Homebuilders in the United States are tapping into the growing demand for multigenerational housing brought about by economic challenges, demographic changes and shifting consumer preferences.
For many clients, particularly those with adult children or senior-age parents, a multigenerational home might make a lot of sense.
Several leading builders are increasingly offering multigenerational home layouts, particularly in southern and western states. However, the United States has not moved fast enough to meet the demand from consumers.
To start with, the definition varies of what a multigenerational home is. The U.S. Census Bureau defines it as one with three or more generations living under one roof. Those households accounted for 6 million, or 4.7% of U.S. households, in 2020, up from 3.7% of households in 2000, the bureau reports. Meanwhile, the numbers collected by the Pew Research Center show that the share of the country’s population living in multigenerational households quadrupled to 18% over the past five decades between 1971 and 2022. At the same time, the number of people using other living situations is less than double what it was in 1971. In March 2021, about 59.7 million U.S. residents lived with multiple generations under one roof, compared with 58.4 million in 2019, according to Pew’s analysis of census data.
Yet despite this need, the National Association of Realtors noted in a July 2024 edition of its Realtor Magazine Media that the United States is not ready to meet the demand of multigenerational living. In fact, individual communities, lawmakers and builders will need to band together to create solutions. “There’s no one-size-fits-all answer to making multigenerational living work, so homeowners and builders have to come up with myriad solutions,” according to the Chicago-based association. “Flexibility in the use of space and in the kind of space that’s needed helps make solutions viable for the long term.”
To meet the changing needs of families and individuals, Lennar Corporation, one of the country’s largest home construction companies, introduced Next Gen® in 2011.
”Following the economic downturn, we saw more adult children moving back in with their parents and older adults moving in with their adult children, creating multiple generations living under one roof, “ said Alan Jones, Lennar division president for Phoenix, adding the company first targeted the Arizona market and is now in multiple states, including Alabama, California, Colorado, Florida, Indiana and Nevada. “Next Gen® offers comfortable living that can accommodate a range of lifestyles and situations, whether you’re moving in aging relatives, an adult child or looking for dedicated home office space.”
To meet increased demand for multigenerational housing, the PulteGroup’s Central Florida division is planning to offer its All-Gen housing plans in about 60% of its single-family communities in central Florida over the next 12 months.
“Historically, multi-gen plans targeted buyers with aging parents who needed additional oversight and care,” said Blake Lapinsky, vice president of sales in PulteGroup’s Central Florida division. “Today, our new plans also appeal to families with aging teenagers or adult children living at home, young professionals supplementing their expenses through rental income, and families cohabitating with extended family members.”
Neither the Atlanta-based PulteGroup or Lennar, based in Miami-Dade County in Florida, build separate structures in their multigenerational housing designs. They do offer exterior entrances to give household members independence from each other.
Toll Brothers, a luxury home builder headquartered in Fort Washington, Pa., offers multigenerational living suites in many of its single-family home communities across the country. “The rise in multigenerational living has fueled demand for this option, whether it is kids returning home after college or grandparents moving in with the family,” said Lisa McClelland, Toll Brothers senior vice president of design studios.
While multigenerational living suites are primarily designed for guests or multigenerational families living together, they can provide flexibility for bedroom space when guests visit or as a playroom, gym or game room. They can also serve as a private home office located a little further away from the main living areas. Some suites offer a separate entrance and include a separate living space complete with a bedroom, en suite bathroom, a private sitting/living area, and a kitchenette. “Many of our buyers use this option for forward planning,” McClelland said. “A playroom today could be a multigenerational living option for the future.” Buyers also use the living space to host extended visits from family living out-of-the country.
Pricing
Builders said the price of these homes depends on the community location. Pulte Group in Central Florida is currently developing two plans: a 2,400-square-foot, one-story plan and a 3,500-square-foot, two-story plan, Lapinsky said. The firm’s Central Florida division plans to keep analyzing buyer demographics and ensure its multigenerational plans meet demand.
Jones, of Lennar in Phoenix, said the cost of the company’s Next Gen homes vary by market, design and square footage. According to data released by the National Association of Home Builders last year, the median home values for multigenerational households have increased from $165,000 in 2012 to $400,000 in 2022.
Existing Homes Can’t Compete
McClelland notes that another factor behind the market’s growth is that the average age of a home being sold today is 45 years. “You typically cannot get this kind of thoughtful, designated, multigenerational living experience in an existing home,” she said.
An April 2024 report by the Urban Land Institute indicates that today’s housing stock is not fit to accommodate the changing needs of multigenerational households. Improving building accessibility through retrofits and alterations to existing homes will expand the housing stock suitable for multigenerational households by making them more accessible.
In addition, the report states, cities may need to amend their zoning policies and building codes to create a diversity of housing types that zero in on increasing the number of accessible units. The report, Making Multigenerational Communities Happen, laid out information that real estate developers, city leaders, community groups, and others can use to help meet the growing demand for housing units that effectively serve multigenerational households.
The report notes that zoning policies and building codes may prevent new multigenerational homes from being built. Today, about 75% of land zoned for housing in major U.S. cities allows only single-family homes, and many policies do not allow accessory dwelling units (ADUs). Multifamily housing faces barriers that single-family homes do not face as multiunit buildings are often subject to mandatory public hearings for approval. Single-family housing rarely faces this barrier because it is allowed by right.
Successful multigenerational homes must include flexible spaces that allow for both privacy and togetherness. “Having a well-designed multigenerational living suite ultimately helps the arrangement to be successful and makes for a harmonious living experience for everyone.,” said McClelland.
