Possible limits even as more Americans seek housing that accommodates multiple generations

If more Americans want to live in multigenerational households, can they find homes that make room for this arrangement?

But for complex reasons that still puzzle researchers, multigenerational households are now on the rise once more. As many as 41% of Americans buying a home are considering accommodating an elderly parent or an adult child, according to a survey conducted by John Burns Real Estate Consulting. Living with your parents (or your adult children) has plenty of potential benefits–everyone tends to save money, it can potentially benefit health outcomes, and you get to spend more time together.

Just one problem: American housing stock, dominated by single-family homes and connected by cars, isn’t really designed for it…

The advent of commercial air travel and the rapid expansion of American suburbia made inexpensive, single-family housing–and cross-country travel–attainable for more and more people. By 1950, just 21% of American households contained two or more generations. New funding for nursing homes from the Federal Housing Administration led to a boom in private nursing homes in 1950s and ’60s, and over time it became more and more normal to self-select into senior housing rather than living with your children. By 1980, the number of multigenerational homes had dropped to just 12%, according to Pew

But in any case, homes designed specifically for multigenerational living are still a small segment of the housing market. Far more common are families that have renovated their homes to suit aging parents or adult children, like the architect Cini, whose firm Mosaic Design specializes in senior design, particularly assisted living centers. Her personal experience with multigenerational life eventually led to a book, Hive, a practical how-to for other families who, either by necessity or choice, are moving in together. In large part, Hive addresses the unspoken taboos and tensions of living with your parents and grandparents.

No doubt there are complex social and cultural shifts behind this. The 20th century of mass American suburbanization may be an outlier in human history with the significant move to private single-family homes.

The larger issue that is reflected in this housing crunch may be that of increasing individualism and autonomy in recent centuries. Even the discussions of possible solutions to this housing issue betray this. The nursing home frees the family from obligations to care for elderly or infirm family members. Cohousing provides more community but residents still retreat to private units. Making alterations to a single-family home to accommodate family members can often lead to in-law suites or separate entrances.

Put another way, economic conditions and/or changing relationships between generations mean that more families want to live together but there are limits on how much autonomy or privacy family members are willing to give up. How a family arranges the space in its home could take many different forms. I don’t think anyone is recommending family members all sleep in just one or a few rooms, something common to much of human history. But, living together also does not necessarily mean that family members sharing an address actually see each other that much. A converted single-family home could be more like a duplex than a tight multigenerational setup. Family may be good to have close but perhaps not too close?

Or, to put it a third way, how many Americans would choose these multifamily or cohousing setups if the price of housing was not too high? The social benefits of a multigenerational family home could be high but Americans also value their autonomy.

 

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.

Rise of the granny flat in Portland

Here is another version of the smaller house movement: changes to regulations in recent years have led to more “accessory dwelling units” in Portland.

And additional living spaces are springing up everywhere, providing affordable housing without changing the feeling or texture of established neighborhoods the way high-rise developments can…

Eric Engstrom, a principal city planner, has seen these small structures become increasingly popular during his 16 years working for the city. And as he put it, “Given the low vacancy rate, when they’re done, you can rent them out in about an hour.” Which means that adding an accessory dwelling unit, or A.D.U., increases the value of a piece of property.

Since the 1990s, Mr. Engstrom said, zoning laws in Portland have been slowly changing to accommodate the buildings. “There’s been a lot of pressure on us to allow them,” he said.

But it was in 2010 when the biggest changes took place. That was when the city relaxed the limitations on size and began offering the equivalent of a cash incentive by waiving the hefty fees usually levied on new development. Other cities in the Northwest have been moving in this direction, but Portland is the first to offer a significant financial benefit and one of the few that does not require owners to live on the site, provide additional off-street parking or secure the approval of their neighbors — all of which have proved to be obstacles elsewhere. Apart from Santa Cruz, Calif., and Austin, Tex., where secondary dwellings have long been allowed, Portland is alone in this country in its aggressive advocacy of the units.

Seems like this approach could be a reasonable solution in many communities: allow small dwellings that can be used for multigenerational family space, generate a little extra income, provide more affordable housing opportunities, and/or expand the inhabitable space for the household. Yet, the article says little about why this has moved forward in Portland and a few other places but hasn’t caught on elsewhere. Is it seen more favorably in cities with limited space and relatively high real estate prices? Does it require more progressive politics?

Uptick in bigger homes but with some twists: more infill, multigenerational, and upsized homes

Some recent evidence suggests big homes might be making a comeback in America but with a few twists:

The average size of a newly built home increased 3.7 percent in 2011 from 2010, according to the U.S. Census Bureau. That was the first annual increase since 2007 and indicates that home builders are seeing demand for larger spaces. The demand, however, is not where it used to be. Home buyers are less willing to head out to the so-called “ex-urbs” to get their larger space,” according to the latest findings from the American Institute of Architects.

“In many areas, we are seeing more interest in urban infill locations than in remote exurbs, which is having a pronounced shift in neighborhood design elements,” said AIA Chief Economist, Kermit Baker. “And regardless of city or suburban dwellers, people are asking more from their communities in terms of access to public transit, walkable areas and close proximity to job centers, retail options and open space.”

Half of residential architecture firms highlight demand for multi-generational housing, up from 44 percent in 2011. Fifty-nine percent said access to public transportation is key, up from 47 percent a year ago.

More homeowners are also upsizing what they have, with 58 percent of architects reporting improvement in additions and alterations, up from just 35 percent a year ago; kitchen and bath, as usual, top the must-have list.

These factors may make new McMansions more appealing. Infill locations might lead into teardown situations but this could be preferable to sprawl. Multigenerational housing makes better use of the large houses and they appear less wasteful. Upsizing helps people build value in their home and not contribute to sprawl. While these are still big homes, they don’t sound like the exurban cookie-cutter McMansions critics love to attack.

Another note from this article: it suggests in the final paragraph that McMansions are usually thought to have between 3,000 and 5,000 square feet. This seems somewhat right to me though this could be on the conservative end. I’ve seen plenty of instances where a home over 5,000 square feet is called a McMansion and sometimes it seems like the upper end, moving into mansion territory, might be more like 8-10,000 square feet.

Increase in McMansion construction in Australia

The real growth in McMansions may be taking place in Australia:

But research reveals that while the size of Australian families is shrinking, our appetite for McMansions has supersized, with construction of six-or-more-bedroom homes jumping 21 per cent during the past five years.

And the number of five-bedroom McMansions increased 20 per cent over the same period, according to the 2011 Census data.

Demographer Mark McCrindle said despite forecasts of a McMansion glut in Australia – similar to parts of the US – the McDonald’s of housing is a vision of things to come rather than a relic of the past.

“McMansion popularity is being fuelled by the Sandwich generation, multigenerational households where parents have grown-up children and their own parents living at home,” Mr McCrindle said.

“It’s about affordability. The McMansion is efficient for homebuyers looking for big, cheap housing, it’s also about floor space that is flexible and adapts to a family’s changing needs.”…

Mr McCrindle said while new land blocks are getting smaller, Australians are building the largest houses in the world on those blocks. The average size of a new home is 10 per cent larger than the average new American home.

This raises several questions for me. One, will the fate that befall the United States that was partly attributed to McMansions also befall Australia? The argument made by some in the US is that the overconstruction and overconsumption of McMansions inevitably led to a housing and economic crisis. Is this necessarily the case or are there other factors in Australia that would change the outcome? Second, are these McMansions as bad as critics suggest if a good number of them are housing multigenerational families? McMansions are often criticized for being resource-hungry homes but some may be operating as more affordable housing (for some).

 

More builders looking to offer multigenerational homes

More builders are constructing multigenerational homes:

To be sure, multigenerational living is nothing new. For years people have found creative ways to make space in their house for a friend or relative. The concept is a mainstay in many parts of the world, especially in places where housing is expensive. In the U.S., multigenerational living was relatively common until a suburban building boom helped make housing more affordable.

The Pew Research Center said the trend is on the upswing. Last year almost 17 percent of Americans lived in multigenerational households, including households with parents and adult children, as well as skipped generations with grandparents and grandchildren. That’s up from 12 percent in 1980.

The primary driver in recent years is economic. The recession forced many families to double up to save money, and a tough job market meant that many college grads had to move home. The Pew report showed that the trend actually helped reduce the poverty rate. There’s been a cultural shift, too, in the way of new entrants to the U.S. who are more accustomed to such arrangements.

Stephen Melman, director of Economic Services for the National Association of Home Builders, called it an “underserved market,” and said that a significant portion of these households have the buying power to choose high-quality housing that specifically meets their needs. Future growth of multigenerational households largely depends on the direction of the economy, he said.

Several thoughts on this:

1a. The article hints that the American preference for houses solely for immediate families is an American cultural value (perhaps also helped by relative economic prosperity) as immigrants might be more interested in multigenerational homes. Americans have a tendency toward mobility and weaker extended family ties.

1b. In recent decades, there have been numerous skirmishes in suburbs about how many people can live in a household. Such complaints are commonly directed at immigrants and minorities. So now this would be okay or even desirable if the homeowners are middle- to upper-class whites?

2. The houses mentioned in this article are still quite expensive and cost over $500,000. A multigenerational home might be desirable but how many could afford a new multigenerational home with over 3,500 square feet?

3. It is interesting to note that this article mentions nothing about the possibility of renting out space to people instead of only accommodating family members. Buying a home could be a more attractive prospect if renters helped pay the mortgage. I suspect this is where many suburban neighborhoods would draw the line: family can be trusted but renting out space to people then becomes too much like multi-family housing. Suburban residents think this is linked to transience, a lack of care for the neighborhood, and more unseemly activity.