Why Philly’s Dropping Rents Are Great for Retaining Talented Millennials
Although Philadelphia is going through an obvious real estate boom, with cranes in the air throughout downtown and luxury homes sprouting up in previously unlikely neighborhoods, it’s interesting to note that rents have actually fallen over the past year.
That’s according to a new study from Zumper, finding that the median rent for a Philadelphia one-bedroom apartment in November 2015 was $1,240, down 5.3 percent from the previous year. The median rent also fell 4.6 percent from the previous month and the previous quarter.
While landlords might complain about getting less money for their properties, keeping cost of living low is an absolute must for attracting young professionals and fighting brain drain from local colleges and universities.
Talk to any young person deciding whether to live in Philly vs. New York or Washington, D.C. and cost of living is certainly top-of-mind. Why pay $2,800 for a one bedroom in Manhattan when you can pay $1,200 here?
The combination of cheap rents — combined with job prospects, a growing economy, and restaurants and nightlife — is keeping startup companies here and keeping talented young workers here.
In fact, a recent Campus Philly study found that brain drain appears to be a thing of the past. Philly’s share of 20-34 year olds rose 6.1 percent from 2006-2012 — more than Boston or San Francisco, where rents are much higher.
Philly is also keeping its non-native college students like never before. In 2014, it retained 44 percent of them, compared to just 29 percent in 2004. Plus, 73 percent of college students overall would recommend living in Philly.
When asked what matters most to students, 45 percent said cost of living, which was only edged out by post-graduation job prospects (61 percent), restaurants and nightlife (54 percent) and public transportation (53 percent) as most important.
“I do think that Philadelphia’s affordability plays a big role in students staying here after they graduated,” said Deborah Diamond, president of Campus Philly.
What defines success for a millennial? Fifty-seven percent said work-life balance in a 2013 Campus Philly/Philadelphia magazine study. Just 9 percent answered “a high paying job.”
“They want to take work that’s meaningful not just money making,” said Diamond. “They don’t want to work 80-hour weeks. Instead they want to enjoy things outside of work.”
With job prospects high and rents low, Philly has become a hotbed of millennial talent in plenty of sectors — especially technology with students from Penn and Drexel sticking around after graduation. But if rents rise dramatically, expect them to bolt for New York just like the old days.
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