|
Gen Y Provides Hot Prospects for Urban-Styled Apartments
There’s something more than a little different about the 20-somethings of Generation Y who are lined up to generate the biggest burst of housing demand since members of the post-World War II baby boom generation, according to two market researchers and an architect appearing at the NAHB Multifamily Pillars of the Industry Conference on April 1-3 in Colorado Springs, Colo.
Stressing the difference of those in this bulging population group with even their most recent predecessors, James Chung, president of Reach Advisors, noted that “a 28-year-old today is dramatically different from how a 31-year-old today was three years ago.”
“Your staff needs to be tuned into this market,” Chung told an audience of professionals in the multifamily industry. His research finds that Generation Y can be distinguished in several ways:
- Forty percent of Gen Y members are minorities, double the share of their parent’s group, Chung said, and there is the expectation that even less integrated communities will show far greater diversity than in the past.
- Gen Y’ers are not easily reached through mass media, e-mail is out and they tend to communicate by text messaging and through social Web sites, especially women, he said.
The challenge for marketers, who are “salivating” over the potential of selling to this group is to reach the leaders who are most likely to spread the news about a particular housing project. The message must be something “that’s so important that they need to share it with their friends,” Chung said, and “you have to have a script” to provide “signals” that will enable them to talk about the product.
- They are “virtually intimate” and happy to “put their lives out for the world to see; privacy is not what they’re looking for” and “visibility matters.”
- They are “prematurely affluent,” with their spending habits higher than their earnings can support. For those from more affluent families in the top 25 percentile of household incomes, this means subsidies from their parents, which tend to diminish the farther they get from college and the nearer they are to their 30th birthday.
They embrace luxury goods and the brands of their parents, and communicate with their parents a couple of times a day. When it comes to housing, Chung said, a few are looking for the best they can get and a quarter are looking for “a good place” but not denying themselves the means to live the lifestyle they want.
Minority members are advancing faster into high-paying jobs than their predecessors thanks to the strength of their school systems.
- Members of Gen Y have managed to make a startling difference from previous generations in closing the income gap between men and women. At a time when women in the general population are earning only 80% as much as men, women in their 20s in cities with a white-collar, “knowledge-driven employment base” are making 100% to 120% as much, he said.
The explanation is simple: more women than men are going to college, he said. Women account for a 59% share of today’s undergraduate degrees and are receiving advanced degrees 1.5 times as much as men. “If this trend continues,” Chung predicted, “men will be relegated to the role of pets.”
- They appear to be delaying marriage and parenthood and are spending more time as “unsettled” households. Single-women now account for 25% of first-time home buyers, he said, compared to a number in the single digits just five years ago and compared to a 9% share currently for single men.
Discussing his research on Gen Y’ers, Charles Kennedy, senior vice president of consumer insights for DYG Inc., depicted a generation that was raised with a “Gold Star mentality” where everybody is rewarded just for showing up and that grew up in the “roaring '90s,” and times that were “really good.”
Gen Y’ers, he said, believe that things are always going to get better and that the spotlight should be on them.
They prize their emotional well-being and expect great things and top quality everywhere. “The property that makes them feel better will win out,” Kennedy said.
Developers need to look broadly at the criteria Y’ers will use to reach a conclusion on how they feel about a place, he said, including the design, the lobby and the personnel. They are looking for places that “tell a story” and that are “buzz-worthy.”
Customization and the ability to craft a product are important to members of this generation, Kennedy said, so developers should “present them with a piece of the canvas being blank.”
The place where they live needs to be a “hub” where they can connect with people, technology and events, “or they’re not interested in it.”
Based on questions related to their life agenda Gen Y’ers will consider when looking for a place to live, a desirable home needs to be “fun,” reflect good over evil, be flexible and help them tell their story. “They are the stars, everything else is a prop in their story,” Kennedy said.
Amenity Center Is 'Number One'
Architect Sanford Steinberg, principal, Steinberg Design Collaborative, discussed how his company is applying research on Gen Y members to design multifamily housing for them, primarily in markets in Texas.
Floor plans, he said, are geared to residents who spend more time out of their unit than in it, and they are getting smaller and more open. The living room, dining room and kitchen typically constitute one room, the kitchen island is gone, and the bedroom is separated from the room by a wall, but not a door, reflecting the influence of loft design.
Ceilings should be higher and there is no need for details like crown moldings. Steinberg said he allows residents to customize their units by choosing the color for one wall.
A building with 70% of the units one-bedroom and in the 650-square-foot range is a good mix for members of this generation.
“Get funky,” he advised, and “put in angles in the units.” Floor materials can include concrete, simulated wood or vinyl plank.
Gen Y’ers “can close on the first visit,” Steinberg said, “so get them the second they pull up in that driveway."
A porte cochere can create a sense of arrival, and developers should borrow other ideas from hotels, such as a lobby that looks like it belongs in a hotel, a receptionist and resort-style outdoor amenities.
The amenity center is “number one” in selling to Y’ers, Steinberg said, and it should be flexible and open. All of the amenities should be in one room where everyone can be seen. “Make it look like Starbucks,” he suggested, and design it so that it can be easily opened to the outdoors. Also, a communal kitchen with a pizza oven will help convey the feeling of “one big gathering space.”
In one of his buildings, the amenity room is 6,500 square feet, including 1,500 square feet for the exercise room, which is separated by glass. A minimum of 200 to 220 units is needed to support something on this scale, he said.
Outdoor amenities are also important, with, for example, trellised areas leading into the pool, quiet outside spaces and places where residents can cook. Outdoor heaters can be used to extend the use of these areas in cold climates. Gen Y’ers also want pets, Steinberg said, and “a dog-wash off to the side” can be provided to accommodate them.
Architecturally, he said that Gen Y is looking for a contemporary, urban style with lots of colors, even in the suburbs, and developers should consider a visual icon — “huge clocks, freaky weather vanes” — to help brand the property.
|
