During the "future-Bloomington" drawing activity in class last Tuesday, one of our group members brought up the fact that our generation is less interested in owning homes than our parents or grandparents. We discussed how this trend could have a major effect on the way cities look in the future, and specifically on the role of rental housing in building sustainable communities.
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| Home ownership by age bracket Source: US Census/npr.org |
Indeed, according to US Census Data from 1990-2010, there has been a gradual but steady decline in home ownership among the millenial generation. This has most likely been excacerbated by the 2008 housing crisis, but one can see the slow decline in the graph above starting as early as 2004, supposedly in the middle of the housing boom. According to a survey by US real estate giant Trulia, millennials are 15% more likely than adults to rent versus buy (although, I am a bit skeptical of both the motivations and results of this survey).
I am pretty confident that even when the economy recovers, our generation will continue to bear the housing crisis in our memory and be less inclined to pursue the American Dream of home ownership with such passion as our parents. Perhaps our inclination towards renting also can explain phenomena such as Zipcar? Why take out a hefty loan on top of those you already have, when you can use a car only when you need it for a fraction of the price?
Based on these changing attitudes, one can imagine the communities of the future utilizing mixed-use zoning with a higher proportion of rental properties. |
Indeed, I think we are at a shift in in terms of housing preferences. Aside from millennials, there also seems to be a shift in retirees moving to urban centers to live in a rental condo or smaller home with less maintenance. The lure of retirees to these areas is that they are walkable, close to restaurants and entertainment, and cultural.
ReplyDeleteI think another reason generations past were more inclined to buy homes was that buying a home seemed to be a risk free investment because appreciation rates were higher than what they are today. It used to be that you would buy a home and each year it's value would automatically increase 5-8% annually. This would lead to a sure fire way to have a very healthy retirement fund when you're ready to sell your home in 30 years. However, appreciation rates aren't what they used to be, and increasing the value of your home may require renovations and making sure you're in a desired location. After the housing crisis, buying a home doesn't always seem like such a "no-brainer" investment as it used to.
ReplyDeleteI wonder what IS the current American Dream, especially now if it's not the fully detached red brick house with the white picket fence, red shutters, and a 4 car garage. It's not surprising that our generation is less inclined to purchase home, and instead choose to rent houses, apartments, and cars. However, I am curious to see how this will play out in the future. When WILL we begin to purchase homes? Will this shift in home ownership change community development and cohesion? How can communities build if no one wants to 'lay down roots'?
ReplyDeleteI am somewhat older than the vast majority of SPEA students, and so I don't know whether this post--which I liked--speaks for me or not. I can say that I do aspire to home ownership, even as I do not see homeownership as being essential to the good life. This somewhat post-material attitude probably indicates a larger trend, from the materialism of the mid 20th century, to current value systems whose focus is often on something other than production and consumption. Declining interest in home ownership is nested within this trend. How your generation and my generation responds in the future to a revived economy with affordable housing opportunities will be interesting. If we continue to rent as much as we have so far in this century, then the trend will have become incontrovertible.
ReplyDeleteIn addition to effects of the housing crisis on our generation's living preferences, I wonder how waiting to have children until later in life might drive down home ownership rates in our generation. It makes much more sense for two people to live in an apartment or townhouse if there is no need for all the extra space in most single-family homes, and it is usually way less expensive.
ReplyDeleteInteresting trends. This also reminds me of the Cradle-to-Cradle push towards a general lifestyle revolving around 'renting' rather than 'consuming'. If the builder/manufacturer is responsible for what they're making through the entire life-cycle of their product, the chances are much higher that more consideration will be placed on the materials used and on their ultimate disposal.
ReplyDeleteFor me, the motivation to put off owning a home stems from the ability to remain mobile. I wonder if this is also the case for many other millenials. Considering the stats that say we will remain in the same job position for as little as 18 months before rotating to a new one, whether it be with the same company or not, the ability to pick up and move may be more highly valued than the traditional American dream of home-ownership, which clearly ties you to one location, at least until you can go through the hassle of selling.