Millennials are some of the cause for the current housing shortage according to a MSN article by Laura Kusisto. Let’s take a look at some of the reasoning behind the claim.
Who are Millennials?
First of all, who are ‘millennials’? You can see by looking at this infographic from Why Millennials Matter, that Millennials are individuals born between 1980 – 2000. They are considered our largest generation yet. They are expected to make up to 50% of the workforce by 2020 and 75% by 2030.
Convenience is King
Second, the younger population is choosing where they are moving based more towards ‘convenience’. How close it my favorite restaurant? How long will it take me to commute to work? What kind of activities are there around me? I have to have my morning coffee from my favorite coffee shop! (What’s your favorite coffee shop in town?)
The younger generation is said to like having their favorite amenities around them. It is more of a priority than having land, or a large garage. We are seeing this trend where apartments or condos are being built over commercial store fronts that house fitness centers, hair and nail salons, and even grocery stores.
For example, mixed use retail and residential properties such as Olympic Square Townhomes have townhomes above commercial offices below. Built in Gig Harbor, Washington they boast, “Welcome to Gig Harbor’s best townhome community! Walk to the upscale Harbor Green’s boutique grocery store, Markee coffee/wine bar, or Anytime Fitness. Close to pools, parks, playgrounds, fitness and sports facilities, the gorgeous downtown harbor walk, and the up style Uptown Gig Harbor shopping center and dining, When you call Olympic Square home you literally steps away from some of the greatest luxuries in Gig Harbor.” So, you have your home, your amenities, and your community all in one convenient location.
The focus is less on having a larger or newer home. The focus is more about convenience.
Suburban vs. Urban Housing
Another issue is the amount of building in suburban areas is lower than normal. Typically, building in suburban areas tends to be cheaper. The suburbs are also what usually drives housing construction. People used to move to the suburbs when they wanted less crime and a more relaxed feel than is typically idealized in urban areas.
“While new home sales within 5 miles of the centers of 10 of the country’s priciest and most densely populated metropolitan areas have surpassed levels from 2000, they remain more than 50% below where they were in 2000 when you go more than 10 miles out. The year 2000 is often used as a benchmark for a normal market, before the boom and bust of the mid-2000s.”
Also, Kusisto reports, “At the same time, high land costs in central cities have pushed developers to focus on higher-end housing geared toward high earners instead of younger people just starting out.”
Less suburban homes, and less starter homes being built then circles back to Millennials having to finding housing in urban areas. That means less choices for the Millennials. So, maybe it isn’t as much the Millennials fault, as it is the lack of what is available. Not to mention that the fact that housing in the urban areas is more rentals than home purchases.
Then there is the other side of the coin. Millennials are waiting longer to purchase a home. Not because they want to. But because they can’t due to the crushing debt they have incurred getting their higher educational degrees. So maybe it isn’t so much due to convienvece; but due to an inabilty to qualify for purchasing a home. You can read more about the upside down financial position our youth today are facing due to the requirements of having to have a degree in order to get a job here.
So, what do you think? Do you think Millennials are to blame, or are they a victim of lack of housing, just like everyone else? We’d love to hear your comments. If you would like to read the full article by Laura click here.