Generation Z is said to be more independent, pragmatic, and security-focused than Millennials, the generation before them. They are also rapidly approaching adulthood, which means they will have to decide soon where to live. But California may not make the list, due to housing costs.
California’s leaders are very concerned with affordable housing, which is based on family size and income levels. California needs to be proactive, not reactive, when it comes to housing policies. The Golden State’s leaders should consider providing recent college graduates with affordable housing vouchers for the first two years after graduation.
TeensThink2020.org, a nonprofit designed to build political awareness among teens, surveyed teens 13-19 through an Instagram poll to understand what they were thinking about housing. They were asked how they planned to live after graduation when they start working. Sixty-four percent of teens surveyed said they planned to rent with or without a roommate after graduation, indicating their desire for independence.
With nearly two-thirds of those surveyed planning to rent, rent costs will be an important factor in deciding where to settle. Rent is generally the largest single monthly expense, followed by transportation, food, and utilities. In addition, most college graduates are burdened with an extra expense — student loans. The average monthly loan payment (for borrowers 20-30) is $351, according to StudentLoanHero.com. Many graduates will be looking to lower monthly expenses, such as rent.
According to RentJungle.com’s April reports, the average cost of a one-bedroom apartment in Los Angeles is $2,251. Living in states such as Illinois, Texas, and North Carolina can significantly lower housing costs. Other states also offer booming technology fields, entertainment industry opportunities, and a lower overall cost of living.
The obvious question is, “Why should California subsidize a college graduate who has a well-paying job?” Some would say with certainty that high earners, perhaps a recent graduate earning $80,000, should not receive affordable housing subsidies; however, someone commanding that salary has career options and does not have to live in California.
The questions Californians need to ask are:
- Do we want that salary being spent in our economy, helping our tax base? Note: California is staring down a $1 trillion, with a T, pension liability.
- Do we want them to settle down and start a family, giving them even more reasons to continue working in and contributing to California?
In a show of Gen Z’s pragmatism, 42 percent of teens surveyed said they will move to where the jobs are. While there are jobs being created in California, there are also jobs being created in Texas, New York, Florida, Pennsylvania, North Carolina, and other states with lower expenses and comparable salaries. Dallas, Texas was named by Forbes magazine as #1 in America’s Best City For Jobs ranking — two years in a row. A good job and affordable housing are two drivers for recent graduates in choosing where they will start their post-college lives.
Gen Z is motivated by security— financial security, job security, and a secure life outside of work. Over 80 percent polled expect they will buy an apartment, condo, or house by age 35. Gen Z may very well put down roots right where they begin their careers.
Affordable housing for college graduates is a novel approach, no doubt. Earlier this year, California Senate Bill 827 proposed removing local zoning ordinances within a half mile of major transit stops. In many areas this would allow multi-unit housing in traditionally single-family residence zones.
It did not get the traction it needed to pass, but it was novel thinking. California needs to be proactive and future-oriented to maintain the greatness of the Golden State. Sunny and 70 degrees may not be enough to keep a pragmatic Gen Z moving to or staying in California.