U.S. Temporary Living Challenges: What You Need to Know (Part 2)
Like many aspects of global mobility, we continue to see an increase in the need for temporary living and long-term rental solutions. Here we provide an update to our first blog on the topic, U.S. Temporary Living Challenges: What You Need to Know, taking a more detailed look at the current trends impacting the temporary living market and key recommendations that organizations can follow to help reduce the impact on mobility programs.
Current Market Trends Impacting Temporary Living Services
There continues to be pent-up demand for corporate housing. The accommodations for talent mobility, travel, and relocation have never been under as much pressure as we see today. Increasing rates, limited availability, work from home options, and millennials entering the homeowner market are all contributing factors. How did we get here? It starts with the shortage of new homes on the market today, but the root cause goes back much further.
The new construction of the types of buildings typically used for corporate housing has been declining nationwide since 2007. Additionally, many property owners for existing buildings are no longer renting to corporate housing companies or they are significantly limiting the number of apartments available for corporate housing. Many property owners are no longer offering short-term leases, and we have seen large rent increases across the U.S.
Since the COVID-19 pandemic, companies are struggling to hire workers in many sectors, including the corporate housing industry. Due to the various labor shortages, many companies cannot keep up with the demand for the manufacturing and delivery of goods and services (furniture, lumber, building materials, etc.). This limits the ability to deliver fully furnished, move-in-ready units for corporate housing. It also drives up costs by over 15%, according to National Corporate Housing.
In addition, over the past three months there has been a significant increase in travel, with levels trending to pre-pandemic levels. This is also contributing to the shortage of available temporary living units.
Although we anticipate these challenges are temporary, they will continue for the near future; this means that the need for proper planning, flexibility, and partnership has never been more important.
Thank you to our supplier partner National Corporate Housing, specifically Julie Rice, Senior Global Advisor, Strategic Alliances—Global Mobility, National Corporate Housing who provided current market trends information for this post.
- When searching for a property, we recommend employees make a decision quickly, preferably in hours instead of days, and within one hour in very competitive markets.
- Organizations should work closely with their relocation services providers to keep up to date with local market trends in the locations they are sending employees.
- Flexibility is key when searching for temporary living accommodations. The more challenging the request (e.g., “three-bedroom property within a specific commutable distance school district”) the fewer choices available. The best property options can sometimes be returned during the first round of sourcing, and then sourcing suitable properties for a second or third time may artificially inflate demand. This results in less desirable property options, as well as frustration for the relocating employee.
- Where possible, booking a longer lease on a property may ensure more options (including longer term Notice to Vacate from 14 days to 30 days and/or matching lease terms) and better rates overall. Organizations with significant volume into the same location may consider block-booking temporary accommodation (i.e., renting a block of units and moving employees into the accommodation on a rotational, short-term basis). This helps to reduce cost and guarantees availability.
Find Out More
Download our Mobility Supply Chain Guide to find out the specific challenges impacting the wider industry, what Cartus is doing to mitigate them, and key recommendations to help companies reduce the impact these challenges have on their relocation programs. Our guide looks specifically at:
- Destination services
- Temporary housing
- Rental assistance
- U.S. household goods
- Global household goods
Look out for more blogs over the coming weeks, which will deep-dive into specific areas of supply chain and the innovative solutions we are providing to help clients navigate the current challenges. Read our previous posts:
Cartus will continue to work closely with our supplier partners to ensure we minimize the impact this situation may have on our clients and their relocating employees.