Young American renters are already making trade-offs to address inflation and rent hikes and are considering further changes, according to a new survey from Grubb Properties.
Grubb’s State of the Young American Renter Survey polled 1,000 American renters aged 22-35 to gauge their response to the challenging economic environment.
“Young American renters are contending with an extremely supply-strapped housing market, which has made it significantly more difficult to find accessible apartments in desirable locations,” Todd Williams, Grubb’s Chief Investment Officer, said in a release.
“Grubb Properties’ emphasis on essential housing, geared to people earning 60 percent to 140 percent of AMI, had us wondering how Gen Z and Millennial renters are adjusting to this current economic reality. Our research shows that they are taking action and making trade-offs as necessary.”
Highlights of the survey:
- 93 percent of respondents who experienced a rent hike have already taken action to address it, primarily cutting back on excess spending, looking for a new job, and looking for a new place to live.
- If rents continue to rise, young renters are prepared to take bolder action, moving to a smaller apartment, relocating to a less expensive geographic area, or even moving home with mom and dad.
- Inflation, in the form of both higher prices of goods and higher rents, is top of mind for young renters. When asked to rank their top economic concerns, higher prices of goods was top, followed closely by higher rents.
- These financial concerns will drive young renters to the polls this November. Of the approximately two-thirds who indicated that they will vote, almost nine out of ten stated that their financial situation is influencing that decision.
- Green buildings still matter, even as rents rise. The majority state that green features are at least somewhat influential on their rental decisions
The report says more than half (51 percent) of young renters reported they experienced a rent increase in the past year, with an average increase of 30 percent. Of these renters, less than one in ten (7 percent) said they had the resources to cover the increase without changing their lifestyle.
Green, Urban Living – and Pets — Still Hold Appeal
Young renters aren’t willing to compromise on their environmental priorities. More than four out of five (82 percent) agreed that energy-efficient and environmentally friendly buildings are at least somewhat influential in their decision on where to rent, with 40 percent stating that they’re extremely or very influential.
Similarly, 64 percent at least somewhat agree that proximity to public transportation is important in the rental decision process. Three out of four (75 percent) at least somewhat agree that living in an environment near shops, restaurants, and entertainment is important. This makes it even more critical for more housing at price points attainable to these young renters to be built in urban and connected neighborhoods.
Another compromise young renters are not willing to make is giving up their pet. Of the 74 percent of respondents who own a pet, most (58 percent) agreed that no matter how much rent increases, they would never consider a pet-free building.
Inflation Tops the List of Financial Concerns – and Drives Young Renters to the Polls
Inflation continues to be top of mind for young renters. When asked to rank their financial concerns, the rising prices of goods were cited by 30 percent of respondents as their number-one financial worry, followed by rent increases (25 percent), lack of savings (20 percent), job security (15 percent), and paying back student loans (10 percent).
Young renters report that higher rents also make finding a new apartment more difficult. When asked how easy or hard it would be to find an apartment in their price range, 64 percent said it would be at least somewhat hard.
“Grubb Properties is laser-focused on addressing this housing shortage,” said Williams. “We’re building new communities in some of the most supply-constrained areas, including Los Angeles, New York, the Bay Area, and Washington, DC. We believe that quality urban housing should be accessible to all.”
The Grubb Properties State of the Young American Renter Survey was conducted by Wakefield Research (www.wakefieldresearch.com) among 1,000 young apartment renters (defined as renters ages 22-35), between September 16th and September 29th, 2022, using an email invitation and an online survey. The data was weighted to ensure an accurate representation of young apartment renters ages 22-35. Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. For the interviews conducted in this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 3.1 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.
Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.
About Grubb Properties
Grubb Properties, founded in 1963, is a vertically integrated real estate fund manager focused on the Essential Housing space through its Link ApartmentsSM brand. The company targets residents earning between 60% and 140% of local area median income (AMI), directly addressing a growing crisis for essential housing, while providing residents with exceptional living spaces. Grubb Properties maintains a long-term perspective and its careful and measured approach to real estate investment has delivered resilient and impressive returns. Grubb Properties has received numerous sustainability designations and recognitions, and undergoes annual ESG assessments through GRESB. For more information, visit www.grubbproperties.com.