As the youngest generation to enter apartment life, Gen Z claimed the second-largest share of the rental market in 2020, according to a new study of rental applications from RentCafe.
But they’re not heading toward downtown life in big coastal cities like their millennial counterparts. Instead, Gen Zers are gathering in small midwestern and southern cities with cheaper rent and vibrant, close-knit communities.
Here’s what’s behind the migration to America’s heartland.
A push toward the Midwest and South
Frugality is a defining trait of Gen Zers, who were born after 1997 and saw their parents and older peers struggle through the Great Recession.
As they emerge into adulthood, “Gen Z is much more practical with their money,” said Jason Dorsey, a Gen Z expert and president of The Center for Generational Kinetics, the leading Gen Z and millennial research and strategy firm. “They have a higher savings rate, and they’re trying to avoid credit cards and any student loan debt.”
Many of the Top 20 Cities for Gen Z Renters are small, affordable cities located just outside college towns across the Midwest and South. Job opportunities, particularly with remote work, have enabled younger workers to live in these less-populated areas and still earn a decent living, Dorsey said. These cities tend to offer more space, outdoor recreation, and community engagement — all desirable attributes to the younger generation.
COVID’s impact on Gen Z renters
Throughout the coronavirus pandemic, Gen Zers were the most likely to be unemployed or underemployed, according to the Economic Policy Institute.
Job losses, pay decreases, and stagnated career growth all impacted Gen Z’s ability to rent — and “they’re still going to have to recover from that,” Dorsey said.
Some young renters may have added roommates to cover the bills or moved to smaller, less expensive apartments to get through the pandemic.
Remote work unlocks opportunities
Looking ahead, Dorsey predicted Gen Z will put down long-term roots in these lesser-known cities — especially if companies continue to allow remote work.
“Gen Z will benefit from the lifestyle of remote work more than any other generation,” Dorsey said. “It’s what they will have basically their entire careers.”
If you’re looking to move in the near future, here are some ways to make it a smooth experience:
Visit the community in the off season. For example, you might head to Indiana in the winter to see if you’re ready for the cold. Stay for a few days to get a sense of what life is like.
Head to the visitor center. Whether you find the city’s tourism center online or in person, it will give you the lowdown on things to do and the best neighborhoods for young renters.
Continue developing your career. Ask your company about online training courses and mentorships and whether the leadership is committed to allowing remote work.
Build a positive credit history. Boosting your credit score can help you qualify for a good apartment lease or even a mortgage down the road, and potential employers may even look at the information in your credit reports.
Top 5 cities for Gen Z renters
Share of Gen Z renters: 65%
Average rent: $1,911
With 31,000 acres of parkland, plenty of museums and shops, and an abundance of breweries and marijuana dispensaries, Boulder, Colorado has something for everyone. This city even took the top spot in U.S. News & World Report’s Best Places to Live list for 2020–2021.
Share of Gen Z renters: 61%
Average rent: $2,214
Bicyclists will feel especially at home in Davis, which boasts 110 miles of bike trails and the U.S. Bicycling Hall of Fame. San Francisco is also a short drive away, along with vineyards, beaches, and national parks.
Share of Gen Z renters: 52%
Average rent: $717
Nicknamed “The City of Colleges,” Conway offers a low cost of living, mild to warm temperatures year-round, and plenty of outdoor activities.
Share of Gen Z renters: 50%
Average rent: $1,128
Bloomington’s biggest draws include Indiana University, wineries throughout the region, an assortment of trails and nature preserves, and an active nightlife.
Share of Gen Z renters: 50%
Average rent: $1,074
With golf courses, an annual summer festival, 40 parks, and more than 40 miles of trails to explore, Ankeny residents have no shortage of activities to choose from.
Read more information and tips in our Renting section