In recent years, particularly since the Great Recession, multigenerational living has been on the rise across the country. Economic and demographic factors are the primary reasons why more people are living in multigenerational settings. These factors will continue to shape the market for homes that can accommodate multiple generations, whether homes with separate living areas or homes with accessory apartments (i.e. “granny flats” or “in-law suites”) on the property.

In 2001, about 15 percent of people in the U.S. lived in multigenerational households; in 2017, that share had risen to 20 percent.  In other words, more than one in residents of the U.S. lives in a multigenerational household, which is defined as:

• Three or more generations (e.g. grandparents, parents and children);
• Two adult generations consisting of adults and adult children (age 25+); OR
• Grandfamilies, which are households headed by grandparent living with a grandchild (under age 18).

There are several reasons why we have been experiencing an increase in multigenerational living, but they generally fall into two categories: economic factors and demographic factors.  The economic downturn and housing market crisis were key reasons for the recent increase in the number of multigenerational households, particularly households that include parents and their adult children. According to a 2011 survey, two-thirds of U.S. residents living in multigenerational homes said they were doing so for “economic reasons.”

In addition to the challenging economy, there are several key demographic trends that are driving the rise in multigenerational living:  

• The aging of the large Baby Boomer population has created more demand for multigenerational living as this population moves into their 60s and 70s. 
• Young adults are getting married later and having children later, and as housing costs continue to rise, more people in their 20s and even 30s are living with their parents in order to save money. 
• Immigration is another big driver of the increase in multigenerational households. In the past four decades, immigration to the U.S. has been largely driven by immigrants from Latin American and Asian countries., who tend to be more likely to live in a multigenerational household.

What does the rise in multigenerational living mean for the housing market?

• Gen X’ers are key buyers of homes for multiple generations. In the past, Baby Boomers were the most likely buyers of multigenerational homes, but Gen X’ers (age 39 to 53 years old) surpassed Boomers this year in being the most likely group to purchase a home designed for multigenerational living.  
• Financing homes for multiple generations can be challenge. In some cases, multiple generations are pooling resources to purchase a home together, which can make finding financing tricky Fannie Mae recently began offering a new loan program specifically designed for multigenerational families.
• Policies that promote multiple generations sharing a home are important. Accessory dwelling units (e.g. basement apartments, garage apartments, tiny homes) are one way in which families can accommodate multiple generations. However, rules regarding accessory units vary from place to place, and accessory units are outlawed in some places. In many communities where accessory units are allowed, it is expensive and complicated for homeowners to construct those units. 

In February, Oregon became the first state to enact statewide rent control. In September, California followed with its own statewide rent cap.  Only the District of Columbia and three other states—Maryland, New Jersey and New York—currently have localities with some type of rent control.  However, as housing affordability challenges continue unabated, advocates in many parts of the country see rent control as the solution to the rental housing crisis.  Washington, Colorado and Nevada are all considering some type of statewide rent control.

The new state laws cap annual rent increases to 7 percent in Oregon and 5 percent in California (plus an adjustment for inflation in both states). In both states, rent control only applies to buildings that are more than 15 years old.

Economists, it is oft-repeated, agree on very few things, but rent control is the exception. Pretty much every economist agrees that setting rent ceilings is bad. In a recent research summary LSA did for the National Multifamily Housing Council, we found that the empirical research on rent control and rent stabilization is more nuanced, with near universal findings that rent control/stabilization poorly targets individuals and families most in need, and more mixed findings on the relationship between rent control/stabilization and overall rental supply and market rents.

An important distinction that does not always get touched on is that most “rent control” policies are not hard rent ceilings, but rather place a limit on the amounts rents can increase and apply those limits only on a subset of buildings (e.g. not new construction). Some California lawmakers have been stressing that their new law is a type of anti-gouging law rather than a rent control law. 

The effect of the new law in California is yet to be seen but there is some evidence that a very small share of buildings will be impacted.  Zillow has estimated (albeit using incomplete data) that only 7 percent of renters in California experienced a rent increase more than the new cap (i.e. more than 5% plus inflation) in 2018.  A UC Berkeley study of 10 gentrifying California communities found that over a 5-year period, the average yearly rent increase exceeded 10 percent about once every three years.  

One key risk of the new law is that owners of rental buildings will convert those buildings to condominiums to meet the growing demand for homeownership and to avoid having to deal with any regulations on rent increases.   

Rent control or rent stabilization laws can also have other unintended consequences, like creating a mismatch between tenants and units types/sizes, leading to a lack of investment in rental properties, and making it easier to charge higher rents in the unregulated market.

Finally, rent stabilization or rent control is not a solution without being accompanied by a serious strategy for encouraging more housing production overall and subsidies for the lowest-income individuals and families who are hardest hit by the housing affordability challenge.

Americans currently owe a collective $1.5 trillion in student loan debt. More than two-thirds of people who attended college have student loan debt. In 2017, the average student had about $40,000 in debt, more than double the average amount in 2000. 

There are countless articles in the popular media about the impact that growing student debt is having on young adults forming households, starting families and buying homes.  

On that last point, a survey conducted by the National Association of REALTORS showed that 83% of non-homeowners with student loan debt say that debt is keeping them from buying a home. According to the REALTORS, young people are pushing homeownership back an average of 7 years as a result of debt loads.

There are certainly other factors that drive homeownership trends but it seems as though student debt is important.

Recent research by the Federal Reserve Bank has quantified the relationship between student debt and homeownership.  According to this new study, about 20 percent of the decline in homeownership among young adults can be attributed to the increase in student loan debt. Student debt, therefore, is not the only factor associated with lower homeownership rates. But Fed researchers find that about 400,000 more young adults in the U.S. would own homes if it wasn’t for the rising student debt burdens. 

Furthermore, other research has found that the negative impact of student debt on homeownership disproportionately impacts people of color, which is contributing to the widening wealth gap in the country.

Is the lesson from this research that young people should not take on student debt to attend college?  Not exactly. We know that compared to people who have a high school degree, college graduates are more likely to be employed, less likely to live in poverty and have higher average incomes.  College graduates are also significantly more likely to be homeowners than are high school graduates. One key is for young adults—and all of us!—to be cautious when taking on debt, including student debt. The value of a four-year degree is not typically related to the price tag of the tuition. A second big takeaway is that people who take on student debt but who don’t finish college programs are at a significant disadvantage.  

Finally, for people interested in housing policy and housing market conditions, it is worthwhile to keep track of trends in student debt, college attendance and college tuition to understand how these dynamics will shape future housing demand.

The idea of a “pop-up” is not new, but has been rapidly trending the past decade. As a young adult living in a metropolitan area, pop-up stores, bars, and events, seem to be a common occurrence. I have even visited a few myself. In the planning field we have seen this flexible concept, transform into a strategic type of planning.

Pop-up urbanism, also known as DIY or tactical urbanism, takes a low-cost and dynamic approach in repurposing public space. This approach is small scaled, low-risk, and short-termed. It can achieve community engagement and the enhancement of public space. While these projects create temporary actions or improvements, they can often make lasting changes to neighborhoods.

Pop-up urbanism could be described as a live lab, where different usage or solutions are tested and community interests are gauged. The projects range and vary for each community, but there are a few programs that are used worldwide.

PARK(ing) Day

Park(ing) Day was formed in 2005 by an art and design studio, Rebar. The idea is to take back a metered parking spot and use the “site for creative experimentation, political and cultural expression, and unscripted social interaction.” These spaces have held a large variety of events, ranging from a free bicycle repair shop to a public kiddie pool. This concept gives local businesses, non-profits, city departments, and citizens an opportunity to express their ideas and hopefully spark public interest in how their environment is transformed. International Park(ing) Day takes place the third Friday of September, which is just around the corner! Cities and counties around the National Capital Region, like the City of Alexandria, Arlington County, and the District of Columbia will be participating in Park(ing) Day this year.

Pavement to Plazas

Pavement being converted to plazas was made well known after New York City closed Time Square to vehicles, turning it into a pedestrian plaza. Many other communities have adopted similar pilot programs like the NYC Plaza Program. The NYC Plaza Program guidelines have three main types of plazas to choose from:  one-day plaza, interim materials plaza, and permanent materials plaza. A one-day plaza gives an opportunity to test a proposed plaza site and gain local support. This is a low-cost opportunity that with inexpensive materials can create new public space. With the right amount of support and planning these temporary plazas can become permanent sites.

Bigger Picture

Pop-up urbanism has a long list of programs. There’s chair bombing, better block initiatives, food trucks and vendors, guerilla gardening, open streets, and pop-up parks. While these programs have seen success, it is crucial that a community not relay on just one tool or strategy—like pop-up urbanism— when enhancing public space. LSA’s Cambridge Neighborhood Revitalization Plan was approved by City Council this summer where pop-up urbanism pilot projects was one out of five strategies for enhancing and activating public spaces. If you would like to learn about the other four, check out the plan!

When we work with local communities, we typically hear from elected officials, local government staff and affordable housing advocates  about how important it is to “engage the business community” on the issue of affordable housing.  Bringing employers to the table around meeting housing needs is critical for several reasons.  Perhaps most compelling for them is the fact that when a community has an insufficient supply of affordable and appropriate housing, quality of life suffers, workers face longer commutes, and businesses face more employee turnover and added cost of hiring and training new workers.

However, it is often difficult to determine the specific “ask” of the employer community. What do the elected officials, government staff and advocates want their local businesses to do, specifically?

Google is demonstrating a very clear set of actions that a local employer can play in making housing more affordable.  While Google is not a typical company, and its actions and investments likely cannot be duplicated by many other businesses across the country, the types of approaches that Google is taking could provide inspiration for other companies and their public-sector and nonprofit partners.

On June 18, Google announced that it would invest $1 billion in housing in the San Francisco Bay Area.  The company’s investment comes in three forms:

1. The company is repurposing $750 million worth of Google-owned land for housing. Currently, much of that land is zoned for commercial uses, so Google is committing to working through the process with local municipalities to get the necessary zoning changes to accommodate 15,000 new housing units, including housing affordable to low-income families.
2. Google is also establishing a $250 million investment fund to provide incentives to developers to build an additional 5,000 affordable housing units throughout the region.
3. Through Google.org, the company is making $50 million in grants available to regional nonprofits working to address homelessness and displacement.

The amount of money and the number of housing units Google is talking about is staggering but so, too, is the affordable housing crisis in the Bay Area.  But what can other communities facing housing challenges—but without a Google—learn from the company’s actions?

Google’s investments underscore the three “asks” that local communities can make as they engage with local employers.  Do local businesses have vacant or underutilized land that could be used for housing? Can local businesses contribute to a fund to support the development of affordable housing? Is there a way that the employer community can provide resources to local nonprofit organizations working on the hardest housing issues?

Employers in your community may want to be part of the housing solution but they may not know where to begin.  Or they may not have been asked!

Having a sufficient supply of housing that is affordable to the workforce is critically important for attracting and retaining workers and supporting robust local and regional economic growth. Diverse housing options at a wide range of price and rent levels creates a competitive economic advantage for a community. Businesses and local government leaders around the country are recognizing the importance of housing and quality of life. Decisions about where to locate or expand a business increasingly are coming down to housing availability and affordability.

LSA has developed and refined a housing demand model that links anticipated job growth in a region to the amounts, types and prices/rents of housing that will be needed to accommodate future workers. Like other housing forecasts, our model is designed to help communities plan for a sufficient supply of housing. Unlike more traditional demographic-based forecasting models, however, we explicitly tie housing to job growth. By approaching housing demand forecasts this way, it is easier to engage a broad range of stakeholders—including employers, chambers of commerce, economic development agencies—in the conversation about making land use and zoning changes necessary to expand and diversify the housing supply.

Our employment-driven housing demand model is organized around four questions:

1. How much housing will be needed to house a region’s new workers? The forecasts estimate the number of housing units that will be needed to house a region’s net new workers over some period (e.g. 10 years, 20 years).

2. Where should this housing be located? The housing demand forecasts link the location of needed housing to the locations of new jobs, at the county and/or municipal level.

3. What types of housing units will be needed? In addition to understanding the overall amount of housing needed, these forecasts assess the demand for detached single-family homes and multifamily housing (i.e., townhomes, apartments and condominiums), as well as the demand for owner and rental housing.

4. What prices and rents will new workers be able to afford? The housing available to a region’s future workforce must be priced at levels that are affordable. The forecasts take the wages of new jobs into account, along with assumptions about household composition and workers per household, to forecast housing demand at different price and rent levels.

We’ve completed housing demand forecasts for the Washington DC, Indianapolis, and Des Moines regions. Our most recent projects was in the Minneapolis-St. Paul region. We’re hopeful that this work will help local officials engage with the business community on the important issue of housing availability.

Growing up, I gave little thought to housing as a foundation to a person’s health and well-being and for personal and professional development. I never thought about it much growing up because the roof over my head was a stable one. This freed up space to focus on school, and in general, do kid things. My parents even invited me back home after college when I had a series of failed job applications, and my part-time work couldn’t pay for an apartment of my own. It was August 2008 in Florida, a hard-hit market during the recession. I was a statistic in what would be a wave of young people moving back home for similar reasons.

This season shaped my perspective about housing and what home means in more ways than I would know. During this same time period, I had begun volunteering at a local homeless shelter; and some residents shared their personal journey with me. While some were in a cycle of poverty, others shared stories of how healthcare compromised their job or that they were let go in the economic downturn, which left them struggling to pay for housing and no support network to help out. I felt instant connection, imagining where my own path would have led had I not had family who invited me home. I had safety, peace during what felt like a chaotic time, and space to determine my next steps. I was humbled and grateful.

Little did I know I would stumble into the housing industry only a few years later, collecting more stories that have made me feel inextricably connected to others. My work has largely focused on developing or implementing solutions to housing needs, including bringing life to old, deteriorated buildings, evaluating policy impacts or financial tools to development, or grappling with adults with special needs who are living without needed supports. I look forward to continuing to share stories and raise awareness about current and future housing needs through data to better inform policy.