The buzzword from ULI's national Fall meeting in San Francisco: MILLENNIALS (and with that, Tech, of course).
Following the trending topic, we would like to share our first guest blog post from the Llenrock Group blog on the "Top 10 Least Millennial-Friendly Markets in the U.S." by Eric Hawthorn:
Bloomberg published an article a while back that highlighted the U.S. cities “where millennials can’t afford a home.” Before I touch on that article, I want to draw your attention to another article that came out recently, this time in the Huffington Post: “This is the Hourly Wage You Need to Afford a 2-Bedroom Apartment Around the U.S.”:
"The National Low Income Housing Coalition released its annual housing report “Out of Reach” earlier this month. The organization calculated the hourly wage a resident would need to earn to afford a moderate, two-bedroom apartment — and the outlook is grim…
Out of Reach found that the average hourly wage needed to rent a $1,006 two-bedroom unit in the United States is $19.35 — or $40,240 per year. That’s more than two and a half times the federal minimum wage, the report noted, and $4 over the estimated average wage of $15.16 that renters earn nationwide."
Go to the article (linked above) to see what kind of hourly rate a 2-bedroom place requires in each market, which is certainly going to vary widely.
Of course, that article does not pertain to any particular age demographic, but rather focuses on those earning a national or market average income–or, at the very least, the national minimum wage. But there is a strong correlation between the economic demo described above and the age demographic known as the millennial generation, who are (by reputation, and statistically, too) saddled with school debt, employed but underpaid, and generally not in the healthiest financial situation. Given these circumstances, here are the top 10 places, according to the Bloomberg article, that millennials probably cannot afford to live:
9. Washington, DC
8. Riverside, CA
4. San Diego
2. San Francisco
1. San Jose
Ironically, though not coincidentally, the markets with the highest demand for a millennial work force, the tech hubs, are also the places with the highest barriers to entry for millennials. This could be the factor that ultimately allows “non-tech” markets to siphon off parts of Silicon Valley and San Francisco–simple affordability.
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However, these top 10 unaffordable cities are not the only places demanding tech talent.
A new generation of tech cities—Denver, Kansas City, and Chattanooga—is proactively recruiting, expanding, and sustaining their tech workforce by embarking on economic development and urban planning initiatives related to infrastructure, employment-center locations, housing choices, and amenities—such as high-speed internet access. Refer to our latest Urban Land article, “Tech Cities: From Silicon Valley to Silicon Prairie,” to explore the challenges and opportunities the tech industry brings to tech capitals as well as the emerging new generation of tech cities.