Gen Z Is Staying In Apartments Longer. Young Developers Might Have A Leg Up In Catering To Their Peers

Jamauri Bogan, a 28-year-old developer in Kalamazoo, Michigan, has a pretty simple strategy for finding out what young apartment tenants want. He calls his friends.

Although the college running back-turned-multifamily developer hopes to avoid calls from his friends about broken sinks and other snafus at his properties, Bogan welcomes feedback about the next steps for his business.

“When I first started in the business in 2020, I would text my friends and ask them, ‘What would you want in an apartment?’” Bogan said. “‘What would an apartment need to have to get you to stay in Kalamazoo?’”

That feedback makes its way into his projects, like the recently opened Zone 32, a 14-unit property with a childcare center for tenants and a second phase in the works. Like so many other developers, Bogan is chasing a younger generation of apartment dwellers who, due to challenges in the housing market, see themselves as being renters for much longer than older generations. Bogan believes it’s just common sense for developers to think more about the consumer.

“When I was purchasing an engagement ring for my fiance, I didn't just go to the jewelry store and purchase something for her. Rather, I asked her what she wanted,” he said. “I think that’s the same thing developers have to do.” 

The multifamily industry already made a significant effort to retool and rethink apartment living and multifamily design for millennials. But with the oldest member of Generation Z turning 27 this year, that generation makes up a growing portion of the rental population. That shift means the industry is again facing a pivot and a rethink of what a generation shaped by the pandemic and increased affordability issues wants out of its housing. 

“I think it’s important to understand that the American dream for Gen Z is completely different than it was for previous generations,” 28-year-old SmartRent Vice President of Product Management Braeden Scheer said. “The idea of family formation, buying homes and advancing through this perceived ladder of life — all of those things are a different ballgame postpandemic.”

The exceptional volume of multifamily development in recent years has created significant new supply, and a record 670,000 units are expected to deliver nationally this year. That gives today’s cohort of young renters a lot of choice, and developers and operators a reason to pay more attention. 

“When you have choice, that puts a headwind on the multifamily owner, but also creates an opportunity for the Gen Z renter,” Scheer said. “They can be more selective on what apartment community they want to go to.”

New data shows Gen Z can differ in sizable ways from the larger rental population. Last November, the National Multifamily Housing Council asked 172,700 renters across age groups about housing preferences. 

The NMHC provided Bisnow with exclusive survey data broken down by the Gen Z demographic, including the responses of 40,500 renters 27 and under. Within that younger population, 38% were living alone and 29% with a spouse or partner, not significantly different from the population at large, 44% and 25%, respectively.

The big difference was Gen Z renters were much more likely to be living with just one other roommate. Roughly 23% shared with one friend, versus 8% of the general population, suggesting more need for two-bedroom units.

“They're living longer in these apartments, so they're going through life stages that past generations would typically be in a house with more rooms,” 28-year-old Quarterra Group National Operations Manager Grace Brink said. “They’re living with a girlfriend or boyfriend, getting married, living with a spouse, even having kids, and they just need more space.”

Those living circumstances often correlate with economic conditions, which factor into Bogan’s development strategy. 

“Most graduates are graduating with debt,” he said. “They desire something new and fresh, but typically, their pockets can't afford that. What I’ve tried to do is construct a project that looks and feels market-rate-quality but has an affordable price.”

Rents in Bogan’s new project range from $850 to $1,500.

Some of the more obvious changes the industry needs to make to adapt to a younger generation include marketing and messaging.

“You need to adapt to Gen Z and the likes of technology and get on social media and post on TikTok, LinkedIn and Instagram and incorporate some of those newer generational ways of marketing, or you will fall behind,” Areeba Moten, 28, a senior retail associate with Colliers, told the Las Vegas Review-Journal.

Technology inside the building is no longer just an amenity but a necessity, Scheer said. Gen Z renters, who often entered the working world in a remote or hybrid arrangement, demand top-tier WiFi. Modern, reliable technology is table stakes for renters, a group often doing hybrid or gig economy work from home, placing much more demand on connectivity, Scheer said. NMHC data on Gen Z found 48% of such renters work remotely, versus 52% of all renters.

Scheer also said small upgrades and redesigns can give units a more modern aesthetic. Adding USB ports to wall outlets, swapping out old thermostats and keyed entries, clear signs of older buildings, for smart appliances and keyless entry, and ditching outdated oak cabinets for modern finishes all make a difference. 

“Everyone's looking for new housing. Our generation likes new things and wants to be the first to move in,” Bogan said. “And our generation also tends to be early adopters of technology. They want to be first.”

Creating community in a postpandemic society remains a Gen Z focus, Bogan said. Locations near walkable downtowns and community spaces remain key. There’s also a sense that a generation more attuned to socializing online may not have as many serendipitous meetings, and apartment amenities and common spaces can provide those chance meetings. 

“I think a lot of Gen Z renters are looking for these highly amenitized buildings and finding ways to get into them despite affordability constraints, whether it’s through roommates or smaller floor plans,” said Jordan Furman, 31, CEO of El Paso, Texas-based Ascent Holdings.

Creating a better sense of community is a focus for 30-year-old Jay Glickman, chief acquisition officer at Vero Sade. The firm, which owns apartment buildings in Houston and Dallas and has two projects under development in San Antonio, has created a branded residential concept called Us Living, which seeks to add a hospitality layer to multifamily. The firm’s Sosh Coffees + Cocktails concept at its Houston location is meant to create a gathering place for young renters. 

Simplicity and services also have great appeal, but Gen Z renters don’t value maintenance-free living as much as renters at large, according to the NMHC data. Given options and asked to choose which reasons for renting apply, 42% of Gen Z respondents picked maintenance-free living, while 52% of all renters selected it. A lack of commitment, however, scored higher with Gen Z renters (43%, the most common response), versus 35% for all respondents. 

For Scheer, it boils down to underpromising and overdelivering. There’s app fatigue around multiple sign-ins and complicated accounts, and smart home tech should deliver the simplicity it promises. Included services, as well as chatbots and virtual assistants, should help renters quickly resolve maintenance issues or figure out the details of a building event later in the week. 

“The industry is doing a good job of engaging with its residents and taking tons of surveys,” Scheer said. “But they can’t provide empty promises. If the brand has sold a promise that it’s going to be convenient, it needs to do what it says and do it well.”