The number of multigenerational members from a single family living together in a home, condo or apartment is growing. It’s a good niche for builders, developers, and investors to consider getting into—before the field becomes too crowded.
Having at least three generations live together is hardly new, however, and once was the norm.
Through the decades the trend often changed when members—either the most senior and elderly or grown children—could afford to maintain their independence due to adequate finances and/or better health. One study found that “income growth, particularly increased Social Security benefits,” was the most important determinant of living arrangements, accounting for nearly one-half of the increase in independent living,” according to co-authors Kathleen McGarry and Robert F. Schoeni.
When the Great Recession happened a decade ago, it became tough for both cohorts—older family members living on fixed incomes and younger people unable to find jobs. More moved in together, according to the article, “America at Home: Grandparents in the Attic, Children in the Basement” in The New York Times newspaper.
Nowadays multigenerational living, commonly referred to as “multigen,” again has become popular and for many reasons, according to Jennifer Castenson, director of thought leadership content for Hanley Wood. It can be a way for those in failing health to live safely and affordably rather than in more expensive assisted care facilities or nursing homes. Older family members, if in good shape physically and mentally, can look after young children rather than have parents hire outside caregivers. In addition, the youngest generation can provide companionship for family members who might otherwise live alone due to a death of a partner or spouse or divorce.
Recent stats point up these changes. A 2016 Pew Research report found that a record 60.6 million Americans (or one in five) lived in multigenerational households in 2014, a 30 percent increase from 2007 when 46.5 million did. And this trend reflects living patterns among all racial and ethnic groups, from Asians at the top, followed by Hispanics, then Blacks and Caucasians.
But what’s under that roof—the type of home—can make all the difference in how happy each generation is.
Lennar Homes, one of the country’s largest builders based in Miami, was first out of the gate with its “NextGen Suites®” concept back in 2011 in Arizona. They represented a home within a home—more an apartment with separate bedroom, closet, bathroom, living area, kitchenette, laundry, separate entry to the outdoors and access to the main home, says Danielle Tocco, vice president, communications for the company. She cites the return of adult children after the Recession as the prime impetus. But they help other cohorts, including families with adult children with special needs who can avoid placing these offspring in a facility. Altogether the homes represent 5 percent of its total sales, which it considers very significant.
Other design professionals followed suit, building new while some began remodeling existing homes and condos to work for multigen families. Christine M. Lampert, principal architect at Lampert Dias Architects, Inc. in San Clemente, Calif., says she is designing more homes with “mother-in-law”-style spaces with full kitchens since California made these accessory dwelling units (ADU) legal in 2017 due to a lack of affordable housing. The change permits them to be as large as 1,200 square feet and either in a home or as a detached unit. “Previously, the state didn’t permit them due to parking and other issues and didn’t permit a second full kitchen,” she says. With the change, she designs such spaces to be used by all types of family members, including returning grown children. Lampert also likes to include, when possible, a good-size bathroom, closet, separate entrance, and sitting area.
Orren Pickell Building Group in Wilmette, Ill., outside Chicago, has also had an increase in clients, particularly those sixtysomething and older, ask for larger homes that can accommodate “returning” family members—either younger children or aging parents, says John Forehand, AIA, president of the company’s design group. After spending time in Morocco, Forehand realized that the country’s style of courtyard living would provide good separation for multigen living arrangements. And because of his own parents moving into his sister’s home due to his mother’s Alzheimer’s, he has seen the importance of incorporating Universal Design features at the same time to make living safer and more feasible.
A year ago, the trend got even wider coverage when Builder magazine, part of the Hanley Wood family of publications, teamed with Meritage Homes and BSB Design to construct its annual concept home at the 2018 Orlando, Fla., builder show. The design was inspired by multigenerations coming together to live and dubbed the “reNEWable Living Home.” It was conceived to represent one solution rather than a single prototype since Castenson points out that no single design works for everyone. “Prospective multigen home buyers—and owners—are not a homogeneous population looking for the same features,” she says. However, she also notes that most share a desire for certain commonalities such as a separate laundry, separate entrance to the outdoors, private bedroom and bathroom, easy access to all parts of the main home, which may mean an elevator or first-level suite, and different temperature controls for the generations’ different areas since preferences for hot and cold may vary.
Similarly, those going this route need to remember that communities, villages, towns and cities have different rules regarding what multigen designs are acceptable. Many still don’t permit a full second kitchen or second entry.
What’s more, given that trends change, this concept, too, may someday hold less appeal. The best examples therefore should be flexible if future owners want to convert them back to single- or two generation homes. For now, however, Forehand thinks well-designed examples will generate a premium.
Make a Sound Partnership from the Get-Go If you’re a builder, developer, architect or investor getting into the multigenerational niche, be sure your clients understand the ramifications of living together, from plunking down funds with someone else, even family, to sharing living space all the time! Who’s in charge of the remote for the TV? Who plans and cooks the meals? Suggest everyone old enough to have a say about finances and responsibilities join in in drafting and signing a contract that covers all the important issues. The following five points represent a good start:
- Discuss financial ramifications. Who will pay for what? Will you split the purchase as well as remodeling and decorating costs? Will you share all food? What about maintenance expenses? And how will decisions be made? Make a list in advance.
- Decide about time together—and alone. Is it important for all generations to gather for dinner or will each generation do its own thing? Again, decide in advance or at least have blackboard to leave notes—“Won’t be home for dinner tonight!” If you also have only one big-screen TV, who gets to decide what program to watch when? Run through possibilities before you end up in major or minor skirmishes. And set boundaries.
- Make rules about disciplining younger generations. If there are younger children and even teens in the house, decide if the older generation can discipline younger family members and about what.
- Write a contract to resolve conflicts. How will they be revolved—by leaving notes, having a pow-wow, maybe even having a weekly meeting to discuss important issues that surfaced that week?
- Have an exit strategy in place. Have a discussion in advance also about how the situation will be handled if one generation decides togetherness isn’t working or wants to move for a job or health reason. Will the home be sold, or will one generation have the right of first refusal—and at what price? This is not different from running a family business and best if everything is in writing.