When the Morgan Group started installing WiFi access points in the common areas of its club houses and pools four years ago, it was slightly ahead of its residents in providing the amenity.
“A lot of the laptops that were in play at that time didn't have WiFi cards to pick up the signal,” says David Hannan, senior vice president of property management for the Houston-based developer of luxury multifamily homes. “You either had to go out and buy one, or sometimes, your landlord would rent you one. Today, there's not a laptop made that doesn't have that card in it.”
For Hannan and the Morgan Group, that evolution in technology translates into a new challenge: bringing WiFi directly into residents' apartments. “The idea of coming home and getting on a desktop computer is rapidly going away,” Hannan says. “People are coming home with their laptops, and they want to sit on the couch and [get online]. We [as an industry] may still look at WiFi as some unique anomaly. But the reality is that it's becoming an everyday necessity.”
As WiFi becomes a bigger part of public life in general, with easy, wireless Internet access now common at coffee shops, airports, and hotels, multifamily operators say more residents are beginning to see it as a must-have at home as well. In common areas, it's already a given. “In New York, people just sort of expect it,” says David Picket, president of the Gotham Organization, which owns and operates more than 1,300 luxury apartments in New York City. And even if your residents aren't clamoring for WiFi in their units yet, “it won't be long before they do,” says Martha Carlin, executive vice president of operations at UDR, a Richmond, Va.-based REIT.
Yet, while multifamily companies start to explore the possibilities of providing WiFi access points directly inside apartments, universal, in-unit access still has its challenges. Those include costs, as well as the technical hurdles of making sure WiFi signals penetrate steel-reinforced walls, or in some cases, don't interfere with other devices such as cordless phones. Much of that may soon be changing, though, as multifamily WiFi technology becomes cheaper, more robust and easier to install.
HANDLING THE HURDLES Industry pros say installing and paying for WiFi infrastructure has become progressively easier the last few years. “Just like we've seen with the cost of data storage, the cost of WiFi—and the number of access points you need for a large building—are way down,” says Herb Hauser, president of New York-based Midtown Technologies, which specializes in technology deployment in residential, hotel, and resort settings.
Hauser pegs per-door costs for setting up in-unit WiFi between $20 and $40 per door; higher estimates approach $100 per door. That's not small change for operators with tens of thousands of units nationally, but observers say the cost can be offset, or eliminated, by entering into co-marketing agreements with service providers who are only too willing to outfit your buildings, if you tout their services to your residents.
Still, even if you have to pay for the capital expenditure of setting up a WiFi network, the alternative could prove to be even more costly. The reason, experts say, is because if you don't provide your residents with some sort of WiFi infrastructure in your community, they'll go out and get it themselves. Whether it's a Linksys wireless router they purchase at Best Buy or a D-Link unit they find on eBay, multifamily operators say residents will find a way to set up their own wireless access points inside their apartments. The problem, of course, is that the signals from these homespun networks don't stay inside their apartments; they often leak into the neighbors' as well.
“Imagine having 45 Linksys routers serving up 45 wireless networks, all named ‘Linksys,' in one building. How do you know if you're connected to yours or your neighbors?” says Richard Holtz, CEO of InfiniSys, a multifamily technology consultant based in Daytona Beach, Fla. “If you have that many people with different WiFi systems in one building, it's going to conflict. Unmanaged WiFi in high density doesn't work.”
Case in point: At one of InfiniSys' large university clients, students were unhappy with the speed they were getting from the university's community WiFi system. Their solution? To buy their own Internet access through the local cable provider, then broadcast it with store-bought wireless routers. With more than 4,000 beds on site, the problem quickly grew out of control. “Now, there are more than 800 rogue access points at the property, and nothing's working,” Holtz says.
Multifamily operators can overcome those headaches by contracting with wireless service providers that manage residents' access. Doing so allows owners to take themselves out of renters' crosshairs, should they become frustrated by any technical difficulties that may arise. They also avoid any security issues related to residents running their own, unsecured networks. For example, some operators who provide WiFi to residents write provisions into the lease agreements prohibiting outside routers, according to Holtz. “Since they are already providing it, they can put into the lease addendum that they don't allow rogue access points,” Holtz says.
THE BIGGER PICTURE Multifamily professionals believe that while technology will continue to advance, in-unit WiFi will not become obsolete. For instance, they're not worried about the city-wide, municipal WiFi nets that have been making headlines lately. As is often the case with cell phone signals, tech experts say those networks will have trouble penetrating the core of your building. Speed, reliability and maintenance of those systems are also often cited as stumbling blocks.
“City-wide nets are trying hard to get off the ground, but we still haven't seen any extraordinary success stories,” says Frank Matarazzo, president and founder of Hawthorne, N.J.-based MSTI Holdings, which deploys and runs wired and wireless networks for multifamily clients. “We painstakingly do onsite surveys to make sure that we have got penetration in even the smallest nook and cranny of the building.”
At Clifton, N. J.-based Value Companies, which owns and manages more than 3,500 residential units in New Jersey, New York, Pennsylvania, Texas and Florida, executives were able to partner with Verizon to get the firm's high-speed FiOS fiber optic Internet service installed at three of its communities in northern New Jersey. The agreement resulted in a “material, revenue-producing event” at Value Companies, says Jonathan Moore, the company's vice president of development. What's more, it's also given the firm a leg up on the amenity front when it comes to competition. That's especially beneficial considering that most of its Northeast portfolio consists of properties built in the 1960s and 1970s. “Now, we are able to give our residents 21st century technology in a well located, well maintained building, even though our portfolio is older,” says Jack Linefsky, director of operations at Value Companies.
As part of the standard package, which covers phone, digital TV service and Internet access for around $100 a month, Verizon also installs a wireless router in each unit. In fact, that's the standard way for residents to connect to the Internet, unless they request otherwise. “If you want a hard-wired CAT 5 connection, they will wire a specific jack for the computer in your apartment,” Linefsky says of the high-speed Ethernet. “But the basic installation comes with WiFi, so you can be active and online anywhere within your unit. That's the option most people are choosing.”
With the rapid proliferation of WiFi everywhere else in residents' lives, it's not hard to understand why.
Joe Bousquin is a freelance writer in Auburn, Calif.
ACTION ITEMS CUTTING THE CORDS
- Anticipate the demand. If your residents aren't clamoring for in-unit WiFi yet, they will soon. You better give it to them, or they'll set it up themselves, making for big tech and security headaches.
- Analyze the numbers. With new equipment and lower costs, setting up a WiFi network at your community today becomes easier, and cheaper, every year.
- Contract with a service provider to get WiFi in your units. You can make money from these agreements, and residents won't associate technical snags with you.