Multifamily Renter Base Increasingly Made Up of High-Skilled Millennials
- Millennials living in apartment buildings are increasingly those in high-skill jobs, reflecting this cohort’s overall labor market progress.
- Small multifamily accommodates a mix of millennial workers, but higher-skill workers show the largest share increase in this asset class.
- Departing from the trend set by all age groups, high-skilled Millennials are shifting into multifamily at a comparable rate.
Millennial Renters Represent Diverse Occupations
As Millennials emerge as the largest cohort in the labor force, they are bringing sweeping changes to the work-place. These include attitudes toward job flexibility, life-long learning and preference for urban living.
Millennials are also on track to be the most educated generation in history, according to the Pew Research Center. They have more bachelor’s degrees, and better entry-level job prospects and workforce participation rates.
These trends are reflected in U.S. Census Bureau data on the labor market’s broader transformation. The data shows a significant shift in Millennial occupation choices toward high-skill science, technology, engineering, arts/design and mathematics (STEAM), and Legal and Community Services jobs. This reflects a continuing trend, which we discussed in a previous blog.
Within multifamily, this translates to higher shares of white-collar Millennial workers in multifamily.
STEAM workers made up a 29% share of Millennials in small asset multifamily and an eye-popping 42% share in large asset multifamily. These numbers are 3 and 5 percentage points higher than the shares for renters across all age groups, respectively.
At the same time, small buildings are inclusive to a more diverse Millennial workforce compared to large buildings, keeping with the broader trend across all age groups.
Significant Shift toward High-Skill Occupations
As discussed in our previous blog, white-collar STEAM workers are driving rental demand across apartment property types. This is due to a combination of increasing housing costs and uneven job opportunities in urban locations.
Millennials have a weighty influence on this overall occupational skew. The shift toward high-skill jobs is significantly higher among younger renters in both small and large apartment buildings compared to the overall renter population.
Small asset multifamily is going toe-to-toe with large properties in attracting younger STEAM workers, showing a 275 basis point (bps) share shift compared to 307 bps.
For property operators, this indicates that small apartment properties, which often offer more affordable rents, do well in attracting younger workers in entry-level, high-skill jobs. They also serve a comparatively more diverse workforce across age cohorts.
Note: 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.