The Housing Chronicles Blog: Multigenerational housing goes mainstream

Wednesday, April 25, 2012

Multigenerational housing goes mainstream

Photo credit:  NY Times
Over the last year, the concept of multi-generational housing has been steadily gaining attention from the mainstream press, many of whom have been focused on the NextGen line of new homes offered by Lennar.

In the last few months alone, I've been asked to weigh in on this subject by FoxNews, the L.A. Times and American Public Media's Marketplace, so I thought this was a timely subject to address here.

Lennar’s NextGen homes offer a ‘home within a home,’ offering its own private living quarters suitable for everyone from visiting in-laws or unemployed family members to unrelated tenants helping chipping in for the mortgage payment. And yet Lennar is far from the only builder offering this concept, as variations from builders including Taylor Morrison, The New Home Company and even affordable housing providers such as Bridge Housing and Jamboree Housing Corp. have been built.

Although once quite common, the trend of living with relatives declined with the rise of the suburbs, but is now staging a comeback due to economic conditions.  For example, the share of multi-generational households approached 25% in 1940 before steadily dropping to just 12.1% by 1980.  By 2010, however, that share had rebounded back to 18.3%, and, according to a study by the Pew Research Center, is far higher for minority communities in which family elders are readily welcomed as active members of the household.

In 2009, 25.8% of Asian households, 23.7% of black households and 23.4% of Hispanic households included multiple generations versus just 13.1% for white households.  It’s also much more common for foreign-born households (24.6%) versus those born in the U.S. (15.6%).  The highest percentage of these households by age group included those 85 and older (21.5%), 25 to 34 (21.1%) and 55 to 64 (20.9%), which would point to the elderly as well as recent retirees and boomerang children.

According to Adrian Foley, President of Brookfield Homes’ Southland Division, although they are also addressing the multi-generational trend, the overall demand for such homes may be limited.  “I think that it’s not a passing fad because statistics don’t lie, but I don’t think it’s for everybody and won’t be a paradigm shift for the industry,” he offers.  “We might have some pent-up demand that will level out and then get back to normal demand.”

For Brookfield, although most of their move-up homes have long included areas for visiting in-laws, it’s only been recently that their plans include separate sections which can be locked off and include their own entrances.  Their interior designers then model it as a combination of alternative uses that can be adjusted as a resident’s life journey changes.

“We’re big on efficiency competing with the resale market:  maintenance and cost of household ownership is one big area on which we can compete versus the resale market,” concludes Foley.  “We’ve focused on both the entry-level and move-down buyers, so we’re trying to come up with attached housing that meets the needs for both ends of that barbell.”  Much of that philosophy includes providing accessibility, locations close to activities which aren’t funded by HOA dues, and a cost that’s affordable.

There is, however, some potential confusion about Lennar’s NextGen new brand of homes.  That’s because there’s also the NextGen Home Experience produced by Washington-based iShowMedia.  For over a decade, iShow has been showcasing emerging trends, products and services for the American home at trade shows such as IBS and CES, online, NextGenTV and in traditional media.  With over 25,000 plans, the company is now beginning to leverage their brand name and license their name to various builders through a pilot program now underway.  Most of these partners would build single-family communities instead of condominiums or apartments.

Adds company president Paul Barnett, “People are going to live in their homes longer and that’s why we got into this flexibility.  Aging in place, universal design works for everybody. Not that the whole house needs to be that way, but part of it should.”

Want to know more about this trend and how to address it in your projects?  Contact us at MetroIntelligence for details!

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