Since 2009 when the U.S. economy started to recover, housing starts (i.e. new residential construction) have favored multifamily buildings over single family housing. Apartment/condominium construction has grown 3 times faster according to the U.S. Census Bureau (via Bloomberg).

A lot of this multifamily construction is assumed to be rental apartments, but this category also includes for sale condominiums. The classification has to do with building typology rather than housing tenure. (I would love to see how the above graph breaks down in terms of the latter.)

The typical explanations for this trend often relate back to Millennials being poor and saddled with student debt. That’s why they’re delaying buying single family homes. But eventually the expectation is that they will resume doing (largely) what previous generations have done.

Money and the economy, I’m sure, have something to do with the above trend. But I’m not convinced that it’s the whole story. 

There are also shifts happening with respect to consumer preferences and with respect to how we plan and build our cities. That’s why I’m very interested in monitoring family formations and housing choices. 

At the same time, I’m also a Millennial. And whenever I catch myself thinking a certain way, I assume that there are probably other Millennials out there who feel similarly.

Kembangan by Jason Waltman on 500px

Earlier this week I attended RealNet’s Q1 2015 market update webinar for the Greater Toronto Area. If you don’t already subscribe to RealNet, you should consider it. They’re one of the best sources for Canadian real estate market information.

During their webinars, they occasionally run interactive surveys where they ask the audience a question and participants respond using their web browser. On this particular webinar, they asked the following question, which I thought was interesting:

What is the likely housing moving by Millennials in raising their families?

A) Move Up - Embrace urban high-rise housing forms

B) Move Out - Accept extended commutes (including the Greater Golden Horseshoe and Hamilton Area) to find affordable ground oriented housing

C) Move In - Cohabitate parental homes

It’s an interesting question because it’s one that I’ve asked myself a number of times. Sure, Millennials are rushing back to cities and living in high density and walkable communities, today, but what are they going to do and where are they going to move when they start having children?

As a Millennial myself, I know that I’ve always told myself that I want to stay urban for as long as I can (i.e. Move Up). But I’m only one data point. And given the seemingly endless demand for low-rise housing in Toronto, I always felt like I was in the minority. I figured that the majority of people, at least here in this city, still want a ground-related home when it comes time to raise a family.

Putting aside economics, I still think that may be the case for a lot of home buyers. But the majority of people on this week’s RealNet webinar (which would be almost exclusively folks from the real estate industry) either think that preference is going to change (or already has) or that consumers won’t have a choice due to affordability.

50% of the people on the call answered A – move up and embrace urban high-rise housing forms. The balance was about 44% for B and 6% for C.

That’s not the outcome I expected to see. So today I’d like to re-ask this question to the Architect This City Community. Where do you think Millennials are going to move once they start having children? Please let us know in the comment section below.

Houston Sunrise by Cliff Baise on 500px

Urbanists generally don’t like to talk about cities like Houston. It sprawls. It’s car oriented. It’s over air-conditioned. In other words, it’s the antithesis of the dense and walkable cities that urbanists today like to tout as being exemplary. 

But despite all this, Houston is one of, if not the, fastest growing city in America. According to The Economist, the population of the Houston metro area grew faster than any other city in America between 2000 and 2010. And between 2009 and 2013, its real GDP grew by 22%.

So why is that? Here’s a snippet from that same Economist article (“Life in the sprawl”):

Paradoxically, perhaps the city’s biggest strength is its sprawl. Unlike most other big cities in America, Houston has no zoning code, so it is quick to respond to demand for housing and office space. Last year authorities in the Houston metropolitan area, with a population of 6.2m, issued permits to build 64,000 homes. The entire state of California, with a population of 39m, issued just 83,000. Houston’s reliance on the car and air-conditioning is environmentally destructive and unattractive to well-off singletons. But for families on moderate incomes, it is a place to live well cheaply.

So while Houston may not check off all of Jane Jacobs’ boxes, it does provide one important thing: cheap housing. And that’s clearly valuable for a huge number of people.

But the other interesting thing about the snippet above, is that it starts to illustrate how frequently supply constrained markets operate with housing deficits. 

The fact that the entire state of California issued only about 30% more building permits than the Houston metro – which you could easily argue is closer to a “perfect market” – tells me that there’s probably a lot of people bidding for the same housing in California.

That’s less so the case in Houston.