CREJ - Multifamily Properties Quarterly - October 2015
There are countless articles and blogs written about the millennial housing crisis. Many offer interesting solutions, such as building tiny homes, subdividing existing high-rises from 500 units into 1,500 smaller units or dividing up larger homes into smaller apartments. Each of these solutions only offers part of a resolution to a larger problem that has yet to be addressed in a significant way. The larger problem is providing millennials with homes that meet their needs, as well as providing housing that matches the future vision of the millennials themselves and supports their own generational and cultural values. The result of my research and experience meeting with these amazing young people, who range from 18 to 30 years old, is this: The millennials are one of the most prolific generations to ever hit our planet. This generation is 92 million strong and they are extraordinary. They are collaborative and hardwired differently, which makes them experts in multitasking, as well as being fast, quick and extremely adept in the art of uber flexibility in mind and spirit. Baby boomers, move over, as you are now on notice. The millennials – the largest generation in U.S. history – soon will enter their peak spending years, according to a 2015 report from Goldman Sachs. This generation is rapidly becoming one of the most optimistic generations in our new economy. They initially went into debt to get a college degree with the promise of achieving their dreams. A disappointing economy emerged coupled with student debt now looming at $1.2 trillion, which is mind numbing to most of us to comprehend the impact this scenario has had on homeownership possibilities. Regardless, their unique approach to life is turning the tides of prosperity and they will achieve success. Millennials have invented things that impacted the world, like social media, and are the clear global market drivers of technology, such as smart phones, tablets, applications and other breakthroughs. They also are on the leading edge of the sustainable energy movements and have started amazing local projects. Their current struggle? Finding affordable housing in the Denver area, which supports their values of homeownership, living collaborative lifestyles, sustainability and managing financial debt previously mentioned. Some of the factors that are keeping millennials from achieving this dream are: • The millennial of today will not buy a $300,000 home (which is the average price for a home in Colorado) for two reasons: First, high debt scenarios from college; and second, for the major sector of this demographic, core values are not large homes. • On average, 33 percent of median income in Denver households is paid toward rent, according to Realty Trac. This is not sustainable. Millennials are therefore seeking out affordable alternatives. • The population of millennials in Denver has increased 58 percent between 2007 and 2013, according to a local news report. • Most of the existing inventory within the price ranges millennials can afford are not attractive, are energy inefficient, are too large and appear to be only available in undesirable or dated neighborhoods. • Collaboration is valued highly among millennials, and separate single-family developments are not desirable housing options. • Sustainability in regard to energy, a smaller carbon footprint, and supporting a unique ecosystem is a value shared by this group. There are few housing developments that are specifically designed to fit their wants, or even less, to fit their needs. In an attempt to answer their call for smaller footprints, affordable homes and desire for collaboration, we have derived a solution called Microtopia Village. This vision is to provide the millennial generation with an innovative and sustainable community to support homeownership, collaboration, entrepreneurship, and educational and global connection. Incorporating a rent-to-buy financing structure will help them attain homeownership. A joint venture was created earlier this year with Microtopia Ventures Inc. and Rocky Mountain Group, who will design and engineer the village of over 500 micro-homes. The anticipated $55 million project is envisioned along the U.S. 36 corridor between Denver and Boulder, where a new light-rail is being built. Public transportation is a major value of the millennials. The vision for the village is more than a housing development. As a new category of community design, by and for millennials, it will consist of micro-homes, ranging from 500 to 1,200 square feet, centered around a 50,000-sf community and event center called The Hub. Each of the micro-homes will use solar power and smart technology, be fiber enabled and will have an interior designed by Ikea. The inspiration behind the Hub is to provide a plethora of community events and activities, while housing permanent entities such as an entrepreneur incubator, event center, university extensions, health food store, bike shop, restaurants, hangouts and microbrews. Its purpose is to be a living community laboratory supported to expand innovation, markets and the future vision for the millennial generation. Lastly, incorporated into the design are six 20,000-sf fully operational community greenhouses growing organic foods. The growers who lease the greenhouses will market the produce to the village residents, as well as to the residents and restaurants of the city hosting the village. In addition there are sections reserved for personal gardening.