January 3, 2018

The Daily Durning: Millennials and the "Missing Middle" in Housing Form

understanding-millenials
Tom Durning of the Daily Durning sends this article from the Washington Post which quotes our very own City of Vancouver Planner, Gil Kelley.  The article is about the millennial age group, the eldest now in their mid thirties. This population cohort stayed in cities, lived in apartments, eschewed vehicle ownership in favour of walking, cycling, car share and transit, and led the way to how we look at cities today, as urban fabrics of connectivity based upon walkable proximity to work, shops and services. It is no surprise that city planners and thinkers want to keep this population of people in cities instead of suburbs as they begin having families and buying houses.
As many are now priced out of buying single family housing in cities, the “missing middle” form of density is coming back into vogue.  ” Urban planners, developers and architects are reviving the kinds of homes that might be more familiar to millennials’ great-grandparents: duplexes, triplexes, bungalows, rowhouses with multiple units, and small buildings with four to six apartments or condos. It’s the kind of housing that fell out of fashion after World War II, when young families and others fled cities for the houses, driveways and ample yards of the burgeoning suburbs… It hits the middle in scale — larger than a typical detached single-family home but smaller than a mid- or high-rise — and typically serves people with middle-class incomes.”
The City of Vancouver is now looking at new housing forms in duplexes and townhouses, which will provide more of the ‘missing middle” of housing density. “I think it’s very significant that we’re understanding people want to live in the core of urban areas again,” Kelley said. “We’re reversing a 60- to 70-year trend of people moving out to suburbs . . . This is not just a fad for a decade. This is a multi-decade shift.”
There is evidence that millennials do not want to “drive until you qualify” for home ownership, and in the United States this population outnumbers the baby boom generation in population. In the words of Gil Kelley ““It’s a huge wave. They’re demanding a place in the cities and housing that’s affordable to them.”
This ten minute video with University of British Columbia’s  Patrick Condon and Scot Hein filmed in early 2017 discusses the “missing middle” housing form, and how it would fit into the Vancouver context.

 
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  2. A $2M townhouse (TH) with 3 bedrooms (BR) built on a 33 x 120 $3M lot is now the “missing middle” solution for GenY folks ?
    For those that can’t afford it there is the $1M 3BR TH in Surrey or Coquitlam, the $1.5M 3 BR TH in E-Van built on a $1.6M 50 x 120 lot or the 800 sq ft $1M shoebox in the sky. Or a used older condo. Or less BRs. That is the new Vancouver, destroyed by pandering for far too long to too many under-taxed immigrants that happened to concentrate in MetroVan or GTA due to very lax tax rules. Happy New Year !
    A quick search here ( https://www.realtor.ca/Residential/Map.aspx#CultureId=1&ApplicationId=1&RecordsPerPage=9&MaximumResults=9&PropertySearchTypeId=1&PriceMax=800000&TransactionTypeId=2&StoreyRange=0-0&BedRange=2-0&BathRange=0-0&LongitudeMin=-123.11099052429165&LongitudeMax=-122.93606758117642&LatitudeMin=49.29109779978075&LatitudeMax=49.37522008143603&SortOrder=A&SortBy=1&viewState=m&Longitude=-123.023529052734&Latitude=49.3331769107341&CurrentPage=1&ZoomLevel=13&PropertyTypeGroupID=1 ) shows 34 2BR condos for under $800,000 in N-Van or only 10 under $600,000
    The affordability train has left the station in Vancouver. It still exists further out. Or in tiny tiny shoeboxes.

  3. I thought the Boomers were the biggest bulge, but now Boomer’s kids have become the biggest bulge below the bulge.
    https://www.indexmundi.com/graphs/population-pyramids/united-states-population-pyramid-2016.gif
    On affordability, I don’t quite agree with Thomas’s take that the train has left the station in terms of land economics and zoning. Foreign ownership, speculation and interest rates will all be affected in one way or another in the next couple of years. Still, prices will probably remain high but stabilized somewhat below today’s levels, especially with the abundance of 33, 50 and 60-foot lots in every city in the Metro.
    With literally square kilometres of developable land coming on stream by opening up detached house and large lot zones in Vancouver, the supply won’t be as constrained as it is now. If policymakers can stabilize prices through new supply, taxing foreign wealth and countering speculation, then people can take a breath to plan. The thing to watch though will be the interest rates. A big jump will bring down demand very quickly, and may cause a lot of defaulting on overstretched debt.
    The missing middle is a big answer for housing more people on less land, but it must also allow family incomes to rise with a standard plethora of rental suites. That can only benefit buyers and renters alike. And that Boomer bulge above Millennials? That represents the largest transfer of wealth to a younger generation in our history. Boomers are already helping their kids with down payments and laneway housing.

    1. Land prices will not come down. Of course it is better to have 3 THs at $2M on a lot than one old house for $3-4M .. thus “the average” will come down .. so we will indeed get more housing but it will not be cheap.

  4. The idea that they all want to be in cities doesn’t seem to be born out everywhere:
    “After years of excited talk about the comeback of America’s cities, evidence has been piling up in recent months that the suburbs are doing much better, with even those quirky-but-ubiquitous millennials now moving there in large numbers and buying SUVs. Bloomberg View columnists Justin Fox, Conor Sen and Noah Smith gathered online to discuss what’s going on…”
    https://www.bloomberg.com/view/articles/2017-08-25/millennials-are-driving-the-suburban-resurgence
    Any new duplex or townhouse is going to be way out of reach of most millennials in Vancouver, Richmond, Burnaby or North Vancouver.

    1. Those new AVs will come in handy, as they can drive you while you sleep (or blog here on pricetags) from Chiliwack or Hope or Pemberton even. Traffic will increase and prices further out will continue to rise, too !

      1. Why stop there? Why not just climb in a car at the end of the work day and have it drive you to Williams Lake and back – just on time for another day. You can go to drive thrus for meals, watch TV and sleep. Not much different than the typical suburban lifestyle but no need to pay for an expensive house.
        Thomas, if there’s any truth to what you predict it’s all the more reason to reduce road space and foster denser mixed-use neighbourhoods throughout the region. There will always be people who do absurd things and if you make it easy for them even more of them will. Just look at the hoards who sit in traffic jams everyday.
        It is absurd that so many think the answer is wider traffic jams. Absurd but not surprising. So few have been given the opportunity to live in functional neighbourhoods and cities. You always claim that people want the misery of the suburbs. But really, most haven’t been allowed to know that other choices exist. Most do what they grew up with and are reinforced by the stories they echo.

        1. No one is forced to buy in Squamish, Gibson or Abbotsford today to commute in .. or Pemberton or Hope tomorrow .. yet many do/will.
          Please allow people their choice of arranging their affairs. Not everyone wants to live in a big city in a mid- or high-rise. Some do, some don’t.
          We shall see what road pricing schemes we’ll get in MetroVan to dampen the haste of a house in Pemberton for a daily commute. But many jobs exists now where perhaps a trip once to 3 times a week suffices. I am merely saying that we cannot expect an increase of 1M people in MetroVan to be all in dense centers .. the region will spread and as such, transportation systems – be they roads, ships, trains, buses or bikelanes – ought to grow with it ! Immigration has costs and benefits. We ought to look at both.

        2. What percentage of people grew up in missing middle neighbourhoods in this region? People are certainly allowed to choose how and where to live. But they haven’t been given an entire range of options so most have been forced to live in single use single family suburban style neighbourhoods or the polar opposite – mixed use but very dense and mostly downtown.
          People usually gravitate to what they know so better neighbourhoods become a catch 22 of no demand no supply.
          There is so much room within this region’s developed footprint there is not a single good reason to sprawl further. It would take a century or two of infill before single family houses became rare. And lets not second guess what people would prefer by then.

    2. Re: Bloomberg piece on Millennials moving to the burbs.
      What’s true in Atlanta doesn’t necessarily translate 1:1 everywhere in Canada. The US has been at the top of all industrialized nations in VKT, even with worldwide declines, and has the biggest suburban build-out. All that suburban fabric won’t disappear tomorrow.
      The suburbs are more susceptible to the laws of physics (i.e. per capita energy consumption and emissions) than anywhere else. Per capita transportation costs are also far higher. The knowledge economy may allow Alvin Tofler’s Electronic Cottage to finally take off and displace commuting to a point, but you still also have to build, deliver, maintain and replace public services and private goods and social enterprises.
      Having residents work from a faraway home will not preclude commuting and meeting regularly, shopping, running errands and whatnot by car. Nor will EVs / AEVs alter the fact that the suburbs are one of the most inefficient constructs and users of public services ever invented.
      Urbanizing the suburbs with rail and better town planning will make the most of both worlds while reducing car dependency, increasing human health and offering a wider choice in housing and local jobs.

  5. If only the City of Vancouver weren’t the number one provider of new single family homes in the region – such a waste of serviced, transit dense inner core land.

      1. That is the point – the massive missed opportunity – they are demolition of SF and replacement with SF, right in the core of the region, in walkable neighbourhoods with exceptional transit service, locking in another generation of SF use and pre-empting the densification of the core.

  6. The ‘burbs might beat Vancouver to the punch as many “missing middle” density and housing types are being built in town centre developments in the valley – exurbs seem less allergic to townhouses and garden flat style ground-oriented development. Many arterials in Vancouver could make the transition – (Nanaimo, Renfrew, Rupert north of Broadway say?, First Ave?)

    1. The lack of allergic reaction in exurbs probably has more to do with these being built on greenfields rather than inserting themselves into existing neighbourhoods. Better than sprawly sprawl (if it’s a mixed use community) but kind of defeats much of the advantage.
      I do see great hope for the urbanization of our town centres just about exactly a generation after they were proposed. It’s really hard to wake up the current generation of decision-makers and (dare I say) consumers. To the next it becomes a no-brainer.
      But I continue to protest the idea that density should occur on busy roads. Why force the most people into the least desirable environments? Missing middle should mostly occur near but not on commercial arterials and avoid proximity to residential arterials unless there’s a plan to add amenities as part of the package.

      1. Might be time for a trip to the exurbs! As an example, Surrey is the #1 provider of the “missing middle” in the region and it is not all in greenfield. Much of it is in existing mid century neighbourhoods. Check out Street View at 103 Ave & 142 St for the kind of infill taking place all over the region, in this case within 200m of the future LRT corridor.

        1. That’s good news. For me the term “exurbs” wouldn’t include the north west quadrant of Surrey. If it’s within an area where rail transit is proposed that’s just suburbs and it’s great to see them adding density. As Alex mentions below, I hope it’s walkable to daily amenities. Density without walkability (even with rail transit nearby) is just a recipe for even more traffic and degradation.

        2. That is Surrey will surpass Vancouver in population size soon. More affordable for the middle class.
          Well run by the former Mayor (Dianne Watts), who might yet emerge as the Liberal party leader and eventual BC Premier.

  7. It’s important to note that any discussion on housing types represented by the Missing Middle would be incomplete without mixed use zoning. The key to allowing more homes on a given amount of expensive land, knowing that the home will be more expensive than suburban homes, is to build them very close to a plethora of shops, transit, services and jobs, and to stick to the principle of building more walkable neighbourhoods. The convenience of close proximity to the necessities of life (dance clubs excepted) has a high value hardly never discussed in the same exchange of opinions about housing prices.

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