All around us, there are generational impacts to development and housing. This is especially true for millennials and multifamily development.
However, to understand the impact on the development of multifamily housing, we first need to understand what is driving the millennial mindset.
What Defines the Millennials
Now the largest living generation, the millennial generation is defined as a demographic grouping of people who were born in the early 1980’s to the early 2000’s. There are over 75 million millennials in the United States and this number continues to grow as immigrants move into the country.
Millennials are also defined by other terms as well and some of these terms shed light on the defining characteristics of this group:
- Generation Y
- Digital Natives
- Internet generation
- Net generation
- Generation Me
- Generation Rent
- Echo Boomers
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Clearly, the millennial generation is technologically savvy. Most millennials embrace technology because they believe technology makes their lives easier. This generation grew up using computers and the internet to do nearly everything. Almost from birth, they used technology to write, research, entertain themselves, communicate, and learn.
As the most educated generation to date, it comes with a price. According to a report by the National Association of Realtors® and nonprofit American Student Assistance®, millennials carry over $40,000 in debt from student loans alone. In addition to student loan debt, millennials are plagued with underemployment. Altogether the impact is millennials are delaying homeownership.
Other significant characteristics of the millennials include:
- Delay in marriage
- Focus on following their passion
- Like to travel
- Desire for work/life balance
- Need to entertain/participate in group activities
All of these factors heavily influence the type of housing millennials will seek.
What Trends Are Impacting Multifamily Development?
- Smaller Space – Where previous generations looked for large apartments, millennials are not as concerned with space as they are with cost and efficiency. Because of their debt load, millennials are looking for multifamily solutions that are inexpensive and they are willing to give up space to save on their budget. For many, this means studio and 1-bedroom apartments and multifunctional spaces.
- Location – Multifamily developments located near hot areas with restaurants, bars, and local retailers have an advantage. Many millennials don’t own cars or prefer biking or being within walking distance to their job and their entertainment. They prefer walking or biking to save money and as a contribution to improving the environment.
- Pet-friendly – Millennials, as a generation, own more pets than any other generation. Many multifamily developers now incorporate pet-friendly amenities within the complex with dog parks and pet washing stations. The dog parks provide both a place for pets to run around and socialization at the same time. Pet washing stations make pet owner’s lives so much easier. And, they make bathing your canine so much easier than washing them in a tub or shower.
- Technology – Design of any multifamily housing unit should take into account, plenty of outlets for all kinds of devices. Millennials want connected homes with Wi-Fi enabled products so they can control and monitor their space from afar and where they are not going to struggle for bandwidth or cell phone coverage. Security access is selling point as well.
More Trends to Consider
- Sustainability – As a generation, millennials focus on the environment and sustainability and this extends to housing. Multifamily developments that focus on solar power are a plus. But it goes even deeper to the materials selected for flooring, glue, and reclaimed materials, as well as energy efficient appliances.
- Balcony – Well, who doesn’t love a balcony? And, if that balcony is in a hip area of the community, it is even better! Activities enjoyed on the balcony, an extension of the living space, including relaxing, working, or even entertaining.
- Space for Community Activities – Whether it is a workout space, co-working space, coffee bar, lounging area, multifamily developments with technology-equipped space for people to interact is popular. Similarly, a place for community gardening intrigues many as well. All of these features feed into the need for millennials to be active, social, environmentally aware and connected.
- Comfort and Ease – Developments that advertise in-unit wash-machines and dryers and dishwashers also see an advantage. Air conditioning is a must in warm climates. Also welcome is nearby secure parking.
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It All Adds Up to a Better Bottom Line
In summary, developing multifamily complexes that take into account these features will pay off. Not only will they help you attract more millennials, but will help you retain them as well. Creating an environment that aligns with the needs and desires of your tenants, combined with strong communication and quick attention to maintenance issues, will pay off. In the end, retained tenants mean less cost all around. After all, less time and money spent on advertising, interviewing and replacing tenants, and means an overall better bottom line.