A recent survey of Gen Z renters conducted by the National Apartment Association in partnership with Statisfacts/Apartment Ratings late last year shows a sharp contrast in preferences compared to other cohorts.
Compared to pre-pandemic millennials who embraced both migration and dense urban cores, more than half of Gen Zers surveyed said they’ll stay put after graduating from college, with 44% saying they prefer a vibrant suburb over city life. And 43% say they want to rent single-family detached properties after graduating.
The Mid-Atlantic and Pacific regions are the top for retention and migration combined among those surveyed. And interestingly, 24% of respondents plan to work in health care after graduating from college, with markets in Arizona, Colorado, Alaska, and Idaho standing out as the most in-demand markets for health care workers.
Gen Z renters also believe that buying a home makes more financial sense than renting, with 58% saying that renting “feels like throwing their money away,” according to a NAA report on the survey’s findings. Nearly all of those surveyed said homeownership provides a greater degree of control and privacy over renting, and 69% expressed confidence that they’ll be able to afford to own a home at some point in their lives.
Current Gen Z renters value guaranteed parking, Wi-Fi enabled communities and security and access control features above all community amenities, the NAA report notes. Onsite retail, car charging, and business centers were less in-demand.
“Gen Z renters are savvy yet practical consumers who additionally value a functional living space with upgraded features,” the report notes. “The majority of participants said that strong internet speeds, spacious floor plans and premium features such as a washer/dryer, walk-in closets, balconies and hardwood floors are key factors in their decision-making. However, keyless apartment entry, smart-home controls and a dedicated office/workspace are not critical features.”
Gen Z renters are the fastest-growing active segment of the renter market in the US, according to a recent RentCafe study, and they’re flocking to small towns in the heartland. The top trending markets for Gen Z renters included Greenville, N.C. (with a 35% share of Gen Z renters); Little Rock, Ark. (34% share); North Little Rock, Ark. (31% share); Norfolk, Va. (30% share); and Lake Charles, La (33% share). Of the roughly 3 million rental applications RentCafe analyzed, 22% of applicants were born after 1997, and Gen Z renters comprised the second-largest share of the rental market.
“The economic and public health consequences of the COVID-19 pandemic have likely influenced Gen Zer’s preferences for less populated, more affordable cities/towns in Mid-America and outside of the large southern metro areas e.g. Atlanta, D.C., Charlotte, Houston, than millennials,” Ronnie Dunn, Associate Professor of Urban Studies at Cleveland State University, told RentCafé.
Source: Gen Z Renters Are Ditching The City In Favor of ‘Vibrant’ Suburbs
Randolph is a Multifamily Investment Sales Broker with eXp Commercial servicing Multifamily Buyers and Sellers in the Greater Chicago Area.