The Village at Rayzor Ranch – Denton, Texas
Millennials are probably the most often talked about generation when it comes to driving growth in the housing market. However, there is another group that is up-and-coming and will prove to be a powerhouse base for multifamily living.
Generation Z, however, is slowly gaining buying power as they establish themselves in the job market and start to find apartment homes of their own. With millennials steadily getting older and leaving multifamily units for homes in the suburbs, the construction industry should start looking at the modern demands of the next generation.
Multifamily Faces an Opportunity as Generation Z Matures
Many members of Gen Z are now college-age or are approaching it. In fact, ‘college towns’ are a hotbed of growth in this sector. Denton, Texas—home to the University of North Texas, Texas Women’s University and other educational institutions— is ranked the second-most trending city for Gen Z renters, with 42% of the total 2020 renting populace belonging to this age group.
It is true that millennials make up the largest generation group in the U.S., but Gen Z already claims about a quarter of the population according to the U.S. Census Bureau. As a whole, the buying power of this group has already exceeded $140 billion. Although we should not dismiss the power of the millennial group, their successors does present an opportunity for even more industry growth.
As the older Gen Z individuals reach 23 years old this year and begin to move on from their families and start choosing homes of their own, they are seeking smaller apartments with practical amenities. Affordability is a main factor for them, especially with the burden of student debt weighing heavily on their shoulders.
What Amenities Does Gen Z Expect From Their Apartments?
With financial obstacles only exacerbated by pandemic-related challenges, Generation Z is looking for affordability without compromising the essential amenities. Multifamily developments that are near large, urban employment hubs where they can enjoy the city is an important factor.
People want to feel like they are in a community even though we are in an increasingly digital world. Generation Z is no exception. Community areas such as fitness rooms, luxury lounges, community clubhouses, rooms to host events are all expressed needs. With remote employment becoming more common, quiet workspaces are also in demand.
Common areas for community events like happy hours and yoga classes are effective retention tools as well. This is because renters who make personal connections in their community are more likely to remain there for longer.
Trends in Multifamily Developments for Generation Z
Technology is one factor that separates Generation Z from millennials. The younger age group has been thoroughly immersed in the world of technology all their lives. Consequently, they have much higher expectations when it comes to technology-adaptive spaces. Increasingly, young residents want floor plans that accommodate the various gadgets they use every day. Needless to say, speedy Wi-Fi is necessary.
Another trend seen with the new generation is the desire for flexible lease agreements. Rather than the standard 12-month renewal, apartments are increasingly allowing for shorter agreements because they know how quickly life can change for young renters.
Safety is another necessity for any multifamily development servicing this group. Feeling secure and protected is essential – especially when living in urban areas. Considering post-pandemic priorities, every age group will also benefit from increased use of touch-free technology, such as keyless entry systems, hands-free faucets, soap dispensers, light switches and automatic doors. Upgraded air filtration systems and UV lighting for disinfection are other features that will become standard for this generation.
Although millennials are still a key target market, the rising power of Generation Z should be at the forefront of multifamily planning. As this generation enters the next phase of their lives, it is vital that developers and builders take into consideration the unique needs of this growing segment.