Multigenerational Home Trends

Meyers - Advisory. Capital. Research.

An increasing trend in new home product marketing and design is multigenerational homes.    This marketing approach is becoming more common among architects and homebuilders who are responding to an increasing demographic: multigenerational households. According to the National Association of Homebuilders, although home sales were down in recent years, this niche product appears to be solid and growing.

Demographics

  • According to an article in Business Week in November 2011, the U.S. Census Bureau estimates that multigenerational households increased by 30% between 2000 and 2010.  Some of the reasons contributing to this demographic trend include the poor economy, which caused “boomerang kids” to return home after college, military, or after losing jobs, as well as the aging baby boomer population which moved in with their kids to save money or help with child care.
  • The Census Bureau reports that during the recent economic recession the doubling up of adults in households increased across the country.   That particularly affected young adults, with 5.9 million people aged 25 to 35 living in their parents’ home in 2011, up from 4.7 million before the recession.  That means in March of this year 14.2% of young adults were living with their parents, up 2% since 2007.
  • Once common, multigenerational households have declined in modern times, though they are making a comeback due to economic factors. They made up 24.7% of households in 1940, then dropped as low as 12.1% in 1980 but rose to 16.7% in 2009, according to a study by the Pew Research Center that looked exclusively at households where everyone was related. The Census Bureau found last spring that 18.3% of U.S. households contained adult relatives or roommates, up from 17% four years earlier.
  • For many ethnic groups, particularly Latinos and Asians, a home embracing many generations is common.   In 2009, 23.4% of Latino households and 25.8% of Asian households were multigenerational, according to the Pew study.

Product Features:

  • Lennar, Pulte Group, and KB Home are some of the leading homebuilders that are offering new homes targeting multigenerational families.   These builders include features such as second master bedrooms, kitchenettes, and separate entrances.   The concept is designed for baby boomers whose aging parents are moving in with them or for buyers whose adult children are returning home to live.   The arrangement also benefits winter visitors coming to see their children and grandchildren.
  • Pulte offers new homes which come with stand‐alone guesthouses or the option of converting attached garages to “casitas”.  Other Pulte features to accommodate extended families include second master bedrooms located on the ground floor, for elderly family members.
  • Because these homes can be accessed from inside and outside, they are not considered multifamily units and are not subject to multifamily zoning.
  • The “home within a home” has a second front door leading to an area separate from the main house that consists of a combination kitchenette, sitting room and laundry plus a bathroom and one bedroom.  In some cases there is an option for a second bedroom by sacrificing the formal dining room in the main house. Kitchenettes, as opposed to full kitchens are included, to comply with single family zoning requirements.
  • Other features may be included for specific buyer profiles. For example, in targeting Latino buyers, family social spaces and front porches are important, while study areas near the kitchen and mud room areas for shoe storage are important for Asian buyers.
    Sample:  Lennar’s Multigenerational Floorplan

Product Locations:

  • Lennar unveiled its first “Next Gen” homes in September in the Phoenix area and expects to offer them in as many as 40 communities. Besides Phoenix, the company is targeting California’s Inland Empire and Central Valley, followed by Las Vegas.   The company states that these are all areas that have suffered some of the biggest price declines since the U.S. housing bubble burst, so there is a need for new designs to boost sales.   Kevin L. Crook, an Irvine architect who designed the Next Gen homes in Rosena Ranch and Rancho Bella Vista in San Bernardino County, said most jurisdictions do not mind a grandparent or adult daughter with a small child occupying such a unit, which is about 500 square feet, but “they don’t want an entire family moving in.”   Lennar has also started construction of its first Next Gen homes in four Tampa Bay area communities that feature integrated “home within a home” floor plans for live‐in relatives or guests.
  • Pulte Group launched its Anthem communities for all ages in Arizona, Nevada and Colorado.    Although these multigenerational communities stop short of putting several generations under one roof, they build close but separate sections for active adults, families and younger couples: one‐story houses and golf courses down the street from larger, single‐family homes near playgrounds and schools.
  • The New Home Company is opening Lambert Ranch in Irvine, offering three neighborhoods with generational estates, guest houses and casitas, and private quarters with a separate outdoor entrance to a living suite.  Some of the homes will feature the ability to create family compound homes, with two separate residences on the same property.

For immediate release
Meyers
California Market Watch, April 3, 2012
Blayne Brinket, Senior Consultant
bbrinket@meyersllc.com
Download pdf file here 

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