Summit looks at housing demand, design trends

In the years ahead, the residential development industry must offer more choices in design and density to meet the changing housing needs of a growing number of aging baby boomers, nontraditional households without children and immigrant households, according to participants in a residential summit hosted recently by the Urban Land Institute.

Trends in household formations, relocation patterns and the changing form of metropolitan areas, and the impact of these factors on the housing market were discussed at the summit, attended by developers, planners, architects and academics.

Childless households

With the number of U.S. households without children expected to grow by 87 percent between 2000 and 2010, the housing industry "must start building for a different market segment," said John Martin, principal, Martin and Associates Inc., Newport Beach, Calif.

Of these childless households, the most growth will occur in those age 45 and older, necessitating significant shifts in design and marketing strategies, he noted.

Martin added that most builders are still targeting households with children, which account for 30 percent of the market.

"We have a huge opportunity to serve this (childless) market. Now, we are not giving them opportunities (through different products) to make their move more appealing."

Many childless households are seeking to downsize, and while they are demanding high-quality construction, they are not looking to move up in price. As a result, higher density housing likely will gain more acceptance not just in downtowns, but in urban fringe areas as more people move from big homes on fenced lots into maintenance-free housing that emphasizes communal space for recreation and socializing, the participants said.

Among the designs expected to be increasingly popular are those with two master bedrooms and maximum flexibility in the way all living space can be used, they noted.

Brooke Warrick, president of Amer-ican LIVES Inc. in Oakland, Calif., pointed out that baby boomers will age differently than their parents and grandparents; they are less likely to retire in their mid-60s and are more likely to pursue a career change and maintain an active lifestyle.

"They are going to want age-designed communities, not age-restricted communities," Warrick said.

Former ULI Chairman Ronald Ter-williger, national managing partner of Trammell Crow Residential in Atlanta, noted that in addition to changing household composition, other trends are reshaping the housing market, affecting decisions on relocation by consumers as well as businesses.

"The lack of mobility is likely going to get worse, and this will affect the quality of life for people as they move within urban areas," Terwilliger said.

In addition, the trend of neighborhood opposition to any development is not likely to improve, and could ultimately hamper even well-planned projects aimed at improving growth patterns, he said.

Job proximity

A lack of affordable housing close to jobs continues to be a problem in urban areas nationwide, said John K. McIl-wain, ULI senior resident fellow for housing.

In the years ahead, housing is likely to become less affordable, as incomes in the lower-wage brackets remain relatively flat and housing prices get pushed up by land scarcity and entitlement costs, he said.

"Higher density is a response to this, and high-quality design is the key to selling density to the market. The new product is not housing, it's place place with greater density," McIlwain said.