Less than half of multifamily operators have integrated AI into operations: report

New York City-headquartered EliseAI opened a Toronto office in February and recently released a report based on surveying 50 Canadian multifamily operators and 200 renters to find out how they’re using artificial intelligence (AI) at their properties.

The company’s platform uses AI to offer solutions for prospect management, guided tours, lease audits, maintenance, delinquent rent payments, lease renewals, answering calls and more for all types of rental housing. It claims to be used for one of every six apartment units in the United States and now has 22 Canadian clients in about 800 buildings.

Canadian respondents to the third-party survey were senior leaders at companies with 200 to more than 5,000 employees. More than half were at companies with more than 1,000 employees.

The survey found that only 44 per cent of multifamily operators have fully deployed an AI solution into their daily operations. The other 56 per cent are still in earlier stages of adoption — either in a pilot, partially deployed, planning to deploy, or have no plans at this time.

AI usage sits at 72 per cent for touring, 64 per cent for maintenance, 52 per cent for renewals and 46 per cent for delinquent rent payments.

Growing renter expectations are likely contributing to more coming on board as 59 per cent of residents now expect 24/7 responsiveness — something which AI can provide.

Margins are also being compressed from multiple directions — including rising insurance costs, new supply weighing on rents, and softer occupancy — so operators may look to AI for help in that area.

“Just as a leasing tool, there's a really clear return on investment,” EliseAI chief experience officer Fran Loftus, a Torontonian now based in New York, told RENX.

“We’re also solving issues more proactively because we're reaching out and asking people if they have any maintenance issues. You're getting ahead of some of the maintenance that would turn into a bigger, more escalated emergency in the future.”

The report says 94 per cent of operators are planning to increase their AI investment year-over-year.

“I was excited that so many folks were already understanding what the value of automation was,” Loftus said of the report’s findings, including:

Sixty-two per cent of operators said they’ve either restructured on-site teams around AI or moved to a fully centralized model. Forty-four per cent have restructured on-site teams with AI in mind and 18 per cent have implemented a fully centralized model enabled by AI.

Another 16 per cent have made minor adjustments, 12 per cent are exploring potential changes but haven’t acted yet, and only 10 per cent haven’t changed their staffing model at all.

“AI typically enables centralization, so that not all the roles have to be done on site at the property, and that opens new career paths for folks that are working in these companies,” said Loftus.

“Now there's all these new career paths opened up where people can specialize, work across multiple properties, and still move up through the company, but just in a different way. That has helped with retention quite a bit.”

EliseAI provided RENX with examples of companies that have used its platform, including GoldOller, which oversees 40,000 rental units in the U.S.

“They'd been losing top talent to high turnover working across multiple systems,” said an email from EliseAI. “Now they put EliseAI directly in their job postings as a recruiting and retention lever.”

LeFrak Organization, which is responsible for 18,000 units in the U.S., adopted EliseAI to combat burnout and prioritize career development. It took mundane, repetitive tasks off people's plates so they could do higher value work.

There are still barriers blocking expanded AI usage in the multifamily space, according to the report.

The number of AI products available to property managers has grown quickly, and operators cited a lack of internal expertise in integrating and managing them as a hindrance. Thirty-six per cent of operators say their current AI doesn’t give them a clear enough measurement of return on investment needed to justify expansion.

The report shows 38 per cent use one AI provider while 34 per cent use two or more. Eleven per cent rely on their property management system software platform for an AI-solution and 17 per cent are building proprietary AI solutions in-house.

The more fragmented the stack, the more complex AI implementation becomes and the more time it requires.

The Canadian regulatory landscape is complex, and operators are also still working through how AI should handle sensitive resident data in compliance with privacy laws and requirements.