Credit: Tyson Manglesdorf
Glen Hiemstra has three kids in their 20s who swear their American Dream doesn’t include owning a McMansion in the suburbs. That kind of insight is catnip to Hiemstra, who is the founder of Futurist.com, a Web site that loftily focuses on “the dissemination of information about the future and how to create it.” But he’s been in the forecasting game long enough to know that when it comes to the future, what people say and what they eventually do can be two very different things.
“If you survey the younger generation—what I like to call the ‘digital native generation’—they say they are more interested in urban areas that are environmentally sustainable and have access to high technology,” says Hiemstra. But “once this generation starts forming families, we’ll see some backing away [by] this group from saying that they don’t want to live in a suburban home.” That buyers and products over the next several decades might look a lot like they do today is a common thread connecting the prognostications of nine Nostradamuses whom Builder asked to think about the future of housing.
This look forward is an unorthodox starting point for a series Builder will publish throughout 2008 to celebrate its 30th anniversary. Instead of retracing the industry’s historical highlights over the past three decades, we decided to try to find out what a similar period in the future might offer.
During the past 30 years, builders often sought clues about future trends by peering in their rearview mirrors. Only recently have they considered the impending nexus at which design, construction, and technology might converge. Recent dismal market conditions have shattered most builders’ crystal balls or discouraged them from even gazing. But futurists see on the horizon a time and place where home and work intertwine, where sustainability is more than a catchphrase, and where builders and developers creatively address demographic and generational shifts and preferences instead of shoehorning new buyers into housing that suited the past.
“There are a number of alternative futures out there,” says Dr. Jim Dator, director of the Hawaii Research Center for Future Studies at the University of Hawaii. In one scenario, “families will become more important, [and] we’ll spend more time in houses, not moving all over. Big houses will be useful as multifamily houses. We’re already seeing this happen as [grown] children stay home,” he observes, because they’ve been priced out of the market.
A larger, diverse country
Any predictions about the future must factor in the inevitability that the U.S. will need housing for another 100 million people by 2040, according to Census Bureau projections. Robert Lang, co-director of Virginia Tech’s Metropolitan Institute, has noted that if current trends play out, three-fifths of that growth would occur in 20 “megapolitan” regions. “Imagine a contiguous span of populated land from Portland, Maine, to Richmond, Va., the joining of Carolina’s Research Triangle with Georgia’s Atlanta, the meeting of the Puget Sound and the Willamette Valley,” says Charlie Hewlett, managing director with the real estate consultancy Robert Charles Lesser & Co. (RCLCo), who responded to Builder’s inquiries with Shyam Kannan, RCLCo’s director of research and development.
Credit: Tyson Manglesdorf
As needed: As families require more living or work space, they may be able to “snap” user-ready prefab rooms onto existing houses.
Wherever this burgeoning population lands, though, home buying could still be constrained if, as several futurists predict, the U.S. economy slumps into a prolonged slowdown that economist Harry Dent thinks could last 12 to 14 years. “What the construction industry fails to understand,” explains Frank Feather, a Canada-based futurist, “is that there is a 19-year cycle which repeats itself with precision, regardless of demographics. But this time, it has been made worse by absolutely stupid lending practices, [so] the recovery will be slower.”
Population growth still distinguishes the U.S. from other industrialized nations. But it’s a double-edged sword for home building companies that will face the daunting challenge of producing homes that appeal to their mainstay customers, the baby boomers, as they age with different housing needs, while, at the same time, targeting 73 million echo boomers as they enter their prime home buying years, and an immigrant population that the Census Bureau projects will account for more than three-fifths of the country’s growth through 2050. (Although Dent cautions that this immigrant wave could ebb if jobs become scarcer.)
Sales to each group could depend on how successfully marketing can overcome buyer resistance. Futurists ask to what extent the proper application of Feng Shui principles in a new home will assuage the fears of Asians—America’s fastest-growing population segment—who, Hewlett notes, are “well educated, well off, and convinced by movies and television abroad that living in America’s urban environment is unsafe.” And to what extent will larger houses attract Hispanics—the country’s largest immigrant segment—with big families if the price of those homes remains out of reach?
Builders are already recalibrating their messages to boomers, who aren’t ready to release their stranglehold on the housing market. “The caravan of hungry boomers is not about to thin out,” writes J. Walker Smith, president of the marketing firm Yankelovich, and co-author of Generation Ageless: How Baby Boomers are Changing the Way We Live Today … And They’re Just Getting Started. That book’s authors asked boomers when a person is too old to start anything new or innovative, and the median response was 86.6 years. Dator, who is 75, is still teaching, and his generation became a model for boomers who followed to redefine their own retirement and sense of self, which pretty much translates into denying they’re getting old. “They’d rather die than move into a senior community,” says Allison Arieff, the former editor of Dwell magazine who works with the international design consulting firm Ideo and writes a column on design for The New York Times. Builders can turn aging boomers into home buyers, she says, by offering flexible floor plans and house sizes. “It’s not the best idea to grow old in a multi-story, 5,000-square-foot house. It’s much better to be in a 1,200-square-foot house on one level.” Feather also expects wheelchair access to become a standard feature in homes for active adults and foresees greater demand for homes with living space for caregivers.
Baby boomers will eventually yield to a younger generation of home buyers that, for the first time in the country’s history, is smaller than the group that preceded it. These echo boomers manifest very different attitudes than their parents about what kinds of homes they want and where they will live. RCLCo’s research finds that younger home buyers will accept and even crave compact urban environments and multifamily living. This “place over space” mentality extends to their wanting to live within diverse communities and is evident in their anticipated willingness to spend more than 30 percent of their incomes to live in the environment they covet. Most futurists agree with Dent that multifamily construction is the best position for forward-thinking builders to be in. Dent also asserts that builders and developers must do a better job convincing planners about density’s economic virtues and buyer demand.
Getting out of their cars
Where generations and demographic groups merge, say futurists, is in their growing desire to live in walkable communities. RCLCo’s data indicate “a huge pent-up demand,” with as many as 35 percent of today’s buyers preferring walkable environments.
The American Dream of owning a single-family detached home nestled in a tree-lined suburb far from the chaos of inner-city life hasn’t exactly panned out the way municipal planners once thought it would. The quality of suburban life has been eroded by longer commutes to work and shop, crime, and overcrowding, to say nothing of rising gas prices and property taxes. Fewer than half of the homeowners RCLCo has polled expect their next home purchase to be in a suburban neighborhood. Futurists have already written the obituary for that symbol of suburban excess, the McMansion, which they see as grossly inefficient and now superfluous when one considers that one- and two-person households are expected to account for 85 percent of projected household growth in the coming decades. RCLCo pegs the potential demand for high-density housing in mixed-use neighborhoods—“that allow people to get out of their cars and interact with other people,” says Hewlett—at 2.6 million units over the next decade. “Our country needs this,” says Arieff.
Credit: Tyson Manglesdorf
If you worked here, you’d be home now: More than one-third of home buyers say they want to live where they can drive less to get to work, retail shops, and entertainment. The desire for walkable communities also reflects buyers’ environmental concerns.
Hiemstra sees these dynamics as being part of a larger trend that could spark an evolution towards greater housing affordability. “The real issue is that our expectations about what constitutes adequate housing have far outstripped our ability to pay for it,” he explains. “We have moved from 1,600 square feet to 3,500 and up. We have moved to high-end finishes like marble and granite, entry halls with 20-foot ceilings, massive master baths. Financing made it all seem affordable. But those days are coming to an end. A smaller house with modest but adequate finishings may be the future. Think about the recent General Motors announcement to buy out employees and hire them back at half of their current wages; these people cannot afford McMansions.” And what’s to become of the giant homes that already exist? Some might be converted to housing that’s owned jointly by several inhabitants, which Arieff thinks could appeal to budget-conscious seniors. RCLCo adds that demand for shared-equity housing could expand to 60,000 units per year.
While a smattering of walkable communities can be found in some suburbs and cities, some futurists (especially Feather) think builders should look farther out to the exurbs, where zoning isn’t as restrictive and where the futurists anticipate an influx of buyers seeking community and cheaper housing. However, futurists are ambivalent about what this migration will produce. Watts Wacker, whose consulting firm First Matter is based in Westport, Conn., sees a growing desire among homeowners to re-establish community because “right now, the town square is an empty square.” How diverse those communities become, though, remains to be seen, especially if people choose where they live based primarily on their affinities with other residents. “Everyone is desperately searching for people like themselves,” he says.
Seeking sustainability
As usual, the bottom line will win out, and location and price will continue to determine what and where buyers buy. And none of the futurists expects builders to suddenly throw off the shackles of conformity and embrace radically different construction practices or house designs, even though they say it wouldn’t kill builders to occasionally think outside of the box (or, as Wacker suggests, dare to ask “why a box?”).
There’s broad consensus among futurists that some elements of today’s houses—living rooms, dining rooms, and even great rooms—are destined for extinction because owners’ lifestyles have less use for them. Those lifestyles require a dwelling that’s as maintenance-free as possible, too. Futurists also expect more buyers to place a higher premium on energy efficiency and sustainability, which will require a sea change for some builders. “Residential construction has been predisposed to disposability, and some homes aren’t lasting the length of their mortgages,” says Wacker. “But over the next 20 years, people are going to look for a different kind of sustainability and ask, ‘How will this home work for me over my lifetime?’ ” Wacker sees homes moving from being “inherently obsolescent” to “inherently upgradeable,” meaning, for example, that they could accept “degrees of a smart house” as owners require the technology or even entire room additions that could be snapped onto the existing structure.
Such developments would seem to lend themselves to a proliferation in modular production. Futurists would welcome that, and see builders’ attachment to stick-built construction as irrational. (Dent says the industry has yet to break out of its “caveman” phase.) But they aren’t convinced builders will venture in that direction unless buyers aggressively shove them. “Modular is always the future waiting to happen,” says Hiemstra. Feather suggests that modular might insinuate itself into mainstream construction incrementally by allowing buyers options for prebuilt modules—for example, an office instead of a dining room—with utility and fixture hookups. This kind of “plug and play” housing, as Feather calls it, could be produced to higher-quality standards and would probably require fewer building materials. “It’s time to stop banging nails into 2x4s and do something more efficient,” says Feather.
Credit: Tyson Manglesdorf
Shared space: Futurists say single-family McMansions are going the way of the dodo, and that larger homes might eventually better serve as collective dwellings for several budget-conscious families or seniors.
More builders than ever are considering ways to make their homes more efficient and greener with new construction techniques and materials. Arieff says these activities can only benefit customers. “I was practically having respiratory problems going through six different master planned communities in Phoenix,” she quips about gases emitted by new homes that buyers aren’t even aware of. RCLCo believes that over the next two decades “green and sustainable will become the new normal” for the housing industry, although buyers’ motivations for purchasing green homes will range from their desire to help save the planet to their need to reduce their utility bills. Newt Gingrich, the former Speaker of the U.S. House of Representatives and author of Real Change: From the World That Fails to the World That Works, sees green building from a market-centric perspective when he tells Builder that some home buyers would become “pro-sumers” who purchase a house that consumes and produces energy simultaneously, and subsidize the cost of that house by selling its surplus output. “That’s a green house that’s cost effective,” he says.
Moving around
In his view of the future, Gingrich assumes more people will work from home. Other futurists suggest that the line separating home and work is smudged beyond recognition and is being redrawn by new ideas about mobility that could alter the very meaning of homeownership across every economic strata of society.
Paul Saffo, a futurist specializing in technology, believes that within a generation, elite “knowledge workers” can expect their careers to require them to relocate, on a fairly regular basis, to cities and countries around the world. This globetrotting could make owning a house in any one city impractical. “Homeownership as a bedrock of economic life is beginning to disappear,” Saffo posits. Wacker, who thinks home and work are now concepts rather than locations, has spotted the same trend and foresees a day when people working within a corporate environment call several cities home and live in different company-subsidized communities whose smallish houses devote less space to kitchens and bedrooms and more space for workstations set up to accommodate teams of people.
The average worker, though, faces a future where jobs are located in markets whose home prices far exceed income levels. Wacker read recently that two-fifths of the homeless in San Jose, Calif., have full-time jobs, which got Wacker thinking about an automobile that might double as a micro-home on wheels, in which people could live near where they work during the week (using a local YMCA as their plumbing), and then drive back to their permanent residences in more affordable communities on the weekends. Dator of Hawaii University expounds on this notion of mobility when he recalls an idea from the 1960s of a backpack made from flexible, sturdy materials that could contain everything one needed to live. Technological advances make this concept, which he calls a “second skin,” more feasible today and might give some people the option to dispense with homeownership and live, instead, on campgrounds whose water, sewer, and electric they could plug into.
Sound farfetched? Sure, admits Dator. But like any self-respecting futurist, he won’t reject it out of hand. “Any useful idea for the future should sound ridiculous,” he says.
Senior editors Pat Curry and Steve Zurier contributed to this article.
We, Robot?
Market forces could drive builders to apply technology to their home designs and construction practices.
Paul Saffo doesn’t think future home buyers will demand “technology,” per se. What they’ll be looking for are “things that touch and change their lives.” Saffo, a futurist who specializes in technology, observes that every decade ushers in adaptive technology, such as the microprocessors that sparked the personal computer revolution in the 1980s. He believes that the same thing is happening now and that smart sensors could, over the next decade, lead to greater use of robotics in the home.
For a housing industry that’s on “the lagging edge” of technology, says economist Harry Dent, robotics might seem a pipedream. Smart houses haven’t caught on, says Charlie Hewlett, a managing director with real estate consultancy Robert Charles Lesser & Co., since technology keeps changing faster than builders can assimilate it into their design and construction. But some futurists insist that it’s only a matter of time before automation and technology are more commonly used to help build homes and support homeowners’ lifestyles. The only caveat, says Dent, will be affordability.
But the demand for in-home technology should rise, say futurists, as more people work out of their houses. “Communication technologies helped return us to the home,” observes Dr. Jim Dator, a futurist who teaches at the University of Hawaii. Glen Hiemstra, the founder of Futurist.com, believes the work-at-home movement will pick-up steam as a younger, tech-savvy generation turns to home buying. He also believes advances in videoconferencing should make at-home work more cost effective. “Homes will have wireless networks, always-on Web connections, and screens everywhere,” predicts Frank Feather, a Canada-based futurist. “Builders need to pack as much digital technology into their homes as possible.”
Many futurists are convinced that the housing industry will eventually come around to seeing the advantages of modular construction. If that happens on a larger scale, Hiemstra thinks robotics could be useful for assembling basic structures and installing some electricals and plumbing. Saffo sees robots doing more things for homeowners, too, over the next few decades, including driving them around. Which raises a Philip K. Dick–like question for builders: In a world of robot cars, will houses need driveways?