The rental apartment market in the Twin Cities and elsewhere around the country is booming. With vacancy levels here at a five-year low, developers have hundreds of new units under construction or in the pipeline to answer the demand from renters who either can't or won't enter the depressed home ownership market.
And just who are making these demands? It turns out that for the first time, the majority of them are "echo boomers," also known as "millennials" or "Generation Y" -- basically, young people between the ages of 18 and 30.
While it may seem like common wisdom that most renters would be young, surveys indicate the echo boomers actually have not made up the majority. Until now they've constituted a sizable minority, sharing that status with 30- and 40-something "Generation Xers" as well as with baby boomers nearing or at retirement age.
A major recent survey of rental applicant demographics, however, indicates they've emerged as the dominant group. That means their demands, tastes, quirks and lifestyles need to be addressed if the current wave of apartment construction is to be successful.
The status of echo boomers in the rental market was highlighted last month at the National Apartment Association Education Conference and Exposition in Las Vegas.
DEI Communities, an Omaha-based apartment owner with more than 9,400 units throughout the midsection of the country, indicated that so far this year, half the rental applications it has received have come from echo boomers, compared with 31 percent from Gen X and only 17 percent from baby boomers.
A year ago, the echo boomers made up 49 percent of DEI's applicants, and only 45 percent of them in 2009, showing a clear trend that the rental market is getting younger rather than older.
Also at the conference, a survey of existing residents in DEI's 71 apartment communities conducted by J. Turner Research was unveiled. The 4,275 responses shed much light on what the echo boomers looked for when making a decision to rent.
Wi-Fi a priority
For instance, echo boomers said among the top amenities they seek is central Wi-Fi Internet access, highlighting their need to be constantly connected to work and social media. Wi-Fi, meanwhile, didn't even make the top five on the baby boomers' list. What they wanted was additional storage space for their possessions.
Also, echo boomers listed stainless steel appliances as one of their top priorities, speaking to their high expectations in terms of cutting-edge quality and up-to-date décor, while that wasn't on the baby boomers' top-five list.
In general, millennials are looking at their apartments as a base of operations through which they can be closely connected to their friends and peers both virtually and physically, according to one apartment firm that has had little trouble attracting them to its Twin Cities properties.
'It's cool to rent again'
Having an apartment in a hip building that emphasizes their values has emerged as a new status symbol, said Stefanie Balsis, regional sales and marketing director for Detroit-based Village Green Apartments.
"It's cool to rent again, and the millennials want the latest and the greatest in their apartments and are seeking status and the approval of their friends," Balsis said. "It's probably the equivalent of what buying a new car was to older generations."
Baby boomers moving from suburban homes want large apartments, she said. "Younger renters are coming from dorm life. They want smaller floor plans because they live outside their apartments a lot."
Village Green last year opened its 175-unit Mill District City luxury apartments on Washington Avenue South and it is now fully leased.
The "apartment-as-a-status-statement" ethos of echo boomers, combined with their unparalleled ability to find and process information about competitive properties via the Internet, has turned them into skeptical customers who feel they have a lot of leverage, said another local rental market player.
Brad Tongen, owner of St. Louis Park-based Renters Network, said he's found that while trying to lease his rental condominiums and townhouses to young people, they're less easily impressed than their elders by what they're seeing -- a warning to apartment developers counting on millennials to make up their renter bases but whose properties aren't sufficiently "cool."
"Social networking is so huge, and there's so much info out here, they know right away if the two-bedroom apartment they're looking at is overpriced or if it's a good deal," he said. "They can quickly see what their friends have been looking at and can share that information."
Millennials will sometimes shoot videos of apartments they're looking at and make decisions later while reviewing the footage, rather than in the heat of the moment.
"One of the problems in renting to them is that they sometimes get overwhelmed by the information and can't even make a decision because there's so many properties to consider," Tongen said.
Don Jacobson is a St. Paul-based freelance writer.