Gen Z and Millennials are Prioritizing Environmental Sustainability in Real Estate

As the younger generation becomes a major player within the housing market, real estate trends are evolving to meet their needs and desires, especially when it comes to sustainability and environmentally-friendly practices.

While sustainable real estate development isn’t a new concept, incorporating environmentally-friendly design, materials, construction practices, and technologies into real estate is quickly becoming a standard, and is expected by the younger generation.

Environmental Sustainability

Creating and supporting environmental sustainability is one of the leading issues among Millennials and Gen Zers. Through their spending dollars and buying habits the younger generation is showing their loyalty to companies that practice environmentally-friendly methods. And businesses that don’t follow suit are feeling the pressure.

Fast Fashion

For instance, “fast fashion” companies that use unsustainable practices like mass water waste and cheap materials are faltering. As one example, fast fashion company Forever21 filed for bankruptcy this past year as Gen Z turned to more sustainable clothing choices such as thrifting and upcycling.

The Largest Consumer Base in the U.S

Gen Z will soon become the largest consumer base in the U.S., and those on the older end of the generation are entering the rental market as they look for places to live while attending college.

In a survey conducted by First Insight, 73% of Gen Zers are willing to pay more for sustainability with the majority willing to pay a 10% premium for sustainable practices.

This extends into the real estate market as well. When looking where to rent, Gen Z pays attention to eco-friendly design, materials, and energy-saving appliances and technologies.


The same goes for the Millennial generation. Millennials continue to make up the largest portion of home buyers and have eco-friendly design, sustainable materials, and energy-saving tech on their buyer wish list. Millennials are also willing to wait to find exactly what they’re looking for in a home, in many cases taking over a year in their home search.

Eco-friendly Homes and Rentals

So what exactly is the younger generation looking for in their home or rental?

To start, the implementation of environmentally-friendly measures such as energy-efficient appliances and HVAC, properly insulated windows and natural insulation, eco-friendly paint with no VOC emissions, energy-efficient lighting, solar panels, and features that improve air quality and reduce water waste.

Eco-friendly measures also extend to creating more outdoor spaces and landscape design with indigenous plants, helping to create natural infrastructure that prevents soil erosion, filters stormwater runoff, reduces noise pollution, and naturally cools better than cement or asphalt.

While building new developments or retrofitting existing properties with these environmentally conscious improvements will cost more upfront for real estate developers and home buyers, ultimately consumers, developers, and of course, the environment will benefit, saving everyone money in the long run.

For instance, home buyers can save around $8,000 in rebates and reduce energy costs anywhere from $1,600 to $2,237 a year when some of these initiatives are instituted.

Developers, along with reducing their carbon footprint, typically sell energy-efficient homes faster and on average for 2.7% more, increasing their profits.

In a study by the U.S. Department of Energy, it was found that homes rated with ENERGY STAR, LEED (Leadership in Energy and Environmental Design), or GreenPoint Rated labels sold for a higher price than homes without energy-efficient labels.

The Hospitality Sector

Eco-friendly practices are also extending into the hospitality sector. Home2 Suites by Hilton recycles scraps of leftover soap, helping prevent 600,000 pounds of soap from ending up in landfills. And Marriott International is removing all plastic straws from their hotels, plus they aim to cut food waste in half and reduce electricity usage by 30% by 2025.

The younger generation has less loyalty to hospitality brands. Rather, they will choose and pay more for hotels, brands, companies, and residential housing that upholds their values.

Prioritizing Eco-friendly and Sustainable Practices

Heading into the future, real estate developers who go green will undoubtedly attract the younger generation as Gen Zers and Millennials continue to prioritize eco-friendly and sustainable practices in all aspects of their lives, and especially, in how and where they live.

Frank Jermusek

Frank Jermusek, J.D.

President / Managing Director

Frank Jermusek is a Principal at SVN | Northco headquartered in Minneapolis, Minnesota. SVN has become one of the most recognized commercial real estate brands in the world with over 200 offices globally.