The downtown life in big coastal cities is so last decade. That’s according to the latest data that shows small towns in the heartland are newly trending cities for Gen Z renters. This is especially noteworthy because Zoomers were the fastest-growing active renter segment in the U.S. last year, and their locations of choice are just the opposite of their Millennial predecessors.
According to the most recent national apartment application data, the share of Gen Z renters jumped by 36% in 2020 compared to the prior year. At the same time, the number of apartment applicants from every other generation decreased. So, to identify what types of locations Gen Z prefers, we ranked cities by the highest share of applications for rent from this age group, as well as the highest year-over-year increase in Gen Z applicants.
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Looking at trending cities in Arizona:
• Glendale is the most trending city for the Gen Z in Arizona, as applications from the youngest cohort of renters jumped 39% between 2019 and 2020. A quarter of the renters here belong to this generation.
• Mesa claims the second spot among trending cities, with a 29% increase in its share of Gen Zers. The youngest population of renters reached 27% here.
• Phoenix itself saw 28% more young renters applying here, with the overall total of Gen Z renters reaching 23%.
• Tempe is the Phoenix suburb with the highest share of Gen Z renters – 35% as of 2020. The increase since 2019 was of 25%.
• Flagstaff is Arizona’s city of choice for the Gen Z, with 42% of its renters belonging to this age group in 2020. As a college town, it’s not unusual to be popular with the young cohort. The share of applicants also jumped 11% between 2019 and 2020.
Surprisingly, the trending locations preferred by Gen Z are small towns in the heartland, in the Midwest as well as in parts of the South, favored not only for being more affordable, but also for offering a vibrant local scene that feels authentic and closer to home for these young adults who are starting out in life in times of great uncertainty and change.
Of the roughly 3 million renter applications analyzed as part of this study, 22% were from applicants born after 1997 — also known as Generation Z, the oldest of which turned 23 in 2020. This youngest generation to enter apartment life claimed the second-largest share of the rental market in 2020. They were outnumbered only by Millennials (Slide 2), who continue to represent the largest share of renters in the U.S. with 48% of rental applications as of the end of 2020. Meanwhile, Gen X apartment-dwellers trail behind Gen Z, claiming only 18% of rental applications last year.
In 2020, some cities saw sharp increases in their shares of Gen Z renters, earning marks for the trendiest spots for young renters. In fact, in 18 of the top 20 trending locations for Gen Z renters, the share of rental applications submitted increased by at least 50% throughout the course of just one year.
These findings, however, have to be interpreted in the light of an unusual year, in a global pandemic. “The economic and public health consequences of the COVID-19 pandemic have likely influenced Gen Zer’s preferences for less populated, more affordable cities/towns in Mid-America and outside of the large southern metro areas e.g. Atlanta, D.C., Charlotte, Houston, than Millennials.”, according to Ronnie A. Dunn, Associate Professor of Urban Studies at Cleveland State University.
Greenville, N.C. is the top among trending cities for Gen Z renters
The trendiest Gen Z cities are concentrated in what’s known as “the heartland” or middle America. Nine of the 20 cities on this list are located in the Midwest and eight are in the South — far from the coastal cities previously favored by Millennials. Notably, they are small and mid-sized cities and towns, most with fewer than 300,000 residents, a relatively low cost of living, and apartment rents less than the national average, which is around $1,400.
Asked to provide an expert opinion on this trend, Sociology Professor Jill Ann Harrison (University of Oregon) argues that economic factors are leading people to look at smaller, more affordable markets and see their potential. Harrison concluded that one of the main benefits people get is “much more space for their money” in these small and mid-sized cities compared to what they do in big, coastal ones.
“Younger people are willing to trade off living in a crowded, bustling city for having more space at home. Many of these Heartland places are also much closer to their hometowns, too, enabling a tighter intergenerational connection which is more valued among younger adults today than with Gen X.” Jill Ann Harrison, Associate Professor and Director of Graduate Studies, Department of Sociology, University of Oregon.
Greenville, NC places first in the ranking, having seen the sharpest spike in apartment applications submitted by this generation in 2020, 84%. This small town of fewer than 100,000 residents, the only college town in this ranking, has established itself as a great community to live in and to launch a career.
The cities of Little Rock and North Little Rock, AR, with a combined population of around 260,000, take up the second and third place as the trendiest locations for Gen Z renters. This area doesn’t lack in opportunities nor in hospitality, making for an attractive and affordable place to live in, with an average apartment rent around $800. Norfolk, VA and Lake Charles, LA round up the top 5.
Even the largest cities in the ranking are in fact mid-sized vibrant Midwestern cities that feel like home for many young adults: Minneapolis, MN (population 420k), ranked 11th, St. Louis, MO (population 308K) ranked 16th and Columbus, OH (population 880K), ranked 20th.
Professor Harrison points out that these cities all share a set of characteristics that make sense for this generation just starting out on their own: they have a lower cost of living, with a smaller but vibrant local scene, thus favorable for establishing new, local businesses.
„It is easier in these places for people to take risks to becoming small business owners and contributing to the local economy and culture. These smaller markets offer an opportunity for younger adults not just live in a place, but to help to create or contribute to it in meaningful ways. In turn, many of these smaller cities have a truer sense of authenticity that is certainly serving as a pull.”
According to Harrison, many of the abandoned buildings and factory spaces in such places are turned into coffee shops, breweries, art galleries, and retail spaces – a movement led by younger Gen Xers and Millennials. She points out that this already happened in places like Youngstown, Ohio, for example, while in larger cities like Seattle, LA, or Boston, it takes a lot more money and access to capital to take these kinds of risks.
The places with the youngest renter population in the country
Which cities are Gen Z hubs right now? The top 20 locations with the highest share of Gen Z apartment-seekers are mostly college towns or located near a college town. In these locations, Gen Z’s who are 21 and younger represent the majority of applications.
In the current socio-economic context that proliferated remote work, college communities in the middle of the country might just offer the promise of a different and better way to live and work, according to a recent study published by the Brookings Institute.
This perspective is also shared by Nicholas P. Dempsey, Associate Professor of Sociology at Eckerd College. He points out that college towns like Boulder, CO, or Tallahassee, FL, even if they have the largest number of Gen Z’s in the country, in order to retain the youth, they need to diversify their job offers. However, the long term effects of the COVID pandemic on the way we work and live are yet to be revealed and understood.
“Young people launching careers head to where jobs are in the different industries that interest them, and those still tend to locate in the biggest cities. If firms allow many of their employees to work from home after the pandemic, college grads might just choose to skip the move to the big city, and stay in the college town that they’ve grown to love. But that’s a big if.”, says Dempsey.
Boulder, CO — home to the University of Colorado Boulder — is the country’s top Gen Z city. Here, 65% of renters (the highest in the U.S.) who moved in 2020 belonged to this age group. Similarly, Davis, CA, and Conway, AR, round out the top three and are the only cities with a majority share of Gen Z renters. The former is the home of UC Davis, while the latter is nicknamed “The City of Colleges.” Along the same lines, Bloomington, IN, is home to one of the largest Midwestern universities, Indiana University, where half of all applications for apartments were submitted by Gen Z. The same goes for Ankeny, IA, a town that’s located in the vicinity of Iowa State University.