The End of the Suburbs: Where the American Dream Is Moving (17 page)

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I
f the suburbs are less of a draw for young people, you certainly don’t need to tell that to the group that’s next in line to change our country’s makeup: the millennials. Representing roughly a quarter of the population, millennials have the power and might to throw their weight around even more than their boomer parents did (and do), and they present big issues for the future of the suburbs.

For one thing, large numbers of them have yet to fully launch into adulthood. Not since the 1940s have so many in this age group been living with their parents.
In 2011, 22 percent of twenty-five- to thirty-four-year-olds
were living with their parents or grandparents, according to a Pew study, up from 11 percent in 1980.
Overall, 53 percent of all adults
ages eighteen to twenty-four say they either live with their parents now or did temporarily in recent years. And those who haven’t know someone who has.

Much of this is due to the fact that much of Gen Y came of age in the Great Recession. Many of them graduated from college in 2008 or after, as the global financial system fell apart, and it’s hard for even the most qualified graduates to find work, a phenomenon that was perhaps
best captured by a
New Yorker
magazine cover
that showed a young, brainy graduate hanging his PhD in his teenage bedroom next to his high school trophies as his horrified parents looked on.

But the millennials’ delayed adulthood has other causes that have nothing to do with the recession. One of the defining characteristics of this generation is a general reluctance to separate from their parents physically or emotionally until well into their twenties or thirties. Compared with earlier generations, millennials don’t seem to feel the same kind of pressure to marry, move out, or start having children that earlier generations did. Psychologists have coined a term for this new phase—“emerging adulthood”—to refer to the elongated development process exhibited by this group, much in the way researchers first identified “adolescence” as a new phase at the beginning of the twentieth century. Experts have attributed this slowdown in maturation to a number of causes, ranging from the practical—the need for more education to compete in the job market, and thus the extended need for parental support—to the social and scientific advances of the last several decades: we live longer, can have children later, and so on, so what’s the rush? These factors might also help explain the lack of stigma associated with moving back home for this group:
the Pew Research Center found
that 80 percent of those twenty-five- to thirty-four-year-olds who have moved back in with their parents are just fine with the arrangement—something that would have been unthinkable a generation ago.

Another oft-cited factor for the millennials’ failure to launch is that so many in this group were raised by “helicopter parents,” so named for their tendency to hover over their kids at all times. Helicopter parents don’t want to see their children suffer the harsh realities of the real world, the thinking goes, and their children, having been raised to believe their parents will always be there to solve their problems, are reluctant to separate. Nadira Hira, author and Gen Y expert, sees it a little differently: “We’ve always been close to our parents because they’ve always been so invested in us,” she says, adding that technology has only made it easier and more acceptable for millennials to consult with their parents on just about everything. “It isn’t such a great leap from talking every day on the phone or via text to chatting and hanging together every night under the same roof. As strange as it might sound, we
like
each other.” The result is a multigenerational commingling that has millions of twenty- and even thirtysomethings living in the suburbs in big houses—with their parents.

William May
moved back into his parents’ house in Hicksville, Long Island, in the fall of 2011 to finish his college degree at Hofstra University. He’d been on his own for a few years while attending school in Manhattan but decided to save money and focus on his grades. Now twenty-three, he’d like to move out soon, to be closer to the city, but in the meantime he says it’s fine—he spends most of his time at school or at Starbucks studying anyway. He says his parents had no problem with him moving home—quite the opposite, in fact. “They want to keep me at home, and I want to get out.” May considers it normal for kids his age to live with their parents beyond high school, though he says he has a forty-five-year-old relative who lives with his parents, which he thinks is too old. “There are limits.”

Nicole Miller, also twenty-three, graduated from Denison University with a degree in religion and environmental studies in 2011. After a few stints in California and Ohio, she moved back in with her parents in Mt. Lebanon, Pennsylvania, a suburb fifteen miles outside Pittsburgh, and decided to stay there even after she got a job working for AmeriCorps. She wanted to save money, and many of her friends were also living with their parents. Her father, an architect, and her mother, a psychologist, welcomed her. Her twin brother had also lived at home after college for nine months, and her older siblings had lived rent-free in her father’s fixer-uppers in Pittsburgh—in exchange for helping out with the family business—early into their adult lives. For Nicole’s part, she said she craves the sense of independence she had in college, and she feels out of place in a way. “There are all these nice things,” she says. “I look around, and I think, ‘This is a bigger house than I’ll ever live in.’ It’s like I’m living someone else’s life.” But she’s enjoyed the time with her parents—they eat dinner together most nights, and they have regular television-watching rituals as well. (When reached by phone, she had to end the call when her parents summoned her—it was time to watch
Modern Family
.) She says, in a way, her relationship with her parents is better now than it was before. “Being here, I’ve showed them parts of my life before they didn’t understand,” she says. “And I’ve seen parts of their lives I didn’t understand before my adult life. In some ways, this needed to happen.”

While millennials may not see a problem with this setup, housing economists do, because their failure to set out on their own is disrupting the normal economic cycle. Typically—or at least in the post–World War II era—the housing market turns over when one generation ages out and the next moves in, either to new homes or the homes the previous generation vacated for them. It’s not working that way now.
From 2009 to 2011, just 9 percent
of twenty-nine- to thirty-four-year-olds got a first-time mortgage compared with 17 percent a decade ago. Along with aging seniors moving in with their adult children and an increasingly ethnically diverse population with many families for whom living together is part of the culture, this is contributing to
the record 30 percent of households
now living in “doubled up” accommodations, defined as having at least one other adult who is not the home owner, spouse, or cohabitating partner of the home owner.

Not to miss an opportunity, and sensing a sea change that could last at least a generation or more, the home-building industry is responding with houses that can accommodate all of these people under one roof. So while most new homes are getting smaller, there is a subsection that is getting slightly larger: the new category of so-called multigenerational homes.

These houses typically have an extra self-contained suite, typically five hundred or six hundred square feet either on the first floor or over the garage, complete with its own bathroom and kitchenette and, often times, a separate entrance to preserve the illusion of living independently (for young twentysomethings, call it the “don’t ask, don’t tell door”). “As echo boomers move back in to live with their parents, having that flexible home design with extra bedrooms and secondary entrances to minimize disturbing the other occupants of the home is important,” says Kira Sterling, chief marketing officer for Toll Brothers. These suites—also called granny flats or “Fonzie flats” in an homage to the most famous upstairs tenant in television history—can be used for twentysomethings, aging in-laws, or extended immigrant families for whom living together is a custom. In 2011, Lennar Corporation, one of the country’s biggest home builders, introduced a new concept it calls its “Next Gen—The Home Within a Home,” a series of houses that come with a separate private living space attached. “Your family is constantly evolving,” a cheery female voice-over advises on a promotional video. “The kids move out . . . the kids move back. Maybe Grandma moves in! You need a home that will grow with you
and
your family.” At the National Association of Home Builders’ annual trade show in 2012, all three of the annual
Builder
magazine concept homes featured so-called multigenerational suites. Home Builders don’t adjust their floor plans lightly: that new homes coming off production lines are coming baked in with these features suggests the trend is here to stay. Some builders are even experimenting with “compound” concepts, two or more separate single-family homes on a single lot with a common space in the middle—and a single mortgage for the two homes on the same parcel of land. This takes the multigenerational concept even further. “It’s not just about the parents aging,” says Jonathan Smoke, chief economist for Hanley Wood. “This is about people coexisting and living together for a very long period of time.”

Even when millennials do set out on their own—and they certainly will eventually—by most accounts, they’re not going to be the least bit interested in the conventional, car-dependent suburbs most of them grew up in. Thanks to the overwhelming amount of research that has been conducted about this group (“
21 percent of millennial moms
use their phone in the bathroom!” trumpets one study), we know a lot about their habits, desires, and tastes. And every time they are asked about housing preferences, their answers are the same: they want to be in urban areas and they’re not that interested in owning a car.

An oft-referenced 2011 survey by real estate firm Robert Charles Lesser & Co. found that
77 percent of millennials
said they plan to live in an “urban core.”
A National Association of Realtors study found
that 62 percent of millennials surveyed
say they’d rather live in a neighborhood with
a mixture of houses and businesses near transportation than in a community with large lots and no sidewalks. They are already huge users of public transportation, and
many are willing to pay for the ability to walk
to shopping, entertainment, and the like.

Things millennials
don’t
want: lawns to groom, extra or “museum” rooms that don’t get used, long commutes, too much space. What they do want: lots of space for entertaining, enough room for the Wii, open kitchens to cook for themselves and their friends, outdoor fire pits, maybe a space for their dog. Oh, and they want to rent. Because of their lack of job security, interest in preserving freedom and flexibility, and the fact that many of them were spooked by the recent housing market crash, millennials don’t see home ownership the way generations before them did. Some demographers have taken to calling them “Generation Rent.”

“We have a different mentality than our parents, dramatically different,” wrote a commenter in reference to a 2011
Slate
article about changing housing preferences. “Our song was ‘The Suburbs Are Killing Us.’ Our American dream is different: a good education and high mobility.” (The lyrics in question, from the 1990s indie band My Favorite, are the chorus: “The suburbs are killing us / asleep when we should be dancing.”)

Skeptics of the anti-sprawl movement like to say that’s all well and good, but just wait until the millennials start having children; they’ll decamp for the suburbs just like their parents before them. Everyone wants to be “where the action is,” they say, until practical issues like schools and space come into play. Perhaps. But the birth rate for this group is especially low;
the 2011 figures showed birth rates
for women ages twenty to twenty-four hit their lowest rate ever recorded, 85.3 per 1,000 people. Besides, no one is suggesting that this group is going to rush entirely to the center of big cities. The right urbanized suburbs will do the trick just fine for many in this generation. “We don’t hate the suburbs, we just hated to be bored—or boring,” says Gen Y expert Hira. Indeed, the economist Edward Glaeser points out that when it comes to the younger generation, there is little distinction between city and suburb if all needs and services are within walking distance. “If they can walk everywhere and there’s tons of stuff that they can walk to, then it’s a city.” Even, he says, if it happens to be an urbanized neighborhood in a suburb. The question is whether the boom in those walkable, urban-style developments in the suburbs will be enough. If even a fraction of the 77 percent of millennials prefers urban areas, as the studies show, and they act on these preferences, it will have enormous impact on conventional subdivision-style suburbs.

There’s also a rush to build what the market thinks millennials are going to want in cities: hyper-small apartments and condos, like the dozens of tiny, more affordable 275-square-foot studio apartments Mayor Michael Bloomberg is leading the charge on in New York City. (Graham Hill, the founder of the LifeEdited movement in chapter 4, helped design one of the finalists in the New York competition to win the contract.)
Similar efforts are under way
in San Francisco, Chicago, Seattle, and Boston.

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A
rthur C. Nelson
, the director of the Metropolitan Research Center at the University of Utah and a leading scholar on metropolitan development patterns, has studied the existing housing inventory and the current and future demand for it. Taking into account these big demographic changes and the dramatically different housing preferences of the next generation, he predicts a surplus of as many as forty million large-lot homes—those built on a sixth of an acre or more—by 2025.

Even those with a more moderate view acknowledge that demographic shifts are setting the stage for a vast imbalance between supply and demand. Hanley Wood’s Jonathan Smoke says that between baby boomers staying where they are and millennials not buying anytime soon, the market has been all but frozen. The boomers are the big question, Smoke says; whether they do choose to age in place or decamp to more urban environments or move in with their children is still largely unknown—and it will determine what happens to the market. “We really don’t know what the boomers are going to do, and following them and understanding the decisions they’re going to make is the million-dollar question,” he says. Even if half of all baby boomers, who principally live in suburbia now and plan to stay there, do move to retirement communities or into central cities, he says, “then who on earth is going to occupy all their suburban homes?” There’s an argument to be made, he says, that the level of demand for housing is not going to be anywhere near what it’s been in the last decade. And even if the level of demand remains intact, it won’t be for the kinds of homes that are going to be vacated. “We have an enormous housing stock that is not going to be optimal.”