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Multifamily Owners Aren’t Putting Enough Juice Into EV Infrastructure

When Ford, General Motors, Mercedes-Benz and other auto manufacturers last year pledged to phase out sales of gas and diesel vehicles worldwide by 2040, the most immediate impact on commercial real estate came in the form of multibillion-dollar plans to build domestic factories and battery plants.

But there is more for commercial real estate to facilitate and capitalize on, and it starts at home.

Friday marks one Earth Day closer to the 2040 goal and projections that about half of all cars on the road will be electric in 2050. As adoption becomes more common — 1.8 million electric vehicles were registered in the U.S. in 2020, three times the number of EVs in 2016 — more people need more access to charging, and multifamily developers and owners have fallen behind the rate of adoption.

“The way we characterize the problem is going to evolve over the next couple of years as EVs become more and more widespread,” said Don MacKenzie, an associate professor of civil and environmental engineering who leads the University of Washington’s Sustainable Transportation Lab. “Rather than this being a problem for people who want to own EVs, this is going to be a problem for landlords and building owners and developers when they realize that they are unable and they have not prepared themselves to provide an amenity that many residents have come to expect.”

Most electric vehicles have been sold to wealthy, single-family homeowners, but EVs are becoming more of a legitimate option for more drivers, and 56% of respondents to a 2021 CarMax survey said they expected their next auto purchase to be an electric or hybrid vehicle.

Public funds are behind the EV adoption and infrastructure build-out push. In addition to federal, local and state subsidies for drivers buying electric, the Biden administration’s Infrastructure Investment and Jobs Act established the National Electric Vehicle Infrastructure Formula Program, which is tasked with deploying $5B over five years to help states fund public charging infrastructure, especially along the interstate highway system.

NEVI has another $2.5B available for a discretionary grant program to support deployment of rural chargers and infrastructure in underserved communities, among other priorities.

But as EV adoption becomes a more viable option for more people, owners of apartments and other multifamily properties waiting for federal money to trickle down to them aren’t positioning themselves for rapidly increasing renter demand.

“In the multi-unit dwelling setting, we actually think that the market is behind adoption interest,” McKinsey & Co. partner Shivika Sahdev, who leads the firm’s Center for Future Mobility, told Bisnow.

She said the profile of the prospective EV buyer is shifting, and not just along income lines.

“We’re also seeing folks that live in different types of settings showing interest in buying EVs, and for them, the biggest enabling factor is access to charging,” Sahdev said. “It continues to be one of the top three barriers to adoption for an individual.”

McKinsey projects the overall EV charging market to be $100B in 2030, Sahdev said. Of that, $43B will be spent on residential charging — a smaller percentage of the overall market because a single-family homeowner can buy a charger for as little as $200 while a commercial-grade Level 2 charger can cost $5K to $10K, and upward of $150K for faster, direct current chargers.

Of the $43B expected to go toward residential charging infrastructure, McKinsey predicts $2.5B will be spent for implementation at multifamily properties. Demand is expected to reach 27.4 million chargers in 2030, 1.4 million of which will be for multifamily properties.

Camden Property Trust, which owns and operates more than 165 communities with more than 59,000 units across the country, is among the large-portfolio multifamily owners that have begun to advance EV charging, but the process isn’t simple.

“In our new developments, we’re outfitting our garages with electrical service that can handle a substantial amount of cars,” Camden Chairman and CEO Ric Campo said. “It’s more challenging, for sure, in older developments where we have to upgrade our electrical