Despite Rents Spiking, Gen Z Moving to Major Urban Areas Like San Francisco, Manhattan
While rents declined in the early days of the COVID-19 pandemic, they have spiked by an unprecedented 17.1% nationally over the last year, according to Apartment List. At the same time, the only generation to record an increase in renting activity in the past year (up by 21%, per RentCafe) is Gen Z — a generation which is playing a big role in a seeming urban revival.
Rent growth continued to increase in March, with Apartment List’s national index up by 0.8%. So far this year, rents are growing more slowly than they did in 2021 — however, rental prices continue to rise at a faster pace than pre-pandemic. In addition, over the first three months of 2022, rents have increased by a total of 1.8%. In March, rents increased in 93 of the nation’s 100 largest cities, with “Sun Belt markets in Florida and Arizona continuing to see some of the nation’s fastest growth,” per Apartment List.
The Miami metro has seen the nation’s fastest rent increase over the past six months, up 8%, and also ranks No. 1 for year-over-year rent growth, producing a 30% increase. Over the past six months New Orleans rents went up 8%, Orlando rents rose 6%, Tucson rents increased by 5% and Salt Lake City rents hiked by 5%.
In terms of supply, Apartment List notes there is a gradual easing of the tight market conditions that have characterized the rental market over the past year.
In the midst of these rising prices, one generation seems to be less affected than others. A RentCafe report finds that Gen Z represents more than a quarter of lease applications nationwide, mostly centered in large urban hubs that promise job opportunities. Gen Z residents may bring new life into cities once considered in decline due to the pandemic.
In 2021, Gen Z rental hotspots included San Francisco, which saw a 101% increase in new apartment renters of this generation, per RentCafe.
San Francisco’s popularity was echoed by Jersey City, New Jersey (with a 95% Gen Z increase over the past year), and Manhattan, New York, at a 65% increase. Rounding out the top 10 cities attracting Gen Z renters are Philadelphia, Boston, Arlington, San Jose, Seattle, and Minneapolis.