Millennials and Multi-Family – How They Might Meet
Millennials and Multi-Family – How They Might Meet
There are no precise start-or-stop dates for what constitutes a “Millennial” human, or the alternate “Gen Y” demographic. For purposes of this short tale, I will use both terms to indicate those folks who are currently (2016) between the ages of 18 and 34. A “young adult” according to the Census Bureau. If you want to fight those parameters, talk to the Pew Research Center and/or authors William Strauss and Neil Howe. Or the US Government! I’m just the messenger!
Every week – heck, most every day – there is a new article/study/capture of this generation. Some of the characterizations (and therefore, quick titles) are somewhat negative sounding. Generation “Me”. The Trophy Kids. The “Entitleds.” Pragmatic Idealists. Generation Flux. The “Whatevers.” The other side of this name-calling reveals more complexity: “becoming the most civically involved”, “most caring about the disenfranchised”, and “the concerned generation”. A lot of the positives have a future component attached: the Millennials (hereafter I’ll call them the “M’s” to save ink/column space/your valuable reading time!) are expected to be great, but they’re just not there quite yet. One descriptor or another, they have, this year, numerically surpassed the Baby Boomers as the largest living generation in the United States – somewhere between 76 to 83 million of them (sources disagree). They will make up about half the US workforce within 5 years. I say “they” because I’m one of the declining Baby Boomers – so if there are times herein where I sound a bit jealous or snarky, deal with it!
For the most part, I am going to be referencing housing trends, along with some data about the connection to education and jobs. And some trends about marriage and raising children. If one were to put these observations under a single umbrella, maybe we could call it “rites of passage”.
So where are these 80 million young folks living and working and searching for the necessary “passages”? As you have no doubt read elsewhere and repeatedly, many of the M’s are living at home with their parents, having boomeranged to their old bedroom after a stint in college or an experiment with friends. That statistic further states that such a living arrangement (living in their parents’ home instead of with a spouse/partner in a separate household) is a first-time event – at least for the last 130 years or so (with a short exception right before WWII). Going back to just after the Civil War, moving out into a new home with a loved one was “the” arrangement-du-jour. Around 1960, 62% of the 18-34 year olds (what today would be called the M’s) were enjoying that away-from-mom-and-dad living arrangement. Today, that percentage has dropped in half.
Why are they staying home? Probably first, there is the storied “failure to launch” syndrome: a slowing of young adults to live outside their childhood home with a romantic partner (spouse or significant other). There is a general postponement of marriage. And even an increasing forswearing of that institution. The median age for marriage increases in every new study, and some analyses project that one quarter of young adults may never marry; unmarried cohabitation, although on the rise, has not kept up with the overall trend toward staying home with the parents.
Is this stat equally divided among all M’s? As you might expect, no. There are more living at home in NY, NJ, and PA than in Maryland, for example. More without a college degree, more men than women, more non-whites than whites. As a proportion of the increasing “failure to launch” group, most of these subgroups have steadily occupied more of the “family-home-based” gang. But overall, the numbers are increasing – so there is no “blame” to affix onto these consistent subgroups. So what other factors come into play here?
Well, the M’s were hit hard by the Great Recession. I don’t mean to imply that they took a hit harder than the Baby Boomers who in some cases lost their retirement savings or their homes or their livelihood. But the M’s took a hit of a different stripe. Just as they were coming into their own as far as job searches and/or first promotions, the bottom fell out of the cranking-out-money-machine bubble. Starting salaries dropped, promotions were shelved, perks were eliminated. And so their “moment” of sufficient security was delayed – they, at perhaps a particularly tricky time in their lives, experienced an unsettling quake in the economic world. In reaction, they decided to forestall or forego marriage, and to defer jumping out into what suddenly felt like an unstable environment.
Also impinging on the M’s workplans is the fact that older Americans are working longer: 19% of Americans over the age of 65 are still working, the highest rate since Medicare was introduced – so there is “competition” at the far end for the M’s. So more instability in their minds. And a culture crush at work.
And then there’s debt. Most significantly these days, college debt. I never had college debt – having been lucky enough to be granted a free ride. My nieces and nephews were gifted by my sisters and brothers-in-law with a college education, so they came out with a cap-and-gown, a degree, and no debt. But I know that is NOT the norm. Americans owe $1.3 trillion in college debt these days, spread over 43 million borrowers. Average monthly loan payments of over $350. Delinquency rate of almost 12%.
So the question can be asked: if they can afford it at all, how do we get the kids out of the house? The answer has often been: baby steps. The young adult finds a roomie with a decent salary and a medium-to-good credit rating (matching his-or-her own stats), and they go out looking for an apartment.
What’s out there for them?
Well, the obvious today-trend is to stay urban and walkable. M’s like to be able to be in the hub of the action. They want to be able to walk (and/or take an easy mass transit hop) to work, play, and shop. This lifestyle might morph somewhat as the age Uber and driverless cars comes more fully onto the stage. Both mass transit and any kind of driving depend on infrastructure, however – and infrastructure is often judged a poor cousin in the competition for tax funding. Just not sexy enough.
Many multi-family futurists expect that the M’s will move to the suburbs like their predecessors once they hit their late 30s (their most common age right now is 26). But there is increasing noise from other cultural commentators that sounds like the M generational changes toward urban living might be more permanent than we are currently recognizing. Only time will tell which side of this “Green Acres” tug-of-war will prevail.
Wherever they land up, what are they looking for within their living environment? The easy first answer is that they are looking for coordinating amenities in their home ecosystem as they expect in their working settings. Flexibility in activities, availability of shopping and gym-options, a variety of gathering spaces, complete electronic infiltration of totally green spaces. Nothing cookie-cutter. Move away from the all-purpose beige of 2000, or even the “alabaster white” of 2016 – now the color-of-the-year for 2017 is “poised taupe”. Described as “if gray and brown had a baby”.
So if you are the landlord person who takes an M or an M-couple/triple for an apartment tour, be sure that there is an industrial hint and tint to the presented space, and great WiFi. Hardwood, quartz/cement, black stainless. Light. Clean. Techy. Edgy (whatever that means that week!). If these are missing, they’ll notice and comment unhappily, before you get 8-feet down the front hallway.
And be ready to change things up in order to keep the M’s. Just as these folks do not linger in a job if something better comes along, so will they move in a heartbeat if a nicer deal floats into their airspace. So, landlords, be ready to have a basket of upgrades, new gathering spaces (inside and out), maybe mixed-use on the lowest floor, health/gym draws, loyalty deals, events, etc. for the M’s as they approach their anniversary dates. Remember that M’s crave experiences and authenticity more than “stuff” or even living spaces – so feed that need. Or change your business model to a variant of a long-stay hotel.
If you decide that YOUR apartment complex will cater to M’s with growing families, be aware that you might as well dedicate your entire building to apartments with 3 bedrooms. Because single or couple M’s will likely not want to mix with “families”. A committed single or couple is not prone to cross-generational happiness. A happy apartment is likely to be all-singles/couples, or all families. Better to build to suit if you want a chance at consistent occupancy.
Is there a neatly-wrapped conclusion to these meanderings about the M’s? Not really, because we’re just not sure how this generation – which might be about 75% of our workforce in a decade – will decide to work and live and raise families. Or where. Or for how long. Or how housing developers, from multi-family in the urban jungles to single-family homes in the suburbs or the sticks, will try to package a good deal or entice a new cohort of citizens.
But we do know this. The Millennials are the next “Big Thing”. They will take over the working world, the support for our social safety nets, the underpinning for all our government-funded and privately-financed endeavors, our Nation’s defense, and the future of the Country. “Not that any of that matters, of course” (credit: Ben Bradlee).
Oh wait. It does.
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Jeremy ChitlikChitlikbu-state-local-tax real-property-taxfinancial-due-diligencedata-center-taxationdevelopment-due-diligencetysonsSenior Director, Property Tax
Last updated on September 4th, 2019 at 04:24 pm