Since the economic recession, metro areas across the country have seen a shift: a shift in demographics as well as in the housing market. The era of suburban, single family, detached housing is coming to an end, and with it comes a want for multi-family, multi-use, density, and walkability. Metro Atlanta’s housing market needs to begin to reflect these changes.
The suburban landscape is not what it once was. The idea of the “American Dream” single family house with 2.6 children is no longer the reality. Currently, two-thirds of suburban households do not have kids, with that number expected to rise to 85% through 2025. Married couples with children, who usually prefer single family housing, no longer make up the majority of households; as of 2000 they account for only 25% of American households, down from 40% in 1970. There is also a higher rate of poverty in the suburbs now than in central cities, and housing affordability is the #1 problem facing the labor pool. As cities, including the Metro Region, have expanded over time with sprawl, previous “first ring” suburbs are now very much centrally located, and prime real estate for redevelopment, including housing.
Two key shifts in demographics are happening. Millennials are poised to be the next generation of home buyers, but many are choosing to rent over buy, not out of necessity, but by choice. The type of housing they want isn’t their parents suburban McMansion, but falls within a denser, walkable, urban environment. At the same time, Baby Boomers, now mostly empty nesters, want the same thing. They continue to be active, yet have no use for a large, suburban household. The general move is back to cities, though not necessarily in a downtown type environment, but to smaller, urban nodes. Metro Atlanta is a prime example of this type of redevelopment, with many small cities concentrated around the metropolis.
So what does this mean for the housing market? It means the two largest generations will dominate the housing market for the next 20 years: singles and young couples, as well as older couples and retirees, both wanting low maintenance apartments, condos, and smaller single-family housing. Dr. Chris Nelson, Presidential Professor of City and Metropolitan Planning and Director of the Metropolitan Research Center at the University of Utah, did a study titled “This is NOT Your Parent’s Housing Market”. In the study, Nelson predicts that the purchasing of said McMansions is a thing of the past, and while younger families still might purchase these larger homes, the prices will have to drop to a level that is affordable to a generation that will not make as much money as their parents. This will leave a huge inventory of large scale, large lot single family homes in the Atlanta Region, tens of thousands probably, which Nelson predicts will be converted into informal, multifamily, affordable housing.
This does not mean a complete end to single family housing as we know it; some Millennials and Boomers will continue to want the traditional, large-scale suburban household. It does, however, mean that there needs to be a range of options available, as the “one size fits most” model of detached single family housing is no longer in overwhelming demand.
Changes that need to be made now in order to keep up with the shifts include rethinking current zoning practices as well as investing in transportation infrastructure. Current zoning, also known as Euclidian zoning, is exclusionary and single use, revolving around automobile use. In order to accommodate what people are looking for in housing, zoning needs to reflect new values, and be inclusionary, multi-use, and encourage a lifestyle with transportation options, including walkability. While expanding MARTA may be too long term of a vision, for now, encouraging development around existing transit stations will help with transportation infrastructure and allow for transit options. Bus rapid transit (BRT) is also an option, as is light rail and expanding on the streetcar system.
Currently, according to Atlanta-based analysis firm Smart Numbers, inventory on homes is not quite back up to pre-recession levels, but home prices are continuing to rise with the demand that inventory is not quite keeping up with. New construction is going to be critical in keeping up with housing demands, especially as the wants of the future home buyers is changing, and with building activity continuing to pick up, the forecast for housing in Atlanta looks promising. As values shift for the people in the region, the policies and building types need to reflect the shift in order to accommodate and provide options for an uncertain future in the housing market.