talerico, and Jeff Riggert, TecMRKT Works LLC
Donald R. Dohrmann, ADM Associates, Inc.
Shahana Samiullah, Southern California Edison
Oscar Bloch, State of Wisconsin

Keywords

Abstract

The multifamily market has proven to be a particularly difficult market to penetrate with energy efficient technologies and practices. In general, the market has been treated as if it were homogenous and the assumption has been that split incentives are the major barrier to making progress in the market. This paper brings together the results of three studies, two from California and one from Wisconsin, both based on interviews and telephone surveys with owners and operators of multifamily facilities.

The research presented in this paper finds that the market is comprised of owners who manage their own properties and property firms that manage properties for others. There are at least four segments among these operators: the small operator segment, the medium operator segment, the large operator segment, and the large fee-managed operator segment. This paper describes the segments, the key decision-makers involved in the segments, the structures of operation, the criteria used in decision-making, and the opportunities and barriers for implementing energy efficiency in each segment. For example, in the small operator segment, capital and the availability of time act as barriers to implementing energy efficiency. For the large operator segment, a key barrier is the competition among worthy projects for capital and attributes other than cost and payback that tip selection to non-energy related projects.

This paper presents a new and powerful way of understanding the multifamily market that helps to set the stage for designing better and more effective programs addressing the multifamily sector.