latest housing numbers reflect an uptick in Americans abandoning their
white-picket fences and two-car garages for a sky-high abode with a
downtown view, but the question is how long the shift away from suburbia
June 2002, several years before the peak of the housing boom, President
George W. Bush famously proclaimed that the American Dream is to own a
home. At the time, construction workers across the country were gearing
up for a wave of residential building, and banks were beginning to dole
out millions of shaky mortgages to eager new homeowners. “I do believe
in the American Dream,” Bush said
at the time. “[And] owning a home is a part of that dream, it just is.
Right here in America if you own your own home, you’re realizing the
years later, that dream has changed. Americans are abandoning their
white-picket fences, two-car garages and neighborhood cookouts in favor
of a penthouse view downtown and shorter walk to work. The latest
housing data shows traditional, single-family suburban home construction
is way down: after a walloping all-time high of 1.7 million
single-family homes began construction in 2005, single-family housing
starts have contracted after the housing bust to just over 600,000 in
2013. During the five years since the recession, single-family
homebuilding has remained lower than it has been in decades.
statistics released Wednesday show that fewer people are buying
single-family homes, too: the seasonally adjusted annual rate of
single-family house sales in March was 384,000, 13.3 percent lower than
the same month last year.
Meanwhile, construction of residences with five or more apartment
units—multiplexes, condominiums, high-rises—have reached their highest
share of overall construction since 1973 (aside from an outlier year in
1985). “These days the market is driven much more by people who are
either choosing to live in the city or in the near-in suburbs,
particularly people who are just getting their first job or don’t have
confidence that their job is going to last long enough to warrant buying
a home,” says Ken Simonson, chief economist for the Associated General
Contractors of America. “The multifamily building trend is happening
Americans are experiencing an urban renaissance of unanticipated
proportions, as young people graduate college and flock to cities,
delaying buying a home and perhaps rejecting the suburban ideal
altogether. In 2005, multifamily housing accounted for just 17% of all
housing starts. In 2013, multifamily housing accounted for fully 33% of
starts. Data released last week on housing starts in March reinforce
that trend, with multifamily homes, a good portion of it high-rise
apartment buildings, accounting for 40% of all new construction.
That’s because people are moving to cities: net migration was the
largest contributor to population growth in all but five of the 50
fastest-growing metro areas. Census data released last month show that
metropolitan areas across the country grew at a faster rate last year
than the rest of the country, with cities like Austin, Texas and
Seattle, Washington growing especially swiftly. Metro areas grew faster
than the U.S. as a whole between 2012 and 2013 (0.9 percent compared
with 0.7 percent). For millennials today, leaving Levittown for the
bright lights of downtown has become a rite of passage.
“There’s been a surge in urban apartment building,” says chief
economist for the National Association of Homebuilders, David Crowe.
“The 25- to 34-year-old age group is focused on living near their peers.
They want be socially engaged and live near work. They want to reduce
their automobile use. All of those things aim at high-density,
The high demand for city living has led to a wave of high-rise
construction projects across the country, in cities such as New York and
San Francisco. But the changes aren’t just occurring in the biggest
traditional urban centers. In Kansas City, Missouri, developers broke ground on a 25-story, $79-million apartment building just last week, and in cities ranging from Minneapolis to Dallas,
apartment buildings are rising above the skyline. And low-rise
apartment complexes are sprouting up in the inner suburbs and outer
edges of cities as well.
Young people are interested in a different kind of life than earlier
generations it seems. “Unlike their parents, who calculated their worth
in terms of square feet, ultimately inventing the McMansion, […] this
generation is more interested in the amenities of the city itself: great
public spaces, walkability, diverse people and activities with which
they can participate,” Ellen Dunham-Jones, a professor of architecture
and urban design at Georgia Tech writes in an email.
The growth in multi-family residential construction isn’t purely
aspirational, however. Many people are delaying buying a home out of
sheer necessity. After the easy money of the subprime mortgage market of
the mid-2000s led the country to the brink of a depression, banks have
tightened their lending standards,
making it much more difficult for homebuyers to purchase a property.
The Urban Institute estimates that strict credit standards prevented
between 300,000 and 1.2 million lenders from taking out mortgages in
Coupled with the uncertainty of the job market and the mountain of
student loans recent graduates have to pay off, it makes sense that more
people are choosing to rent instead of making the colossal investment
of buying a home. Some researchers believe that millennials will
eventually move back out to the suburbs to raise their children.
Whether or not the trend will last is a matter of debate, however.
“I’m not convinced that this is a permanent change,” says Crowe of the
move toward urbanization. “When you have a family or children, you don’t
want to just be hanging out with people, emulating Friends.” He adds, “The ownership desire seems to be an ingrained preference. People need to live in their own homes.”
now, however, young people prefer cities. According to the Nielsen
Company, 62% of millennials prefer to live in mixed-use communities
found in urban centers, closer to shops, restaurants, and the office.
And as the number of apartment buildings under construction continues to
rise, it appears the exodus to the cities won’t be slowing anytime
Living in the suburbs is like dying a slow death. Glad to see others are realizing this. I don't want kids or some white picket fence and cookie cutter lifestyle. I want to travel, I want atmosphere, the burbs are boring af.
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