Everywhere you look nowadays, there’s a new study or report on the changing lifestyles of Americans, particularly how Millennials/Generation Y, the group of Americans aged approximately 15 to 32, differ from their parents, Baby Boomers and Generation X. And the studies are certainly interesting.
For instance, a recent survey from the Urban Land Institute (ULI) found that 62 percent of Millennials prefer mixed-use residential developments, and that 76 percent place a high value on walkability; more than half placed a priority on public transportation; and according to recent analysis, driving and car ownership are down, with adults aged 21 to 34 buying just 27 percent of all new vehicles in America in 2010, down from 38 percent in 1985.
Are we on the cusp of a new lifestyle trend in America, one that will shape the housing market in the coming decades? Stephen B. Friedman, the president of Chicago-based S.B. Friedman & Company and noted expert in real estate development, thinks it may be a bit early for urban planners to begin popping the champagne, and for one simple reason – unnaturally large data points.
Generation Y, Friedman points out, is quite large. At more than 76 million people, Millennials not only make up a quarter of the U.S. population, but they outnumber Baby Boomers, and that fact, Friedman says, may be distorting recent studies on consumer preferences.
“Much of the behavior is related to the swollen number of Millennials,” Friedman says. “This cohort is even bigger than the Baby Boomers, and quite a bit bigger than Generation X … and it’s calling for more product that’s of interest to them that was built and occupied by the smaller generation that came before them.”
But even those living preferences may not be all they’re cracked up to be. Only 40 percent of Millennials had a desire to live in medium-to-large cities in the ULI survey, and Ranadip Bose, the senior project manager at S.B. Friedman & Company, says that although interest may be up for walkable, mixed use environments, single-family homes are still the preferred choice among consumers.
“One of the analyses that we followed is overall household growth,” Bose says, “and we’ve generally found that even though there is this general desire for more dense housing types like condos and townhomes, the overall preference was for single-family homes.”
Research from the National Association of Realtors supports Bose’s findings. According to NAR’s 2013 Home Buyer and Seller Generational Trends report, 79 percent of buyers so far this year have opted for single-family detached homes.
But still, there are certainly more prospective homebuyers today looking for homes in walkable, public-transit-ready areas than in past decades, and Friedman says the trend towards density presents Chicago’s more car-centric suburbs with two distinct choices: wait, and hope that Generation Y consumers return to the suburbs to have kids, or “come to grips with real densification,” which is easier said than done. In addition to the resistance that many communities face from residents and council members on densification efforts (especially in the construction of multifamily rental developments), Friedman says that many suburbs would have to revise their regulations for parking, storm water management and other details to allow for denser living environments.
“Their regulations still don’t allow [for density],” he said. “In the suburbs, they’d have to radically redo their regulations.”
Hence, all the Chicagoland neighborhoods that Friedman thinks are doing the most to embrace density – Wheaton, Glenview and Oak Park, to name a few – are older neighborhoods with more traditional, mixed-used developments, and where the local governments are, in Friedman’s words, able to “build on the existing fabric” of the community with new projects and developments.
And indeed, according to Laurie Shapiro, an agent with Gagliardo Realty, Oak Park (an area Friedman especially cited for its efforts on densification) continues to attract prospective homebuyers because of its dense, walkable layout.
“It’s always been top of mind with clients,” she says. “Certainly, people are paying more attention with our gas prices being the highest in the U.S., so it’s become more and more of an issue. But overall, from the time I moved here, it’s been one of the main reasons that people moved here – the walkability and the convenience of everything.”
“You don’t need a car to get around,” Shapiro continues. “You can walk from one end to the other or ride a bike; it’s extremely easy … There’s [the CTA and Pace] bus service if you need it. We have the Green and the Blue Line (CTA trains), and the Metra. How many more options could somebody want? It’s all here.”
That diversity and density, Shapiro says, gives Oak Park a unique advantage among Chicagoland communities, and it’s one that has attracted numerous prospective homebuyers. At press time, there were just 155 properties listed for all of Oak Park, a community of more than 52,000 people.
So what does the future hold? When will we have an idea on whether Generation Y is for real, regarding its zeal for walkable, urban living environments? The tell-tale sign, Friedman says, will be in the migration numbers.
“When people are able to sell their condos in the city and choose to move to the suburbs with their children in smaller proportions than Generation X did – then, you’ll begin to have evidence that there’s a bigger change than just one driven by the size of the cohort,” he says. “And it will not be 100 percent of anything. It might be a tendency, but it’s not going to be a complete shift. It just isn’t.”
And the nature of that shift, Bose concludes, will have a huge say on residential development in Chicagoland, given the immense growth that has been projected for the region in the coming decades.
“In this region, if you look at the Chicago Metropolitan Agency for Planning projections, by 2040 we are projected to add about 2.4 million people. That’s about 850,000 households. Where will you be able to fit those new households?” Bose says. ”Can we accommodate that within the existing fabric, or will we still have some sprawl, with new households coming in? I think it’s too early to be definitive that suburbia is dead.”