Who is Renting and What Do They Care About?

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California has one of the highest percentages of renters across the nation, and there is a new generation of renters encroaching on the rental market: Generation Z, those born from roughly 1995 – 2012 [1]. Generation Z is starting to replace millennials as the target demographic in the multifamily and student housing industry. Because this generation grew up in a world filled with social media, one great way to reach them is through influencer marketing. Because Generation Z spends an average of 26 hours on a mobile phone or laptop per week, marketing that is mobile-device friendly may have the best chance at making an impact [2].

While Generation Z is a noteworthy generation to focus on, other generations have a higher presence in the rental market than ever before. In a study by the Pew Research Center, adults 35 and younger continue to be the most likely of all age groups to rent. The percentage of rental households younger than 35 increased from 57 percent in 2006 to 65 percent in 2016. Additionally, the percentage of renters ages 35 to 44 rose from 31 percent in 2006 to 41 percent in 2016 [3].

Millennials are shifting away from suburban living and trading it in for urban condos and apartments with proximity to all the necessities [4]. Some of the factors that contribute to a potential renter choosing your property are:

  • Accessibility to public transportation
  • Energy efficiency and sustainability [5]
  • Smart-home automation [6]
  • Distance to shopping and entertainment
  • Proximity to family and friends
  • Cost and amenities
  • Pet friendly
  • Length of the commute to work

Meanwhile, the current fastest growing segment of rental households is the over-50 age group. This group, more commonly referred to as baby boomers, were born between 1946 and 1964. The rise of renters in the baby boomer generation over the last 10 years has gone from 10 million households to 15 million. This has accounted for over half of the growth in rental households from 2006 to 2016. Baby boomers want to live somewhere that is low-maintenance, close to their children and grandchildren, and has service-based amenities. Renting an apartment provides flexibility for them financially, and opens the opportunity to make investments outside of real estate (i.e., the stock market) to yield greater appreciation rates [7]. The second fastest growing segment is rental households with children. This group represented over 25 percent of the growth in the last ten years and are expected to increase that percentage in upcoming years [8].

The California Multifamily New Homes program can help bring your project closer to meeting the needs of renters across all generations. Our technical team can provide custom recommendations to improve the energy efficiency of your project at no cost to you. An energy efficient home facilitates lower vacancy and turnover rates due to low utility bills and overall resident comfort. In some cases, such advancements can justify increases in rental price because of gained benefit, such as attractive low utility bills. To schedule a meeting to assess your project or apply for the program, please contact your CMFNH representative.

 


[1] https://www.careerplanner.com/Career-Articles/Generations.cfm

[2] https://www.rentpath.com/blog/generation-z-multifamily-industry/

[3] http://www.pewresearch.org/fact-tank/2017/07/19/more-u-s-households-are-renting-than-at-any-point-in-50-years/

[4] http://renterswarehouse.com/handbook-millennial-renters-want/

[5] https://www.allpropertymanagement.com/blog/2018/02/02/how-to-attract-millennials-to-your-rental-property/

[6] https://www.greenresidential.com/14-things-that-millennial-renters-look-for-in-a-property/

[7] https://www.washingtonpost.com/realestate/downsizing-baby-boomers-face-a-key-decision-is-it-better-to-rent-or-to-buy/2018/01/17/8afb95f4-5cf4-11e7-a9f6-7c3296387341_story.html?utm_term=.b0da671e3fc0

[8] https://doorgrow.com/2016-rental-housing-demographics/