With the oldest representatives of Gen Z now 23 years old, this generation is officially entering the housing market, many of them for the first time. As they do, they’re shifting the priorities of not just the student living market but also the multi-family housing industry. As the real estate industry prepares for what’s next, there are a few things brands should know if they want to remain at the cutting edge of the industry or future-proof their messaging and marketing strategy.
So if you want to learn more about how Gen Z is changing the housing industry and how to market housing to Gen Z, read on! We’ll break down who Gen Z is, what motivates Gen Z’s housing choices, and how to market housing to Gen Z. Let’s dive in.
Who is Gen Z?
First of all, let’s nail down some definitions. Although from a practical standpoint, generational boundaries are more of a guideline, the official birth years for Gen Z fall between 1997 and 2012. That means as of this article’s publication in 2020, the oldest Gen Zers (or “Zoomers”) are now 23 years old. This means many Gen Zers are now becoming first-time renters in both the student housing and multi-family markets, and within the next decade, the entire generation will be 18 or older.
Besides their years of birth, Gen Z is defined by the digital and cultural trends that formed (and continue to inform) the zeitgeist of their formative years. This generation is dominated by digital natives—i.e. people who have not only never experienced a time without the internet, but who grew up using smartphones, social media, and other digital technologies and platforms. They are on track to be the most educated generation on average and tend to be socially conscious and climate conscious.
In terms of their values, Gen Z is considered to be similar to Millennials but antithetical to the Boomer generation. Many Gen Zers appear to reject the traditional values of the Boomer generation: for example, Gen Z is less likely to value buying a home, marrying young (or marrying at all), having children, achieving traditional career success, or conforming to traditionally-defined gender roles.
What motivates Gen Z?
Gen Z’s digital and social sensibilities define their key motivations within the housing market. For example, it should come as no surprise that, even more than Millennials, the digital natives of Gen Z are motivated by smart home tech, access to high-speed internet, and a property’s digital presence. They prefer having the ability to learn about a property online without first having to visit in person and expect online options for lease applications, rent payments, and maintenance requests. In a similar vein, this group—accustomed to having so much of their life at their literal fingertips—appreciates convenience and will choose housing options that cater to it.
Beyond their digital expectations, Gen Z is also highly motivated by affordability. As this generation enters the market during one of America’s most staggering recessions, when tuition costs are higher than ever, and job security is hard to come by, they know they have to be frugal and cautious. For similar reasons, this generation values flexibility and efficiency. They want to get what they need without paying for extra; they want low utility costs and high value, and they want the freedom to change their housing when their needs change, especially during a time of instability.
Additionally, this climate-conscious generation is motivated by sustainability. They are early adopters of sustainable alternatives to everyday goods and services and likely to appreciate brands that they see as contributing to climate solutions rather than to climate problems.
How is Gen Z changing the housing market?
As Gen Z is entering the renting market for the first time, many developers and property management companies are beginning to see what is most important to these renters as well as what are some of the deal-breakers.
We’ve already seen a shift to online rent payment options, online leasing, and virtual tours. In addition to these changes, we’re beginning to see an incorporation of more smart-home technologies with new developments and upgrades to existing apartments. These changes speak to some of the shared values placed on digital convenience and tech-savvy by Gen Z and Millennials. While the latter have been shaping housing trends for over a decade, Gen Z will likely push these trends even further. In particular, smart-home technologies with phone compatibility are likely to be the next wave of upgrades. Some of the amenities we’re beginning to see in this area include:
- Smart thermostats
- Smart door locks and keyless entry (for apartments and amenity spaces)
- Package lockers
- Smart speakers (often given as leasing incentives)
- Smart lights
- Smart appliances
- App-based amenity reservation system
On the subject of sustainability, many developers are setting new standards with LEED certification. Since Gen Z values contributing to efforts that protect the environment, we may see an increase in LEED certified buildings and the marketing around these certifications to appeal to the interests of Gen Z renters. Other features and amenities we’re beginning to see in this area include:
- Vehicle recharging stations
- LED lighting
- On-site renewable energy
- Recycling options
- High-efficiency appliances
- Community gardens
Another interesting trend that could emerge is co-living. While it’s still a niche industry, co-living may appeal to the convenience and affordability motivators for Gen Z. Younger renters are accustomed to and actively seek out living with a roommate. The housing affordability crisis of today may even motivate Gen Z renters to seek out co-living options in spite of the COVID-19 pandemic and any lingering cultural shift it may create.
Want to learn more about how you can adapt your apartment marking strategy for Gen Z? Drop us a line and schedule a chat. We’ve got lots of ideas to share.