Spoiler: They can’t get on the property ladder
Many Millennials are choosing the urban lifestyle, and living in the core of the city as opposed to moving to the suburbs where affordability is much less of an issue. In fact, the trend is even bringing the urban cores to life, encouraging new real estate development and upgrades to transit systems and parks, according to an article by Laura Kusisto for The Wall Street Journal.
Many are paying over $1,000 in rent for their apartments downtown, in some cities even closer to $2,000. Though they could easily afford a mortgage in the suburbs for much less, Millennials prefer the urban lifestyle, and don’t care about the high rent prices, according to the article.
In fact, from 2006 to 2014, 400,000 more of the top 30% of households by income moved to urban areas.
So what is the problem in that?
This trend is causing an increase in rental prices. In fact, as it stands right now in this nation, the working class can no longer easily afford to rent even the most modest of accommodations, according to the National Low Income Housing Coalition. At the worst, there are no states where one can work a standard 40-hour work week at minimum wage and afford a one-bedroom rental unit at the average fair market rent.
From the article:
Tom McNair, executive director of Ohio City, said that five years ago his group was focused on tackling a 40% vacancy rate for office and retail space on the main commercial strip. Today, with a vacancy rate below 2% those spaces are teeming with bars, restaurants and craft breweries. An ice cream factory occupies a former nightclub space where gun shots once rang out.
“Everybody wants to open a business, buy a property, build housing,” said Sam McNulty, a local entrepreneur.
Anne Hartnett started a successful spin studio in the neighborhood. But she was priced out of buying a larger home for her family and had to move to a nearby suburb to get more space.
“It was kind of an ironic situation that a neighborhood we had really put a lot of energy into revitalizing we ended up not being able to afford,” she said.
Now, McNair is looking to helping keep the city affordable for middle class families, including a plan to rezone parts of Cleveland in order to make room for 500 new units of housing.