Move Over Millennials, Here Comes GenZ
If your stack of applications isn’t skewing younger, you may be missing a key rental trend, according to columnist Lew Sichelman.
If your stack of applications isn’t skewing younger, you may be missing a key rental trend.
According to the latest Market Insight report from RentCafe, GenZers were the only demographic to record an increase in rental activity last year. Applications from every other age group were down. Landlords took 220,000 more applications last year from Zoomers than they did in 2020, the report said, an increase of 21 percent. And that percentage has increased to a full 25 percent already this year.
At the same time, applications made by GenXers were down 2 percent, while those for Baby Boomers were off 5 percent and those from Millennials slid by 8 percent. Millennials are still the largest renting cohort, responsible for 45 percent of all applications. But Zers are gaining on them. The group accounted for 27 percent of all applications last year, up from 23 percent a year earlier, the report noted.
RentCafe also reported that activity among GenZs slowed down compared to 2020, when their share had gone up 36 percent. One reason for lag may be the pandemic, which “hit this generation particularly hard,” the nationwide apartment listing service ventured.
Half of adult GenZers reported they or someone in their household either lost a job or took a significant pay cut. And that, coupled with declines in migration because of travel restrictions, “may have temporarily stunted the movement of (this) next generation of adults.”
The RentCafe study analyzed rental application data from January through October 2021 and compared it to the same period a year earlier. The analysis is based on data from 3.2 million rental applications from RentGrow, a resident screening service, for some 44,000 rental communities nationwide. Gen Z is defined as the generation of people born between 1997 and 2012. Millennials were born between 1981 and 1996. Gen Xers were born between 1965 and 1980, and Boomers, prior to 1965.
The study also found that GenZers, the youngest of whom are just turning 25, are playing a major role in reviving urban markets. “Zoomers are swarming large urban hubs that promise job opportunities, bringing new life into cities that were once considered doomed due to the pandemic,” the report says.
The hottest spots—San Francisco, Jersey City, N.J.; Manhattan, Philadelphia and Boston—registered sharp spikes in lease applications from the youngest generation of adults. Apps were up a scintillating 101 percent in the city by the Bay.
“Like their Millennial peers who headed for the big cities in the years following the Great Recession,” the report says, “Gen Z renters are now moving to large urban areas that provide job opportunities and a vibrant social scene, after a one-year hiatus in their college towns or their families’ small towns in 2020.”
The trendiest city for Generation Z was San Francisco, which saw its share of Zer applications double last year. The tri-state area in the Northeast also is one of the nation’s hottest regions, luring young renters back into the bustling urban scene. Indeed, the next four most active places were on the East Coast.
Zoomers are becoming a sizeable presence in other large cities as well. Last year, they accounted for more than one in four active renters in San Diego, Los Angeles, Manhattan and Philadelphia—all with a population of over one million. Similarly, 13 of the 20 trendiest cities for Gen Zers have populations of 250,000 or more.
“Big cities are appealing for a host of reasons,” Nicholas Dempsey, associate professor of sociology at Eckerd College in St. Petersburg, Fla., told RentCafe’s researchers.
“Big cities offer diverse job opportunities. Big cities offer many amenities that are not available in smaller cities or rural areas, from dining and entertainment options to public transit, to services like gyms and spas. And big cities offer opportunities for social networking,” he said. “Whether GenZers are looking for professional colleagues to bounce ideas off of, or romantic partners, they’re more likely to find someone to connect with, in a big, dense city.”
Another factor: GenZ was born to be digital and, as such, a fast and reliable connection is no longer just a choice but rather a necessity. And large metropolises fulfill their need for connections of the electronic as well as the social variety. “Digital (is) in their DNA,” the report remarks.
At the same time, in some college towns, the GenZ cohort represents the largest renting generation. Which makes sense when you consider that many are still in school or are recent graduates.
In Davis, Calif., which is home to several institutions of higher learning, including a branch of the University of California, 69 percent of all apartment applications fielded last year were from Zoomers. In Boulder, Colo., which houses a branch of the University of Colorado, the share was 66 percent.
In each of next three most active college towns—Conway, Ark.; Lynchburg, Va.; and Bloomington, Ind.—the GenZ share of applications was 57 percent or more.