With developers focused—even obsessed—with the often single, urban, and transient millennial generation in the last decade, families were neglected…
With developers focused—even obsessed—with the often single, urban, and transient millennial generation in the last decade, families were neglected as one of the largest and most critical rental segments.
That neglect may have come at a cost and will likely force developers to catch up with new demand for family-rental housing, according to a new report by RCLCO and the ULI Terwilliger Center for Housing called, Family Renter Housing: A Response to the Changing Growth Dynamics of the Next Decade.
With the dual trends of declining homeownership and rising housing costs, developers may now have the incentive they need to focus on families over the next decade, according to RCLCO senior managing director Adam Ducker, vice president Jack Ross and analyst Monica Corley, who wrote the report.
The authors note there are various forms of new rental family housing emerging and they outline the continuing challenges to construction, including developer preferences, entitlement, zoning, and other regulatory conditions.
The report’s findings send a clear message: families are a large and untapped market.
Families comprise one-third of the entire renter pool in the US, representing more than 13.5 million households—which is more than triple the number of single millennial renters in the country.
But despite the numbers, an interesting dynamic happened along the way. As millennials came of age and began flocking to urban and mixed-use neighborhoods throughout the country, developers followed them and built to their preference—which was denser buildings with units with smaller floorplans.
The shift caused the average size for a new rental apartment units to decrease over the last decade to the detriment of families, which needed larger floorplans and more space, said the report.
According to the US Census Bureau, in 2017 family renters were 38.06% of single-family detached renters, compared to other renters at 20.46%. They made up 8.6% of single-family attached renters but about half, or 48.9%, of multifamily renters.
Those numbers are expected to explode as many members of the millennial generation are poised to have children of their own in the years to come—joining the ranks of families in need of rental housing nationally, according to the report.
Over the next decade, the US Census Bureau expects the number of people between the ages of 30 to 50—the prime age range for child-bearing – to grow significantly. While the number of these households increased by roughly one million between 2010 and 2020, it is projected to grow by approximately eight million between 2020 and 2030.
As a result, family-friendly rental communities are emerging across the country with larger floorplans, more amenities, and locations that appeal to households with children as developers come on board.
These include suburban single-family rental apartments, such as the Casa Mirella Community in Windermere, FL.; rental townhouses such as The Village at Brighton Place Community in Chandler, AZ., that offer the mixed-use neighborhood feel; detached and attached apartments like those at Olympus at the District Community in South Jordan, UT., with suburban amenities in denser, smaller rental apartments; and urban rental apartments, such as Sunrise on the Monon Community in Carmel, IN., that value urban lifestyles while renting in highly amenitized, maintenance-free communities.
Source: By Suzette Parmley | June 08, 2020, at 09:40 AM | The original version of this story was published on New Jersey Law Journal
Randolph is a Multifamily Investment Sales Broker with eXp Commercial servicing Multifamily Buyers and Sellers in the Greater Chicago Area.