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Are Subdivisions On Way Out?

Boomer Shift To Smaller Houses, Condos Will Shrink Demand For Sprawl

Tom Condon

May 08, 2011

I got an e-mail from a publicist a couple of months ago drawing my attention to a proposed development of 83 homes on 122 acres in a semi-rural part of Berlin that would be "Connecticut's first subdivision that will comply with a nationally recognized "green building" rating system."

My reaction was mixed. On the one hand, it's good that builders are trying to reduce energy consumption and environmental impact. On the other hand, green sprawl is still sprawl — it still puts more cars on the road and pollutants in the air.

The Berlin proposal continues the basic pattern of postwar residential development in Connecticut. Has nothing changed? Is there still a market for homes in suburban subdivisions?

For at least the next decade, not much of one. This from one of the country's leading experts in housing trends, Dr. Arthur C. "Chris" Nelson, professor of city and metropolitan planning at the University of Utah and head of the Metropolitan Research Center, who spoke last month at a conference for journalists at the Lincoln Institute of Land Policy in Cambridge.

Nelson's study of demographics led him to conclude a few years ago that the country has a huge oversupply of large-lot, single-family homes and not enough multifamily units. Why?

The "great senior sell-off." We Boomers began turning 65 this year, a time when people begin putting their big empty nests on the market. Eighty per cent of seniors own their homes. But when they sell, most — 59 percent — move to condos or apartments (I can't wait), to retire from mowing and shoveling or to be near services.

These were folks who raised kids in those homes. But the percentage of U.S. familes with children is dropping, from 45 percent in 1970 to 33 percent in 2020 to 27 percent by 2030. There are vastly fewer families that need big houses.

If the size of households was still dropping, so more households were being created, that might absorb some of the large-lot, single-family homes. But, after a half century of decline, household size began increasing in 2005, due in large measure to the creation of more multi-generational households and the increase of minority households, which tend to have larger families.

Also, as you may know from personal experience, it's getting tougher to get a mortgage. "The subprimes are gone, the 20 percent downpayment is back," Nelson said. He predicts that Fannie Mae and Freddie Mac will cease to exist in the next one to three years. Also, he makes the troubling observation that unless the minority education and wage gaps are closed, more families will have less income, hence less ability to buy big homes.

Homeownership is declining. It peaked at 69 percent in 2005, is down to 67 percent now and is expected to drop another 4 to 7 percent.

So where is this all going?

"Smaller homes, smaller lots and a lot more renters. The bottom line is that there will be a lot more demand for rental housing — this will be the 'Decade of Rental Housing,'" Nelson said.

The country now has about 39 million rental units; Nelson expects that to grow by 9 to 12 million units by 2020, a major leap. And where do people want to live? Nelson cites surveys showing people want walkable neighborhoods, with transit options. Nearly half want city or suburban mixed-use neighborhoods. People will trade a smaller lot for a shorter commute.

Nelson expects growth in suburban town centers. Are Connecticut zoning regulations ready for this? In Berlin, according to planner Hellyn Riggins, officials are studying the creation of an enterprise housing zone in the town center, near the railroad station. Berlin is on the Hartford-New Haven line. With the coming of commuter rail in a few years, this will be both a desirable and a green location. Perhaps that's where the builders should be building.

Tom Condon can be reached at [email protected].