Gen Z drives NYC apartment vacancy rates to historic low of 1.4%

The pandemic steered generations old and young away from central business districts. With the promise of remote work and fewer options to access dining, entertainment, and other commercial spaces, 2 million Americans fled large urban counties between 2021 and 2022, according to a study by the Economic Innovation Group.

But some millennials and even more Gen Zers bucked that trend and have made their way back to America’s biggest cities—and it’s led to the lowest vacancy rates in New York City since 1968, according to data released by the city on Thursday. The portion of rental properties that were vacant and available plummeted to 1.4% in 2023—making it the worst housing crunch in Gotham in the past 50 years.

Between 2021 and 2022, more than 42% of people moving to New York City were Gen Zers, and 39% were millennials, according to Census Bureau data. What’s more is that major metropolitan areas overall, including NYC, are seeing population losses among all generations—with Gen Z as the big exception, a Today’s Homeowner report shows. 

“Younger generations certainly constitute a significant portion of those returning to the city for its social, cultural, and convenience appeal,” Jason Bordainick, cofounder and managing partner at NYC-based Hudson Valley Property Group, tells Fortune. “Whether working in-office or remotely, the appeal of urban living, especially in Manhattan, remains strong.”

To put things in perspective, housing experts consider a “healthy” or normal vacancy rate to be in the 5% to 10% range. Higher vacancy rates tend to benefit tenants more than landlords. When vacancy rates are higher, it’s easier for people to find apartments—but that means landlords have to woo tenants with lower rents or other incentives. 

The release of the latest vacancy figures has…