Smart Technologies Leading Multifamily Housing to Significant Energy and Water Cost Reductions

Multifamily housing is undergoing a transformation as owners and operators increasingly adopt innovative smart technologies to streamline costs. According to a recent report by Parks Associates, the latest research titled Growing Multifamily Value Through Smart Energy Savings indicates that multifamily dwelling units (MDUs) are achieving substantial savings, with energy and water costs reduced by 18-19%. This remarkable shift towards smart technology illustrates both the challenges and opportunities facing the multifamily housing market today.

With the economic landscape becoming increasingly complex, including rising inflation and a notable dip in population growth, property owners are seeking new ways to attract residents who are conscious of pricing. The report suggests that over a million new residential units were introduced to the US multifamily housing market in 2024 and 2025 alone. This surge in supply has placed downward pressure on rents, making it essential for operators to enhance their fiscal performance to maintain occupancy and appeal to cost-sensitive tenants.

An interesting finding from the Parks Associates survey reveals that 83% of multifamily residents either actively strive to cut down their energy usage or express a desire to do so but feel hindered by a lack of knowledge or time. This presents a clear opportunity for multifamily communities to attract renters interested in energy efficiency and sustainability. Properties that showcase advanced energy-efficient solutions can differentiate themselves from competitors, thereby enhancing their appeal to prospective tenants.

As highlighted by Kristen Hanich, Director of Research at Parks Associates, “Owners and operators are exploring new ways to improve their fiscal performance and appeal to price-sensitive residents.” This understanding has sparked a growing interest in incorporating smart technology, not only to attract potential renters but also to better manage operational efficiencies. Advanced technologies such as smart thermostats, humidity sensors, and leak detectors can significantly aid in energy management and cost reduction, allowing multifamily operators to enhance their bottom line while mitigating risks related to disaster damages.

Importantly, as the landscape evolves, the role of artificial intelligence (AI) is becoming crucial in refining these systems further. Hanich notes that as platforms mature, AI will be instrumental in making predictive adjustments and providing insights that exceed basic automation functionalities. This advancement positions property owners to harness the full potential of smart technologies, driving greater efficiency and compliance with rising regulatory expectations surrounding sustainability.

The introduction of platforms enhancing energy management aligns seamlessly with residents' preferences of living in energy-efficient homes. SmartRent, a partner in this research, emphasizes that leveraging emerging technologies not only meets current market demands but also prepares properties for future regulatory shifts. According to Braeden Scheer, Vice President of Product Management at SmartRent, “The report provides imperative insights on the increasing integration of smart technologies in multifamily housing and their role in energy conservation.”

The findings set the stage for discussions at major industry events, such as the upcoming Apartmentalize conference, held from June 11-13, 2025. This annual gathering, organized by the National Apartment Association (NAA), will serve as a platform for thought leaders and technology innovators to explore multifamily housing’s evolving landscape and the essential role smart technologies play in driving efficiencies.

In conclusion, the integration of smart technologies in multifamily housing showcases a critical evolutionary step in responding to economic pressures while meeting the needs of modern renters. With sustainable practices becoming a vital focus, it's clear that multifamily owners and operators who embrace these advancements will not only improve their operational efficiencies but also appeal to the growing population of environmentally-conscious residents.