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April 2016

Builders adding multigenerational models to meet growing demand

Multigenerational households are a growing segment of the country's population, according to John Burns Real Estate Consulting (JBREC), which expects the numbers to steadily increase. Accommodating them presents a big opportunity for builders, the CEO of that company suggests.

Research by the Burns firm shows nearly 21 million households already live with multiple adult generations in homes not designed for multigenerational living. The survey of 20,000 home shoppers also found 44 percent of them said they'd like to accommodate their aging parents someday, and 42 percent said they plan to accommodate their adult children.

Burns Consulting attributes the growth to various reasons, including the recent recession and resulting unemployment among young workers who continued living with their parents. Later marrying ages for millennials and retiring baby boomers are other drivers.

Immigration is also contributing to rising numbers of multigenerational households. In Asian and Hispanic cultures, where multigenerational living is common, that trend accompanies them when they move to the U.S. 

"Most of these people would much prefer a house designed with their living situation in mind, and a large subset of them are homeowners or renters who can afford to purchase a new home," stated Chris Porter, the company's vice president/chief demographer.

To cater to this growing demand some homebuilders are offering multigenerational floor plans. National production players, like Lennar and Pardee Homes, and smaller, local builders have designs with separate entrances, main-floor bedroom suites with private kitchenettes, and even separate outdoor spaces.

Such companies are being rewarded according to some data. Year-over-year sales of Lennar's "NextGen" home grew by 24 percent in the third quarter of 2014. Its plans are offered in more than 200 communities nationwide (including Greater Seattle-Tacoma, the Olympia area and Vancouver, Wash.), with an average sales price about a third higher than the company's overall average.

Company founder John Burns said the most successful "homes within a home" incorporate five elements:

  1. Privacy. The space should have its own entry and ideally a private patio.
  2. Dedicated bathroom. A dedicated bathroom should not be easily accessible to other house members or guests.
  3. Food area. A separate living space does not need a full kitchen, but it should at least have its own kitchenette to prepare simple meals and drinks.
  4. Entertainment area. A non-bedroom area for hosting a guest or watching TV without interrupting the rest of the family makes the space feel less like a single room.
  5. Controls. Having its own temperature controls makes the separate space that much more personal.