By Todd Williams, Chief Investment Officer
Young American renters, already facing a historic shortage of rental housing, encountered inflation in the form of higher rents and higher prices on everyday necessities in 2022. These headwinds are challenging at any age, but for those just establishing their families and careers, they can be particularly painful.
Administered by Wakefield Research, Grubb Properties’ State of the Young American Renter Survey polled 1,000 American renters aged 22-35 to gauge their response to the challenging economic environment and to capture data on this unprecedented generational burden.
The extremely supply-strapped housing market, combined with these economic challenges, have made it significantly more difficult for these renters to find accessible apartments in desirable locations. The survey results show that these young renters are taking action and making trade-offs as necessary to address this economic reality.
This validates Grubb Properties’ commitment to delivering more essential housing – units that serve those making 60-140% of local area median income – in gateway and high-growth markets nationwide. By creating new product that serves the “missing middle,” we can help alleviate this significant housing gap.
Beyond delivering this needed new product, Grubb Properties also helps renters through programs such as our Long-Term Renter Program, which caps rent increases for residents who have lived with us for five years.
A rental housing shortage added to an inflationary environment that hasn’t been experienced in decades is taking a toll, with more than half (51%) of young renters reporting they experienced a rent hike in the past year, with an average increase of 30%.
Of these renters, less than one in ten (7%) said they had the resources to cover the increase without changing their lifestyle.
The remaining 93% plan to or have already taken action, most notably cutting back on extra purchases (54%), looking for a new job or side gig (39%), and looking for a new place to rent or live (35%). Almost one in four (22%) said they’d consider using their credit cards to cover the rent. Roughly one in five (17%) would consider asking a friend or family for help with rent, while 12% would consider adding a roommate to help defray costs, and 7% would consider selling their car.
If rents increased to the point that young renters needed to move, they would consider more aggressive steps. Two in five (40%) say they would move to a smaller, less expensive apartment, while more than a third (36%) would pack up and move to a cheaper geographic area. One in five (19%) would consider moving back home with their family members.
Inflation continues to be top of mind for young renters. When asked to rank their financial concerns, the rising prices of goods were cited by 29% of respondents as their number-one financial worry, followed by rent increases (25%), lack of savings (20%), job security (15%), and paying back student loans (10%).
These financial concerns are driving renters to the polls. Of the 68% who state that they plan to vote in upcoming midterm elections, 86% state that their financial situation is at least somewhat influential in their voting decision, with almost half (49%) stating it plays a significant role in their decision to vote.
For the full executive summary of the survey, click here.
Chief Investment Officer of Grubb Properties