Whether it’s a young adult or an aging parent moving in, more generations are coming together under one roof. But the real estate market is falling short in meeting demand for multigenerational housing, said a panel of speakers Tuesday at the Regulatory Issues Forum during NAR NXT, The REALTOR® Experience, in Anaheim, Calif.
“The one-size-fits-all [model] for housing doesn’t work,” said panelist Rodney Harrell, vice president of family, home and community at AARP. “We have a lot of neighborhoods that just offer one type of housing with one type of family in them. But the growing complexities of households requires something different. We need to have more homes that fit people’s needs and have housing stock that fit all generations.”
That means offering more housing with aging-in-place features, panelists said.
Fourteen percent of all home buyers over the past year were motivated to purchase a home to accommodate multiple generations in their family, according to the National Association of REALTORS®’ 2023 Profile of Home Buyers and Sellers. That percentage has held steady since the COVID-19 pandemic began. The most cited reasons for embracing multigenerational living include taking care of aging parents, saving on living expenses and accommodating relatives over the age of 18 who are moving back home, according to the survey.
Multigenerational housing also is seen as a potential solution to addressing inventory shortages, the growing homeownership gaps among many racial and ethnic groups and homeownership affordability woes among young adults, the panelists said.
Multigenerational households are common among the Asian community; populations like Vietnamese Americans—who have even higher homeownership rates—make up some of the highest number of multigenerational households, said Hope Atuel, CEO and executive director of the Asian American Real Estate Association of America. Those higher homeownership rates could be due to multiple generations pooling their money together to afford homeownership, she said. Purchasing a home with multiple borrowers can help homeowners afford a larger down payment and higher monthly mortgage payments, Atuel said. It also may help people afford a home in higher-priced markets.
A Different Housing Stock?
“Intergenerational housing is the wave of the future,” said Donna Butts, executive director at Generations United. “It’s not going away.”
As such, housing needs to be built to better accommodate multiple generations under one roof. For example, Atuel said, more new-home construction needs to include aging-in-place features, such as two owner’s suites on the first floor, wider hallways, fewer stairs and zero-step showers. Also, real estate pros may need to prepare to help more clients do a cost analysis of the pros and cons of retrofitting a home versus purchasing one that already has these features. Retrofitting an existing home to accommodate multiple generations will likely continue to be a growing trend, Butts said.
AARP offers a “HomeFit” checklist of age-friendly characteristics to look for in a home for multigenerational living, such as the presence of at least one step-free entrance into the home and hallways that can accommodate wheelchairs.
Atuel also noted how policy changes could help meet the need for housing to accommodate multiple generations, such as a more streamlined permitting process and greater financing options to support the construction of accessory dwelling units.
“Our housing decisions need to be more long-term,” Harrell said. “Too often, I see the worst-case scenario where after a fall or crisis of some kind, the homeowner is forced to make a choice. And usually that choice is more expensive and more limited in options.” He urged greater awareness of aging-in-place features when shopping for a home—no matter your age. “You may have a family shift at some point,” he says. “We need to help people to better understand the benefits of more intergenerational housing. For many of us, we would benefit from having more housing choice, too.”