Adjusting housing for single-person households?

With the increase of single-person households in the United States, it raises questions about housing:

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The difficulties of living alone tend to lie more on a societal level, outside the realm of personal decision making. For one thing, having a partner makes big and small expenditures much more affordable, whether it’s a down payment on a house, rent, day care, utility bills, or other overhead costs of daily life. One recent study estimated that, for a couple, living separately is about 28 percent more expensive than living together.

These efficiencies are an inherent feature of sharing costs with other people, but the barriers to living alone, for those who want to, would be much lower if housing (and health care, and education) weren’t so expensive. Moreover, the types of housing that are most commonly available for one person typically privilege privacy over togetherness, but the two don’t need to be mutually exclusive. DePaulo has studied communities where single residents have their own spaces, but also plentiful shared areas with “the possibility of running into other people.” If you need to, say, move heavy furniture or get a ride somewhere in an emergency, your neighbors are easy to reach. More such options would make solo life easier.

With the rise in housing prices, the barrier to entering the housing market keeps increasing. A single-person household has fewer potential resources to draw upon.

Additionally, a good portion of housing is geared toward families or larger households. While some locations have plenty of smaller units – think studios to two bedroom units – other locations have larger residences. For example, suburbs are often full of single-family homes with 3+ bedrooms and more square feet.

Finally, housing in the United States is often tied to ideas of familial bliss. Those same private suburban homes are meant to enhance family life. Residences provide private spaces for nuclear families. They may have outdoor space for kids to play in and adults to use. Homes are a symbol of success and can provide a good long-term return on investment. Can a single person still enjoy and benefit from a house? Yes, but this may not be the typical image of life in a single-family home.

The decline in percentage of households with married parents and kids and the good life of suburbia

A recent release of data from the Census Bureau shows a decline in the percentage and absolute number of households consisting of married parents and children:

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The number of U.S. homes with a married couple and kids fell to a record low, according to new government data, as the pandemic further delayed weddings and more adults don’t plan to have kids at all.The share of the U.S.’s 130 million households headed by married parents with children under age 18 fell to 17.8% in 2021 from 18.6% last year, according to the Census Bureau. That’s down from more than 40% in 1970.

By absolute numbers, there are just 23.1 million homes with nuclear families, the fewest since 1959, the data show.

This has direct links to the rise of suburbs in the United States. One of the primary reasons Americans moved to suburbs in large numbers is that they believed – and often continue to believe – that the suburbs are the best settings in which to raise children. Suburban life revolved around children, from their schooling to activities to ensuring that they get ahead in life. Nuclear families, particularly with parents who had married young, became associated with suburbia and a particular era of American history.

Today, suburbia is much more complex. It still includes nuclear families and families wanting their children to succeed. But, it also includes single households, multi-generational households, older adult households where their children have grown and/or are still living occasionally, households where the partners are not married, and young professionals.

All of this means that the typical image of nuclear families in the suburbs may not be as prevalent or powerful as it once was. It still is important, particularly in more residential communities. But, as more different kinds of households also reside in suburbs, what communities values and how decisions are made may change. Are the suburbs of today just for families with children or do they have a responsibility to a broader audience? The future American vision of the suburbs may still include families and children but the depiction may also include other households that also contribute to the good of suburban community.

Bringing S.R.O.s to the suburbs in the form of extended stay hotels

Where can people with no other housing options stay? An extended stay hotel can work:

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The company’s resilience suggests the S.R.O. housing model never really disappeared. It was reinvented for the suburbs, where, since the mid-2000s, more poor people have been living than in cities, according to research by Elizabeth Kneebone and Alan Berube, the authors of the 2013 book “Confronting Suburban Poverty in America.” And it morphed in accord with broader economic trends — captured, above all, by two statistics: One in five adults who “wanted more work” were doing without full-time work in late 2019, according to the Federal Reserve; and 53 million people have low-wage jobs, research from the Brookings Institution shows. An expanding industry built on informal and impermanent housing is a reflection of the precariousness that increasingly defines daily life for millions of Americans.

And one company sees it as a business opportunity:

The Siegels see no end to demand and seized on the pandemic as an opportunity to expand beyond Nevada. Last July, the Siegel Group announced the purchase of two Budgetel hotels, 15 miles from downtown Birmingham, Ala.; in November, the company said it was buying a HomeTowne Studios with 130 units in Baton Rouge. The most recent purchase, announced in early May, is an Amerihome Inn & Suites in Houston, five miles north of the beltway in the city’s outer suburbs. That brought the chain to 60 sites nationwide, which now also include Toledo; Memphis; Jackson, Miss.; and Shreveport, La. As Stephen Siegel put it to me, “Our business model is great in a good and a bad economy.”

As the article notes, there are much bigger problems here masked by the opportunity or reliance on extended stay hotels: there are limited housing options for people with limited income, evictions on their record, and poor credit. Government assistance can be lacking or very slow. Landlords have their own worries. Suburban safety nets are thin or do not reach very far. Non-profits and religious groups are not as involved in housing. As sociologist Matthew Desmond showed in Evicted, the housing issue is a big one.

What suburban community would want to address this? Many suburbs want to be a higher-status community and this generally means avoiding having cheaper housing. Depending on the suburb, cheaper housing might be everything from smaller single-family homes to apartments to trailer homes. Hotels might be more acceptable because they could be used by a wide variety of people, including business visitors and potential tourists. If there are problems at such hotels, this could lead to issues.

This also connects to another issue facing suburbs and other American communities: the need for housing for single people and changing family structures. SROs offered housing for single people but were primarily located in cities. The largest number of households in the United States are people living alone and this does not work well in suburbs are usually organized around family housing with multiple bedrooms. Could extended stay hotels have different room configurations that could cater to different needs?

Single person household, harder to buy a home

One side effect of the rise of single-person households in the United States may be that it takes many people longer to purchase a home:

Assuming buyers saved 10 percent of their income every year, it would take a single buyer 11 years to sock away enough for a 20 percent down payment on a typical U.S. home, versus less than five for couples. To crunch the numbers, Zillow used income data from the Census Bureau’s 2016 American Community Survey and Zillow’s own 2016 home value data; the 20 percent down payment was calculated based on the most expensive home a household could afford.

The analysis reveals that a single homebuyer in Chicago has to save 10 years for a down payment compared with four years for a couple…

Those numbers alone shape a dismal view of homeownership, but couple them with this statistic, and for women, it gets bleaker: Single men are able to afford a larger share of U.S. homes than single women — 52 percent vs. 39 percent…

Despite inventory challenges, it’s important to note that single buyers aren’t necessarily looking at the same homes that couples might be eyeing. Couples may want the yard and be willing to look for residences in the suburbs, while singles may not be willing to lose the amenities that city living offers. And Dantzler, the broker, adds that there are still starter homes out there for single buyers. Just keep in mind that “starter home means different things for different people,” she said. Also, singles exploring homeownership may want to look into low-down-payment home loans, such as the Federal Housing Administration loan that allows for a 3.5 percent down payment.

The single-person household may be popular because one gains autonomy but this may come with a cost: a financial cost. A couple can pool resources and accumulate wealth more quickly. Could the recent drop in homeownership in the United States be tied in part to more people choosing the single life and not having as many resources for a home?

Of course, perhaps the dream is really to be a single-person household with a high income or lots of wealth so one does not need roommates

A benefit of having a higher income: less likely to have roommates

Even as single-person households are the largest group of households in the United States, it takes more resources to have that level of privacy:

“When you look nationwide at the share of households that had roommates or lived with parents, it did start to increase in the years just before the housing bust,” said Aaron Terrazas, senior economist with Zillow. “But it really took off during the financial crisis” that began in 2007, often referred to as the Great Recession.

Since 2005, the doubling up has increased at the same rate among employed and unemployed adults, regardless of age, Zillow found. The share of 20-somethings living in doubled-up households climbed faster than any other age bracket, but people in their 50s came in second.

The median individual income of an employed adult in a doubled-up household is $30,000, compared with the $45,000 earned by those living alone.

“I think there are both demographic and economic forces driving this doubling up — living with parents or living with roommates,” Terrazas said. “In the near term, I don’t see those forces turning around.”

I suspect more Americans would want to live alone – for reasons that sociologist Eric Klinenberg describes in Going Solo – but resources can hold them back. I wonder if the same trend is present on college campuses: those students with more resources live in solo rooms or can live in nicer settings off campus while others may not be able to access those residences.

More broadly, this gets at what Americans think about privacy and intimacy, personal space, and what home should be like. Are roommates really only an option until you find something better (a family or relationship of your own choosing, living by yourself because you can afford it)? Does this help explain why Americans have such big dwellings compared to much of the world (they need space to get away from others who live in the same residence)?

Multigenerational families, multigenerational mortgages

A new Fannie Mae program allows salaries of relatives living in a home but not listed on the mortgage count towards the mortgage:

New rules adopted last month by Fannie Mae will allow mortgage applicants to qualify for a home loan by counting the salaries of other relatives who live in the house — although their names may not be listed on the mortgage…

“For the first time, income from a non-borrower household member can be considered to determine an applicable debt-to-income for the loan, helping multi-generational and extended households qualify for an affordable mortgage,” said the news release issued by the mortgage giant, which said its research found such extended households typically have incomes that are as stable or more stable than other households at similar income levels…

“What we don’t want is for a borrower to qualify for a mortgage on $5,000 monthly income and then family members move out and the borrower only has $2,500 income. Then we are setting ourselves up for a mortgage problem like we had not too long ago.”…

HomeReady loan applicants also will be required to complete an online education course preparing them for the home buying process.

If more families are living together – probably more commonly with grandparents or children – then there are more resources available to go toward housing costs. And it is not easy to find affordable housing in many metropolitan markets, leading to more extended family arrangements like this in the first place.

It will be interesting to see (1) how many mortgages are made in this program and (2) what the success rate is over time given the concerns expressed above about household members moving out and harming the ability to pay off the mortgage.

One last note: a move such as this provides a reminder that this country is still committed to pushing homeownership.

McMansions redeemed by multigenerational households?

At the end of an article on the rise of McMansion sized new homes, here is a suggestion that who purchases such homes might be changing:

The culture of the McMansion itself could be changing, too. As minorities and multigenerational households drive growth in the cities and suburbs where construction is most abundant, buyers may want larger homes not so much out of a lust for space but to have enough room for their families.

”We’re going to have much more diverse buyers coming into the market,” Hepp says. “Developers are adjusting to [multigenerational housing]. In some cultures it’s quite normal to have different generations living under the same roof.”

If this comes to pass, would it change the negative reputation McMansions have? Is it more acceptable to have large households in such homes compared to having “a lust for space”? The houses would still be the same: large, architecturally odd, part of suburban sprawl, perhaps much larger than other nearby properties. Yet, having more residents would cut down on their inefficiency and they might be more cost efficient.

Another complication is the mixing of race, ethnicity, and class in this possible trend. Would neighbors have more to object to if they dislike the McMansion as well as the new groups of people moving into the community?

My quick prediction: this trend wouldn’t redeem the McMansion for many of its critics but they do provide an interesting option for larger households.

Identifying the pockets of carless Chicagoans

With more Americans living alone and significant transportation costs for middle-class Americans, where do the carless Chicagoans tend to cluster?

So where do those carless Chicagoans live, and how many of them are there? A lot, it turns out. If you break down Chicago by cars and household size using 2012 census numbers, these are the only groups of more than 100,000:

One person, one vehicle 193,174
One person, no vehicle 168,004
Two people, one vehicle 135,143

Along the northern lakefront, around half the households don’t have a car; there are pockets in the Near North Side and Lake View over 60 percent. In one Edgewater tract, it’s over 70 percent. It’s not the highest percentage, though—there are two tracts in one of the poorest stretches of the South Side, between U.S. Cellular Field and 47th Street along the Dan Ryan, above 80 percent.

As you move north and west and the city gets less dense, the percentage of carless households drops off. There’s an exception, though: one tract in Logan Square, adjacent to the California Blue Line stop, where 41 percent of households don’t own a car. The “twin towers” transit-oriented development that’s going up at 2293 N. Milwaukee, and causing controversy as it goes, will live right next to that tract.

If I had to guess, this is related to income, age, more expensive parking options (for example, having to pay for a garage spot as opposed to plenty of street parking), and housing types (single-family homes which are more attractive to families versus apartments, condos, etc.). How well would these clusters line up with where the Creative Class lives?

The headline suggests that this is has led developers to respond with what they are proposing and building. Yet, the article doesn’t say much regarding these changes. For example, how about more shared streets like have been proposed for a few spots in Chicago? How about more bike lanes in these areas? How about more high-rise housing? If these population clusters hold and developers are indeed responding, these could be very unique places in a few decades.

Daily water allocation next in dry California?

Groups in California are considering daily water allocations per household to help conserve water in the current drought:

The latter represents the amount of water you are allowed to use per day. If you don’t know it, you probably should. Not knowing could cost you money. As California’s severe drought moves into a fourth year, state and local water agencies are working on something called “allocation-based rate structures,” a kind of precursor to water rationing that’s all the rage in Sacramento and in some areas such as Santa Cruz, Irvine and Santa Monica.

Here’s how it works: Your local water company, special district or city assigns you and your household a number in gallons — a daily water allocation. Usually, one number applies to maximum indoor water use, i.e. showers, kitchen and bathroom faucets, dishwashers, clothes washers, etc., and an extra allocation is assigned for outdoor use such as lawn irrigation.

Using census records, aerial photography and satellite imagery, an agency can determine a property’s efficient water usage.

At the Irvine Ranch Water District, number of residents, amount of landscaping and even medical needs are factored into a household’s water allocation or water budget.

It will be interesting to see how this is received and how much arguing there might be about the calculations. As the article goes on to note, one popular method is to start charging really high rates for people who exceed their water levels, which in some places are already set at about 60 gallons per person.

The End of the Suburbs – again?

The author of a new book titled The End of the Suburbs suggests the American suburbs will change in response to several threats:

Q: So which demons are breathing down suburbia’s neck?

A: There’s a lot. To begin with, the nuclear family, which filled our suburban houses, is no longer the norm — marriage and birthrates are steadily declining, while the number of single-person households is growing rapidly. If the demand for good schools and family-friendly lifestyles has historically been the main selling point of suburban life, those things aren’t going to matter so much in the future.

Another thing is that Americans are just sick of driving. They’re sick of commuting. The number of miles driven per year is in decline. And the cost of gasoline has meant that homes on the suburban fringe are not such a bargain.

At the same time, cities, in general, are making a comeback, especially among young adults and even among families with children.

Q: Among the factors you write about in the book, which one is the biggest influence?

A: One of the things that’s the most potent of all of these factors is the demographic situation — the birthrate is falling, the marriage rate is falling, the nuclear family is rapidly becoming a minority household type in this country — 70 percent of households won’t have any children in them by 2025. When you look at those figures and the way our population is changing so dramatically, it hits home — we have built all these houses for a type of household that isn’t going to exist anymore.

But on the question of what happens to the suburbs, the author then goes on to suggest they won’t completely disappear as they will still appeal to a segment of the market.

A few things to note:

1. Critics have suggested the end of the suburbs for decades now. That doesn’t necessarily mean they won’t decline or disappear in the future; it just means plenty of people have made this prediction.

2. Perhaps the most important thing for the future of the suburbs is whether the adaptations to these threats take place within the suburbs or in cities. For example, there is already a push to more density within suburbs that might approximate more urban conditions without having to actually be in cities. These denser pockets would limit driving and also possibly provide different kinds of housing.

3. Her suggestion about the changing household composition is intriguing: see this earlier post about Going Solo in the suburbs.