The Millennial Effect
Drop that microunit blueprint—64% of the 500 readers who responded to our recent poll think developers are catering too much to Millennials. While many of you believe walkability is here to stay, you're concerned about the insistence on the center city, excessive focus on luxury development, and the trend to microunits. Many responded that Millennials' tastes will change (especially when they have kids, who'll need more wall space to accidentally scuff), while others say this is part of a macro cycle. As one reader puts it: “Urban TODs will be replaced by SODs (school-oriented development). The next generation will find the hipsters as disdainfully dated as the punk rockers of the late '70s found the hippies of the '60s. And the beat goes on..."
Avison Young’s Cody Wilder believes the problem with catering to Millennials is that many of them have poor spending habits (plus major student loans and overwhelmingly salaries under $50k) that are buoyed by their families. As their parents age and need more healthcare, there will be less money to assist offspring. Couple that with wealth inequality and wage stagnation, and Cody believes Millennials won’t be able to afford the trendy areas for long. Besides, he’s not sure Millennials really insist on microunit, central-city living—a recent UrbanIgloo study says outdoor space is one of the highest priorities for younger renters (the silent purchasing power of dogs and Frisbees), so we may see them move into close-in suburbs that still provide public transit.
But A&D Investment Group prez Alan Dibartolomeo (here with his wife) is a firm believer in the long-term viability of walkability and the “Millennial hot buttons.” He was involved in the development of AMF Development and Post Investment Group’s Elevé Lofts & Skydeck in Glendale, Calif., which is targeted to Millennials. Design was based on a survey of young renters—it’s got one of the highest walk scores in the country (97) and includes plenty of small units (400 SF), because respondents want to live alone. It delivered last year and reached 90% residential and 100% retail occupancy last month. He believes Millennials may grow into families and leave, but they’ll be replaced by other segments wanting the same thing.
