The Baby Bust

According to the article “The Baby Bust Is Forcing a Reckoning at Public Schools,” only 13 states had enrollment growth in public schools (shown in blue/teal in the chart below). I don’t find anything surprising in this list, except maybe Delaware, which grew 4.3%. It’s no surprise that, at >$100/bbl oil prices, economic growth is happening across all sectors in North Dakota.

What surprised me were states with negative growth but active economies, like Colorado, Arizona, and Nevada. It could be the quality of the public education pushing parents toward private and charter schools. Regardless of the reasons, and there are many, the real estate industry should be looking at repurposing public schools that, once the doors close, will never open again. Millennials and Gen Z are being priced out of these neighborhoods, and as they have fewer children later in life, choosing a location based on its school district is less likely to matter.

The impact on self storage is unknown. According to the SSA 2025 Demand Study, 60% of future renters are most likely to be Gen Z and millennials. They rent more and face increasing disadvantages when trying to buy a home. That creates a more mobile demographic, as buying a home tends to keep families localized.

Future Renters

(SSA 2025 Demand Study)

We are looking for pockets across the country where demand outstrips supply, and that’s reflected in rental rates. Finding those pockets isn’t the hard part; it’s understanding where they are, with restrictive zoning, limited land for new competition, and tough battles with municipalities to get approvals. Those are the pockets we want to develop in despite negative data on public school enrollment; places like California, Hawaii, New Mexico, and Mississippi are still on our radar.