Are Millennial Renters Actually Shunning Cars for Public Transit?
Contrary to popular perception, more millennials are driving to work. However, older renters lead in the rate of car adoption.
Millennials are Driving More, Transiting Less
In a follow-up to our recent blog on the commuting preferences of renters, where we noted an overall increase in car usage and a decline in public transit, we further examine here the age cohort dimensions of these changes.
Conventional wisdom in the post-crisis period has often alluded to lower car usage among millennials. However, the recent secular uptick in car sales has touched this age group in a significant manner, especially along income lines, as suggested by the National Household Travel Survey 2017.
The survey shows that while driving has made a big comeback among millennials over the course of the recovery, this increase skews toward lower-income individuals who are less likely to live near high-rent jobs centers.
These trends are also reflected in the current American Community Survey (ACS) commuting data for millennials by the type of accommodations they rent, where, as a first-cut proxy for income, more expensive, downtown-oriented large building rentals are closer to jobs.
As shown below, between 2014 and 2016, the basis points (bps) switch to driving is lowest among millennials renting in large apartment buildings (51 bps) compared to small apartment buildings (82 bps)1.
Additionally, fewer millennials shifted away from transit in small apartment buildings (73 bps) compared to large buildings (125 bps). The latter group, however, compensated this switch with higher adoption in taxi usage and working from home.
What about the Boomers?
These data points must all be viewed in context. The decline in transit usage among older working renters (Boomers/Seniors) was steepest for those living in large apartment buildings (266 bps), as shown below, suggesting preference for comfort is a key factor for consideration.
The ACS data also shows that working at home (including telecommuting) is on the rise across both age cohorts, especially for those renting in more spacious small apartment buildings and single-family rentals.
For multifamily stakeholders, while these new developments challenge conventional notions regarding younger renters, the impact of higher interest rates, gas prices and new transportation technologies on car sales and commuting behavior is a moving target.
1 All data is sourced from the American Community Survey (ACS), unless otherwise stated. ACS statistics are sample-based estimates of the compositional profile of the total population in the given year of data collection, and include a margin of error.