Editor’s Note: This is the first article in a multi-part series for the 2020 Multifamily Executive Concept Community. Over the next six months, MFE will go in-depth on engaging with and retaining Gen Z renters—from design and amenities to smart technology and the appeal of co-living.
Many pundits have characterized members of Generation Z as true digital natives, highly mobile dependent, and always in search of a unique and personalized experience. Practical and convenient choices drive Gen Z's buying behavior, a sentiment also reflected in their apartment lifestyle preferences.
Today's renters, led by Gen Z, are looking for the absolute best in apartment living. They desire a range of upgrades, and they are willing to pay a premium for those upgrades–this is the central conclusion of our study, The Next-Gen Renter: 2020 and Beyond, which drew participation from over 23,907 residents nationwide. In this study, 23% of respondents represented Gen Z with an average age of 21.84 and average rent of $1,079. We presented this study at the inaugural J Turner Research Summit in December 2019.
Gen Z accounts for 8% of all adult renters in small multifamily, 6% in large multifamily, and 9% in single-family rentals. As the multifamily industry goes through a multigenerational shift, Gen Z is poised to be the key market driver in the future. Here are five key trends in the way Gen Z approaches the apartment renting paradigm.
1. Most Willing to Pay for Design Upgrades
Gen Z is paying the lowest average rent, but our research shows that they are willing to pay the highest percentage of their rent for upgrades across all generations. The enhancements for which Gen Z is willing to pay the highest percentage include a large balcony with two chairs and a sofa (5.73%), hardwood floors (4.94%), and a large bathroom with a glass shower stall (4.79%).
In the words of a Gen Z renter, "As a full-time student who is also working, it is important for me that my home fosters a productive environment academically. It should also be somewhere I feel like I can relax and grow creatively. This is more of an abstract concept, but it stems a lot from the feel of the floor plans, like smaller and more crowded spaces seem to make me feel much more stifled than a space with perhaps bigger windows or wide spaces in places like the hallways and kitchens. I also enjoy the feelings of bigger showers and closets, giving me more of a luxury feeling in my home. While I cook much more than I eat out, for me, the look of the kitchen does not matter as long as it is functional and has enough space to work (rolling lasagna dough takes more room than you probably think.)"
2. Smart-Home Amenities: Convenience at Their Fingertips
Gen Z’s smart-home amenity choices revolve around convenience, cost savings, and environmental conservation.
Their top smart-home amenity choice is a mobile app that gives them the convenience of rent payment, reservation of amenity spaces, package notifications, and community event alerts. Gen Z wants to access and control all actions related to apartment living by simply tapping their fingertips. This choice is not surprising for a generation that relies heavily on the mobile device for staying connected online and interacting with their microcosm.
Driven by cost savings and a desire for features that improve their carbon footprint, EnergyStar kitchen appliances and smart thermostats are the next most wanted smart-home amenities for Gen Z.
This younger cohort is inclined toward keyless entry into the community. It reduces the hassle of lost keys and increases the ease of accessibility for renters into their homes.
3. Enhance Easy and Secure Accessibility of Packages
Online shopping led by the behemoth Amazon has revolutionized the way consumers shop. Complaints of lost packages and poor package management are rising in online reviews among apartment residents. Despite voicing concern for well-managed package delivery solutions, more than half of the renters (60%) are unwilling to pay an additional fee for any of the e-commerce shopping solutions proposed in the study. This may be because renters expect management companies to provide solutions for package delivery without any additional cost to them.
However, breaking away from the majority, 28% of Gen Zs are willing to pay an additional amount for smart lock-enabled lockers. More than a quarter (26%) are also willing to pay extra for in-unit deliveries and 7% for refrigerated lockers.
As online shopping becomes second nature to consumers, efficient and secure delivery of packages will continue to be on the rise for apartment renters, especially Gen Z.
4. Fitness and Wellness Are a Priority
Staying fit is emerging as a top priority for everyone, regardless of age or environment, and Gen Z is no exception. Fifty-six percent of this generation would like their apartment to have a fully equipped gym. Although less than the older generations, 22% of Gen Z renters desire fitness classes such as Zumba and Pilates, etc.
This generation is also on the lookout for social experiences that promote wellness and foster a sense of community. Close to a quarter (22%) of Gen Z renters have expressed a desire for wellness classes such as yoga and meditation, among others.
5. Holiday Parties Are a Favorite
Community events offer an effective platform to cultivate resident relations, boost a sense of belonging, and encourage resident friendships. Generation Z is most eager for holiday events and pool parties, followed by wellness classes. Our study was conducted pre-coronavirus; consequently, the results may vary if conducted now.
Overall, the Gen Z cohort thrives on personalized and unique experiences. They value a convenient, relaxed, socially active, and environmentally responsible lifestyle, as reflected in their apartment living choices. Multifamily companies must keep their preferences in mind as they prepare to cater to this distinct generation.
