Monday, October 27, 2014

Nelson on the forces behind our housing choices

Arthur C. Nelson teaches planners. His work, it is said, offers a comprehensive view of how the American Dream is changing and why.

This brief set of slides outlines his thesis that the American people will grow rapidly between now and 2050. Nelson estimates the nation will reach 500 million by that year. As the population grows, it will seek more attached housing, and more apartments. More seniors, fewer children, more demand for transportation that will get people to urban centers. Less demand for suburbs.

Here's a brief summary of his thesis that age and demographics will change how people choose housing:
We also know that the propensity of people to buy homes increases as they age, and then it begins to tail off. People will buy homes to build families, then that propensity falls off until about they’re in their late sixties and early seventies, when more people begin selling off their homes instead of buying homes. That is one of the messages I have in my report. This age group between 35 and 60 is the most likely age group to buy homes. They have the means (money), they have the motive (space for the family), and they have the opportunity with new subdivisions and housing opportunities.

. . . changing demographics in combination with changes in home mortgage finance will reduce the rate of homeownership in California by up to 5 percent from 2010 levels and perhaps by as much as 10 percent over the long term. A 5 percent reduction represents a market condition where three-quarters of the demand for new housing in the state’s largest metropolitan planning organization (MPO) areas will be for rental housing. This demand should lead to an increase in existing residential units being used to house multiple or intergenerational households as well as to a variety of hybrid or new housing formats, such as accessory dwelling units or new nontraditional multifamily housing options.

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