Housing: Business as Usual?
When I reflect on what I’ve seen over the last six months as a writer for a twice-weekly real estate newsletter, I’m struck by how little the recession has taught the development community. I notice an eagerness among residential real estate developers to get back to “business as usual.” They seem to be back in the trenches, hunting for raw land to carve into another collection of 50-foot lots for typical tract homes in a “neighborhood” complete with wide streets, cul-de-sacs and expensive community amenities. It seems no amount of data on what buyers want today will persuade them to rethink how we build homes.
Fewer households than ever fit the mold of the nuclear family—that is, homes with two parents and school-aged children. More often we are seeing single-person households, unrelated roommates, and childless couples. According to the Census, there are 102 million unmarried adults in the U.S., or about 44.1 percent of residents. And, 33 million of them lived alone in 2011, making up 28 percent of all households.
While some of these households will still want the suburban home with a two-car garage, many simply don’t fit into that box. Young and old are looking for convenient communities where destinations are more important than square footage. Likewise, quality architecture seems to trump space or lot size.
Consider America’s urban poster child, New York City. Recent attention has been given to the mayor’s request for even smaller studios—less than 300 square feet! Their city ordinance currently requires new apartments be at least 400 square feet. According to a Huffington Post article, 46.3 percent of Manhattan’s households are living solo; so, studio apartments make sense there.
Don’t get me wrong: I’m not advocating that we all should live in Lego-like pods, stacked high above bustling retail and public transportation (although it’s being done in Tokyo!). Admittedly, I like the flexibility and privacy that a single-family home provides. That doesn’t mean, however, that I want a large yard to maintain or that I want to live in a car-dependent community. I still value a quality of life defined by access to goods and services I can reach on foot, bike, or a well-run transit system. I know I’m not alone.
I simply do not think developers are taking the opportunity to rethink how housing is done. Or lenders, for that matter. People are looking for alternative options like accessory dwelling units (a.k.a. granny flats), pocket neighborhoods, small lot subdivisions, and live/work units. Unfortunately, these efficient building types are still difficult to finance in most places, if not illegal.
So how might you propose we push developers to reevaluate housing America?