When looking for a new apartment, it may be hard to miss the many brochures and advertisements that use “luxury,” as Andre Chepetan learned when moving to Dallas in 2021. However, he quickly realized that something different lay beneath the surface behind the high-end appliances and shiny countertops.
Many luxury apartment units offer a pretty face, but they tend to be poorly constructed, with paper-thin walls, poorly installed windows, and laminate flooring claiming to be “hardwood.”
“[Luxury] sounds good and it gives the impression that it’s something that it’s not,” Chepetan said. “It’s all really just marketing.”
Luxury Apartments are on the Rise
There has been an increase in new apartments in the country that market themselves as “luxury.” Still, this term is not regulated, which ultimately leaves buyers and renters frustrated over the realities of what they see as deceptive marketing.
The term “luxury” can be used to describe the characteristics of the property’s price and amenities, but it doesn’t necessarily tell you how well the property is constructed.
“It’s really subjective, because there is no definition set by state or federal law. What can be luxury to one person may not meet the definition of luxury to somebody else,” said Kristen Haseney, an assistant extension professor of real estate at the University of Connecticut.
What Does Luxury Really Mean?
To define what constitutes a “luxury” apartment or house, realtors and builders, who ultimately decide to assign the term to a property, rely on one rule – the property is within the top 5% of property prices within the region, according to Tony Mariotti, CEO of RubyHome Luxury Real Estate.
But this also depends on the area itself; for example, in a city like Los Angeles, which has some of the most expensive apartments and homes in the country, a $4 million home would still be considered “luxury” because of its high price tag, even though it isn’t within the tops 5%, said Mariotti.
Other criteria that realtors use, specifically in apartments, are that if you build a new complex that is comparatively more expensive and better than the surrounding apartments, realtors will classify these properties as luxury. Mariotti explained that “nicer” means high-rise complexes, better countertops, cabinets, flooring finishes, and better amenities like a rooftop pool and gym with great equipment.
The term is also used to sell a lifestyle, with Mariotti again referencing Los Angeles as an example. The Residences at W Hollywood, a condo building in the area, has units that are relatively cheap for the area, about $600,000 to $700,000, but it is not the units that are considered luxury; it is the building.
“You’re in the W, so you have access to all of the hotel services, like the pool, concierge, housekeeping, etc.,” Mariotti said. “It’s a lifestyle at that point. You’re in the heart of Hollywood.”
Mariotti said that signs that “luxury” is being used too loosely include “ bad location, bad aesthetics, bad finishes inside the units.”
Without regulation on how to define luxury properties, realtors and builders are prone to overusing the term.
“This is probably a case of linguistic inflation, where words start to lose some of their meaning or their force over time,” said Shane Phillips, a housing affordability researcher who’s the housing initiative project manager at UCLA’s Lewis Center for Regional Policy Studies.
Is Your Apartment Really Luxury?
Unfortunately, trying to regulate the term would be difficult, as it would require everyone to agree on defining “luxury,” said Anthony Orlando, an associate professor of finance, real estate, and law at California State Polytechnic University, Pomona.
However, experts believe consumers are savvy enough to determine when a realtor is deceptive.
“People know what’s luxurious and what’s not, and they can see for themselves with apartment units,” Phillips said. “Something I can’t judge for myself is how structurally sound a building is or whether the plumbing was connected properly.”
