Generation Z is setting a new direction in the type of place they like to call home. For those born between 1997 and 2021, vibrant small towns in America’s heartland are their first choice in locations to live.
Boulder is leading the nation for renters in this age group. As home the home of CU-Boulder, it has extra pull as a Gen Z magnet, with 65% of renters who moved in 2020 being aged 24 and younger, according to a report by nationwide apartment listing service Rentcafe.com.
The top three Gen Z dominant cities are rounded off by no. 2 Davis, California – the home of UC Davis – and no. 3 Conway, Arkansas – known as “The City of Colleges.”
All of the top 20 Gen Z hubs are college towns, or located near a college town. The majority of rental applications in these cities are aged 21 and younger. This age group was the fastest-growing active renter segment in the U.S. last year, and their small-town, heartland preference is the opposite of their Millennial generation predecessors, who flocked to large cities in droves.
By 2025, the number of Gen Z-ers in their peak renting ages of 20-29 will double, totaling a projected 45 million. A large share of this group will be the renters of the next decade, though many may still live with their parents if economic conditions are unfavorable.
Small, Midwestern, and Southern towns are seen as more affordable and offering “a vibrant local scene that feels authentic and closer to home for these young adults who are starting out in life in times of great uncertainty and change,” reports Rentcafe.com.
Attracting newly formed households keeps cities fresh. But to retain that young population after college, experts say a diverse job market and reasonably priced housing are critical.
“Young people launching careers head to where jobs are in the different industries that interest them, and those still tend to locate in the biggest cities. If firms allow many of their employees to work from home after the pandemic, college grads might just choose to skip the move to the big city, and stay in the college town that they’ve grown to love. But that’s a big if,” says Nicholas P. Dempsey, Associate Professor of Sociology at Eckerd College.
Overall, the housing trends of the past decade suggest that renting is maintaining its popularity in the nation’s large and mid-sized cities, while homeownership has and will continue to rebound. But, with Gen Z entering adulthood and Millennials settling down, the coming decade will likely see more shifts in the housing landscape.
These findings, however, have to be interpreted in the light of an unusual year, in a global pandemic.
“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,” according to Ronnie A. Dunn, Associate Professor of Urban Studies at Cleveland State University.
“Younger people are willing to trade off living in a crowded, bustling city for having more space at home. Many of these Heartland places are also much closer to their hometowns, too, enabling a tighter intergenerational connection which is more valued among younger adults today than with Gen X,” notes Jill Ann Harrison, Associate Professor and Director of Graduate Studies, Department of Sociology, University of Oregon.
Gen Z is defined as the generation of people born between 1997 and 2012; Millennials are born between 1981 and 1996; Gen X birth years are from 1965 to 1980; and Baby Boomers and older are people born before 1965. Rental application data was sourced from RentGrow, Inc.
Read the full article at rentcafe.com/blog/rental-market/market-snapshots/trending-gen-z-cities.
By Tom Kalinski. Tom is the broker/owner of RE/MAX of Boulder, the local residential real estate company he established in 1977. He was inducted into Boulder County’s Business Hall of Fame in 2016 and has a 40-year background in commercial and residential real estate. For questions, e-mail Tom at [email protected], call 303.441.5620 or visit boulderco.com.