Earlier this week I stumbled upon this entertaining article from the Guardian talking about how expensive housing is in London. The author’s tongue-in-cheek suggestion was to setup a new miniature London in the middle of nowhere where everyone could flock for affordable housing, but where many of London’s attributes could be exported: “We can all refuse to wear socks and sell each other overpriced cocktails in jam jars.”
But affordable housing is not the reason why people want to live in places like London and New York. If it were, they wouldn’t be coming. Instead, they come for lifestyle, wealth creation, and the dating market – among other things. However, at a certain point, usually when they form families and start to need/want more space, they start looking around.
an article
talking about the difficult time that golf-centric country clubs are having in attracting young people (and minorities and women). Their reasoning is that Millennials are saddled with student debt and can’t afford the fees; Millennials find these sorts of clubs stuffy and overly formal; and Millennials are put off by the long history of these places being only for rich white males.
The result is that golf and country club memberships are down about 20% since 1990. In the 90s there were more than 5,000 full service clubs of this type in the US. And today it’s somewhere south of 4,000. In the 90s, about 9 million people aged 18 to 34 played golf (again in the US). And today that number is somewhere around 6.2 million. All stats taken from the article.
But at the same time, the article argues that Millennials may still like country clubs, they’re just about 10 years behind because of higher education, travel, and delayed family formation. The article also talks about the rise of private clubs like Soho House, as well as others. And so here’s one counter argument: Millennials are open to private clubs and many have the means. They just want them to be, well, cooler and more urban.
As a young person who largely fits within the trend line described in the CityLab article, my gut tells me that this is largely a case of changing consumer preferences and urbanizing wealth. That’s why we’re seeing established country club operators open up “urban basecamps.” But that’s my view. What is yours? Let us know in the comments below.
showing how relationship status impacts where people tend to live in London. The purple areas indicate an “above average concentration” of a particular relationship status. As you can see, single people tend to live in the core of the city, and when they get married, they move out to the periphery. Intuitively, this probably makes sense to you.
However, I’m always curious as to whether this trend happens more because of consumer preference (people don’t want to raise kids downtown) or because of economic necessity (they can’t afford anything beyond a shoe box apartment). Because if it is largely out of economic necessity (and the Guardian article would suggest it is), then we’re not creating the inclusive cities and neighborhoods that all city builders like to talk about.
So how do we get better at this?
In my view, and I’ve argued this before, the first step should be about improving supply. That is: get more housing built. And the way to start doing that is to make land available and improve the approvals process for new developments. In a recent McKinsey report, they referred to my first point as “unlocking land.”
“Land cost often is the single biggest factor in improving the economics of affordable housing development. It is not uncommon for land costs to exceed 40 percent of total property prices, and in some large cities, land can be as much as 80 percent of property cost.”
The reason this is important is because most big cities operate with massive supply deficits. There simply isn’t enough housing. And so if you can address that at a fundamental level, you can actually do a lot to start improving affordability.
