5 steps to determine if EV chargers can help attract renters
Seeing more Teslas and other electric vehicles on the road? It’s not your imagination: EVs’ popularity is booming. EVs made up 7.6% of U.S. passenger vehicle sales in 2022, but they’re expected to account for nearly 28% by 2026, according to BloombergNEF’s 2023 Electric Vehicle Outlook.
All those new EV owners will need convenient charging options — and if they’re renters, it’ll impact their leasing decisions.
“Most people who buy EVs want to charge at home,” says Bill Peterson, Executive Director and equity research analyst specializing in Clean Tech at JPMorgan Chase. “I think charging stations are going to be a must-have in multifamily.”
Does that mean you should look into adding EV chargers to your apartment properties? Take these five steps to find out.
Step 1: Assess the demand — do renters want EV charging?
Surveying residents can help you get a feel for their interest in EVs. In addition to asking renters what type of car they currently drive, Deana Haynes, director of commercial real estate at EV charging provider ChargePoint, recommends asking whether they plan to purchase an EV in the next six months to a year.
“It provides some insight into the future so you know how to plan,” she says.
Worried about investing in chargers that’ll eventually become outdated? High-powered chargers designed to quickly top up a car’s battery in a public setting, like a shopping center, have certainly seen meaningful upgrades. But chargers typically used in multifamily buildings are designed to fit the electric output of typical home outlets, which haven’t changed in decades, so there’s less risk new tech will make them obsolete, Peterson says.
Step 2: Evaluate feasibility, costs of adding EV charging
The cost of installing EV chargers can vary significantly from one property to another. Installation costs typically exceed the cost of the chargers themselves, says Eric Broughton, CEO of EV charging provider OK2Charge.
Consult an electrical contractor to figure out whether your building’s electric panel has enough capacity to support EV chargers, Haynes suggests. Adding extra capacity often significantly increases the project’s cost.
Another major factor in installation costs is the distance from the electric panel to the parking spaces where chargers will be installed. The farther the electrical conduit needs to travel, the more costs add up, especially if you need to run it underground, Broughton says.
Not every parking spot would need to be outfitted with a charger right away, especially if your property has parking spaces that can be turned into shared EV charging stations. But it’s smart to build out the electric infrastructure that’ll let you easily expand the number of chargers as demand grows, says Susan Vickery, principal and apartment development and management consultant at Texas-based Caryatid Consulting.
Considering EV chargers for a new development? It’s typically cheaper, since the building’s electric capacity and parking layout can be designed with charging in mind. Some cities, including Chicago and Salt Lake City, require new multifamily buildings to include infrastructure needed to support EV chargers.
Step 3: Consider EV charger options for apartment properties
Electric vehicle chargers come in three levels with varying charging speeds, according to the U.S. Department of Energy:
- Level 1: approximately 5 miles of range per hour of charging
- Level 2: approximately 25 miles of range per hour of charging
- DC Fast Charging: more than 100 miles of range with 30 minutes of charging
Level 2 chargers tend to be the best fit for multifamily properties, particularly when chargers are shared, Vickery says. Depending on your location, a car plugged into a Level 1 charger overnight might not get enough juice to cover a full day’s commute. But Level 3 chargers, which are most commonly found at public charging stations, tend to be overkill for home charging and can be significantly more expensive, Haynes says.
Speed isn’t the only factor to consider. Some chargers have features that can help manage operational issues, like maintenance problems that leave chargers offline and unusable, though they typically cost more than entry-level chargers, Vickery says.
Here are questions to ask as you evaluate options:
- If you only want your residents, or specific residents, to use the charger, can you control access?
- Can the charger bill drivers for the energy they use?
- What sort of maintenance is required, and can the charger alert you to problems?
- Can the charger notify residents when their vehicle’s battery is full?
Step 4: Look for EV charging incentives to cover costs
Depending on where your property’s located, you might qualify for programs that can help offset EV chargers’ cost. For instance, the Inflation Reduction Act provides tax credits for EV chargers installed in certain census tracts. State and local governments may have their own programs: Seattle, for instance, offers multifamily owners free EV charging advisory services as well as incentives that can cover all or a portion of the cost of chargers depending on the property type, charger level and whether parking spaces are shared or personal.
EV charging providers can often share information on available incentives, says Vickery. Research options in your area before committing to a charging solution, as the programs’ requirements might impact your choice, Haynes says.
Step 5: Choose a payment model to cover EV charging
If you install EV chargers, you’ll have to decide whether to pass on the costs to residents — and if so, how to go about it.
Some multifamily investors offer EV charging as an amenity rather than passing on the costs of electricity. Faced with a choice between more expensive EV chargers capable of billing drivers for their use and a lower-cost model that can’t charge drivers, Dale Howey, owner of Green Rock Apartments in Minneapolis, opted to buy more affordable chargers and forgo fees. He has 30 chargers as his properties as part of a broader focus on sustainability. Though only 13 of Howey’s 162 renters currently have EVs, he expects demand to grow. The charging stations also fuel his staff’s electric vehicles.
“You have to have the infrastructure to encourage adoption,” he says. “If you build it, they will come.”
While charging remains free, Howey has stopped offering rent discounts to residents who purchase EVs — the perk got too popular, he says.
Other property owners charge a fee based on the amount of energy consumed or time the charger was occupied, or set a fixed fee for access to a charger. Renters are typically willing to pay for the convenience of charging at home, as long as the cost is similar to that of nearby superchargers, Broughton says.
“It’s nice to be green, but you don’t want to go into the red,” he says.
By Lauren Zumbach from Story by J.P. Morgan