All eyes are on the Millennials as a new generation of consumers whose unique mindset is impacting all industries, from housing to environment, infrastructure, media and retailing.
Anton Menlo in Menlo Park, CA. Designed by KTGY, this $120 million sustainable mixed-use community serves Gen Y professionals in the walkable, transit-oriented neighborhood of Menlo Park.
Key characteristics of Gen Y
Also known as Generation Y, Millennials are fundamentally different from their Baby Boomer fathers and mothers. For one thing, Millennials (those in their 20s and early 30s) have been forged in the Great Recession, they know the risks of adventurous investments and financial escapades, they are burdened with student loans but highly educated and place a great deal of importance on sustainability. Unlike their parents, they delay some of the rites of passage into adulthood such as purchasing a house or getting married, precisely because they want to do things right. Young people move back with their parents or dive into renting not because they abandoned the American dream, but because they appreciate flexibility and seek financial stability before pursuing homeownership.
As of 2013, it is estimated that there are approximately 86 million Millennials residing in the United States. Over the next twenty years, this demographic group is expected to grow exponentially as immigrant counterparts continue to make America their home.
Impact on multi-family design
Partly due to the Millennials’ surge, apartment demand in most markets has climbed as well. Acknowledging Gen Y’s preference for urban living, mixed-use developments and walkable environments, multifamily operators have embraced innovation and new residential design trends have emerged. Car and bike sharing services, electric vehicle charging stations, community kitchens and farms are now an integral part of apartment communities.
“Multifamily developers and designers have been inspired by high-end amenities found at resort hotels and expensive membership health clubs as well as those amenities that single-family home owners would want,” said Rohit Anand, AIA, NCARB and managing principal in the Tyson, Va. office of the award-winning national firm, KTGY Group, Inc., Architecture + Planning, in a written statement.
“These amenities include resort-inspired pools, large spaces for vegetable and fruit gardens, additional storage closets off the patio/balcony and/or in the parking garage, bicycle storage and repair, jamming/recording studio, a large fitness center with lots of windows, a Pilates/Yoga studio, and big screen TVs or even individual screens on each tread mill or stair climber. Some developers are including a training facility with personal training in their membership-quality gyms.”
One other thing that multifamily operators should not disregard when devising retention strategies is technology and Millennials’ preference for digitalized environments. The members of this cohort grew up texting and socializing on Twitter and Facebook, they acquire everything online, from groceries to insurance policies and services, and don’t mind sharing when it comes to transportation and housing. Consumer-generated media, online reviews, rankings and opinion polling are a part of their daily existence. They like to make themselves heard and expect feedback, whether at work, within their communities or in their group of friends. Understanding the Millennial mindset and what the members of this demographic expect from their place of residence will allow property managers to better position their assets and cash out on their investments.
“Understanding the wants and needs of your primary target market is critical to success. Going the extra mile to provide amenities that are unique to the marketplace will give you a real marketing advantage in the process,” observed Anand.
“Today, amenities and technology, both low tech and high tech, are being leveraged to provide apartment residents with a convenient lifestyle free from the burdens and responsibilities of home ownership,” he added. “One of the advantages of apartment living near transit in urban, walkable communities is that residents can more easily do without owning a car. Car sharing businesses like Zipcar and Buzzcar have increased in popularity. Bike sharing, first made popular on college campuses, has moved off campus as well.”
In addition to tech offerings, Gen Y-ers expect their apartments to accommodate their lifestyle needs, such as socializing, shopping and entertainment. During the selection process, chances are that prospects will place as much emphasis on location as on rental rates and unit size.
“Location is everything. What’s in the neighborhood within walking distance is the most important amenity. Where services are missing from the neighborhood, developers might incorporate ground floor retail/services to include a ‘grab & go’ convenience store, dry cleaning, nail (and hair) salon, sports pub and/or cafe. Investors are snapping up these “retail condominiums” at premium prices in high traffic, urban infill areas,” Anand explained.
One simple step to improve chances of success in attracting and retaining residents is offering a wide amenity package, to cater to all renter types. Whereas proximity to parks and recreation spaces will act as leverage when it comes to attracting outdoorsy types, pet-friendliness in a community will serve as a retention driver for pet-owners and animal lovers. You just have to know your target well and align your offerings with the prospects’ needs.
“As Gen Y loves their pets, savvy apartment developers are including grooming stations, a bark park or doggie run, and even doggie day care with pet walking services,” Anand pointed out. “Veterinary care and training might also be included.”
As to where these Gen-Y-centered apartments should be located, news organization Vocativ has compiled a list of cities where young Americans would feel more at ease in terms of job opportunities, quality of life, green, and general atmosphere.
Vocativ based their ranking on traditional data like average salary, employment rates, and the cost of rent and utilities measured against everyday factors like bike lanes for commuting, low-cost broadband and the availability of good, cheap takeout. What’s more interesting though is that they also included some quirky yet “all-important” lifestyle metrics in the study like the price of a pint of beer and an ounce of high-quality weed, as well as the level of access to live music, coffee shops and vintage clothing stores.
As it turns out, if you’re in your twenties, eco-minded, struggling to make ends meet and looking to put down roots in a city that won’t suppress your dreams, Portland, Austin, San Francisco, Seattle and Minneapolis are your best bets. See the complete ranking here.
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