This time last year, multifamily developers were all asking themselves the same question: When will the apartment-building frenzy taper off? While certain markets have experienced slower absorption rates with labor shortages and high construction costs hindering the production of new units, the demand for multifamily development in certain sectors is still strong.

Here are five multifamily development trends shaping 2018:

1. Increased Segmentation

The key to a successful lease-up is to differentiate your product to appeal to the demands of your market’s unique resident base. For the past few years, the industry has been heavily weighted at the top end of the market, but in 2018 I predict that we’ll see an increased demand to serve the middle market. We’ve focused heavily on catering our product to a discerning and selective resident wanting luxury apartments with first-class amenities. While demand for this product is still alive and well, leasing velocity may begin to slow, as those renters have a lot more options now. In 2018, we’ll see a spike in the demand for affordable rental options. In fact, we’re seeing demand for affordable housing in every market that we’re active in right now. To maintain a competitive edge in 2018, multifamily developers must adopt targeted solutions that appeal to the unique resident base of a city, which includes paying more attention to the middle market.

2. Municipality-Driven Incentives

Today more than ever, it’s important for developers to form partnerships with local municipalities in active markets to better understand the needs of the city and its residents. While we’re seeing a push for affordable solutions from renters, most cities have offered few incentives for developers to build an affordable multifamily product in the past. In 2017, we witnessed some cities doing away with or significantly reducing the number of required parking spaces in new developments by incentivizing developers and residents to promote alternative modes of transportation. In 2018, we’ll see more municipalities putting programs in place to assist with affordable housing development, with some creating mandates that require a certain amount of affordable housing. To really make a project attractive to developers and local governments, I predict that we’ll see more incentives for developers to make a project affordable in the form of subsidies through tax abatements or the creation of tax increment financing districts.

3. Community Engagement

While working in markets outside of your company’s headquarters, developers should actively engage city officials and industry experts through strategic programs that align with your mutual goals. While The Beach Company is headquartered in Charleston, we’ve recently developed two multifamily communities in Greenville and have another in the pipeline. The two cities are only three hours apart, but they cater to two different audiences and have different views on development. What works in Charleston doesn’t work in Greenville, so we’ve made a concerted effort to know Greenville’s leaders and residents by participating in industry meetings and supporting community events. This year, we’ve served on economic development panels in the area and donated scholarship funds to support the region’s technical college students studying real estate, project management and construction. Advocating for responsible development and understanding the needs of local residents will likely result in a more desirable end product and faster timeline.

4. Adaptive Reuse

Today’s renter still wants to live downtown but is being priced out. Construction costs remain high, so developers must look to solutions like adaptive reuse of existing buildings to help solve some of the cost issues in the urban core. In these markets, retrofitting an existing building may be more attractive, as the structure costs are already in place, so multifamily developers can deliver a product just as nice as a new community with a lower cost basis, which should result in a lower rent for the resident. Adaptive reuse solutions will likely offer a slimmed-down, lifestyle-driven amenity package, which may include services like refrigerated lockers for home grocery delivery or customer-driven parcel centers catering to online shoppers.

5. Customer Service

Today’s great companies are often defined by exceptional customer service. The multifamily industry is not immune to this phenomenon. In order to attract and retain customers, multifamily companies need to recommit their focus toward delivering a fantastic living experience for their residents, both offline and online. At the end of the day, great customer service is what will lead to more leases, higher renewal percentages and long term satisfied residents.

Dan Doyle is senior vice president at The Beach Company, headquartered in Charleston, SC.