The New Tastes of Millenials

Millenials aren’t buying cars or new houses. Derek Thompson and the Atlantic staff have written several articles on this topic in the past couple of years. In the latest article, they recount the stats on home and car ownership for the 20-something, early 30’s age group. “The homeownership rate among adults younger than 35 fell by 12 percent, and nearly 2 million more of them—the equivalent of Houston’s population—were living with their parents…” They eventually want to own a home, but in a smaller city with a walkable downtown. Same goes for cars.

Now, why are millenials not buying homes and cars? Is it about consumer preferences — they don’t want to live in suburban sprawl — or it is because they can’t afford those items? Thompson says it’s probably a mixture of both.

I’m not entirely sure that tastes have changed that much. Yesterday, I went to two birthday parties and ended up talking a nice subset of millenials.  One woman just moved out here to the suburbs from New York City, because she wanted a backyard and good schools for her very young children. Later in the day, I talked with four other young people who were firmly commited to urban living, but they didn’t have kids yet. Tastes change when children arrive.

I think that tastes in cars have changed over the decades. I hate spending money on transportation. One of our cars is 1997 Toyota Corolla, and we’ll keep driving it until the bottom rusts out. I would much rather spend money on travel and entertainment than a car.

Thompson and the guys for Vox have written a lot about their own preferences for walkable downtowns, bike paths, denser developments, and public transportation. Truthfully, I like those sorts of living arrangements, too. If you throw in good schools, I would live in that millenial utopia, too. The trouble is that they don’t really exist in this area. Local towns actively block the new construction of apartments and townhouses. Not that there is much space for those buildings anyway. There is no support for a massive investment in new public transportation systems, which are incredibly costly.

Local politics and fiscal realities will undermine the millenial utopia. It’s too bad, because I would like to ride my bike to the supermarket.

39 thoughts on “The New Tastes of Millenials

  1. I think the questions about these trends is whether they are generational or demographic/life cycle trends. There are generational trends. Our lives are different from our parents lives in measurable ways, but, I don’t think we can tell what changes were permanent and which were related to age and economics until we’re looking back. The people who want to look forward are the ones selling, who need to know what people will buy.

    I’m with you on the car thing — for me they are nothing other than a way to get from one place to another. I’m always surprised when people identify with their cars as a personal statement.

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  2. Out here on the west coast cars are out of fashion. Rather than purchase a car, younger folk will use car-2-go or zip car when they need a vehicle. Lots of use of transit and bikes. And like I’ve mentioned before, the city is focused on increasing the density in Vancouver and the suburbs so that there is less need for vehicle ownership.

    The insane house prices has resulted in lower home ownership but I also believe that it’s tied to car ownership. If you are already questioning why you should own a car, then you’ll question the efficacy of home ownership, etc.

    I imagine that in other areas with fewer transit options and/or small towns, car ownership is higher. And it therefore would be more of a status item.

    I think that they are asking questions that many of our generation and our parent’s generation should have asked. There’s a lot we can learn from them.

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  3. I’ve also been hearing of young people relying on zip cars/uber/public transportation (and we don’t have great public transportation). Part of what works for them, though, is more control over their schedules. If you’re dropping kids all over the place, public transportation options become more problematic (at least partly because instead of everyone going to central point A, you’re driving between A-G, in any combination). So, will the young people continue the transportation choices once they have kids?

    I have seen families manage with one car, and public transportation, especially those people who dislike driving (which is sometimes correlated with having spent a fair amount of their formative years not driving, because they lived in/on college campuses, in bigger cities, outside of the US). So, maybe living this lifestyle in their 20’s will significantly influence their choices in their 30’s, 40’s.

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    1. “If you’re dropping kids all over the place, public transportation options become more problematic (at least partly because instead of everyone going to central point A, you’re driving between A-G, in any combination). ”

      Whimper. Yes.
      (off to do some more driving)

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    2. Oh, yes.

      We managed for 6 years in TX with one car as my husband generally walks to work, but now that we’ve added a minivan to the stable, we’re getting very attached to the 2 car lifestyle.

      Also, back when we lived in DC, I contemplated the logistics of living in a cheaper part of town and ferrying the kids to school by public transportation, and even just that would have been a huge time suck, not to mention a huge nuisance, particularly when dragging along a younger non-school age sibling. It would have been terrible. And that’s without considering any possible extracurriculars.

      Meanwhile, in our town in TX, it’s about a 5-minute virtually traffic-free ride to school (although the car pool complications means it takes way longer than that).

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    3. One thing about public transportation and kids is that you can have kids use public transportation well before they would be old enough to drive themselves. Or maybe you can’t. I can’t even tell if the kids on the bus are old enough to drive or not. Even the college students look 12.

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  4. Matt Ygelesias is writing on the same topic today. He says that we should increase the supply of housing to bring down costs. http://www.vox.com/xpress/2014/10/27/7077617/housing-and-ideology

    But, but, but. Localities don’t want more multi-unit housing, outside of places like Vancouver. They block proposals to build multi-unit buildings because they don’t want to share their schools and because they don’t want their property value diminished.

    There is affordable housing in places in the country where there are no jobs. Maybe the answer to move businesses/employment opportunities out to those places.

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    1. State law can over-rule local law and this has been used to reign in local zoning restrictions that are there to keep out poor people. For example, the Massachusetts Comprehensive Permit Act.

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    2. But if the market for their homes is shrinking, won’t that be what results in lower property values? In other words, if this next generation’s priority isn’t a detached family home, who will buy them?

      Is part of it the assumption that multi-unit buildings means poor people? Which is doesn’t.

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      1. Multi-unit buildings don’t mean poor people, but requiring large minimum lot sizes and single unit housing is about the only legal way to make sure poor people cannot live there.

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  5. Around here, most Millenials are underemployed in terms of pay, benefits, and hours. Big-ticket items that require good credit are completely out of the question. The Millenials who graduated from college eventually get enough scratch together to get a decent used car (not the beaters from “Joe’s Used Cars” or whatever!), but the college debt precludes any house buying. The Millenials that didn’t go to college…the lucky ones inherit a car from a dead grandparent; the not so lucky ones have a hard time getting or keeping employment because of lack of transportation. There are few places in this country with workable public transportation.

    I’m not so sure the Millenials will keep the same attitudes re: schools and what makes a good neighborhood. So many of them have been priced out of their own neighborhoods (via real estate bubbles, gentrification, or low pay/no benefit jobs). The ones that really want children will go ahead and have them, and make-do with the school district they’re in.

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  6. What’s changed is that they are doing certain things later, not that their preferences are all that different. They get married later, have kids later and therefore don’t “need” the traditional trappings of adulthood until they’re into middle-age. Their preferences don’t seem drastically different though.

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  7. Best comment on that article, with over 4700 likes: “You mean the generation that paid three times as much for college to enter a job market with triple the unemployment isn’t interested in purchasing the assets of the generation who just blew an enormous housing bubble and kept it from popping through quantitative easing and out-and-out federal support? Curious.”

    I think tastes have changed, along with reality. Millennials with school debt in the high five figures and up, working retail jobs or feeling lucky if they have anything better, are not suddenly going to turn 30, pop out kids, and start buying houses in the burbs and two cars to get around. First, too many simply won’t be able to afford it. And second, they’ve seen what a scam it is, enriching banks and corporations with minimal benefit to themselves, and won’t buy in. They’ll stay in affordable areas, like Nashville and Denver and Portland and Cleveland.The lack of public transportation won’t matter, because they live someplace walkable and have zip car. If they need a car for work or daycare drops, they’ll own it for 15 years. The school districts in those areas should expect a wave of kindergartners and their educated, active parents to hit them in about ten years.

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  8. I have seen this play out in two different communities with exactly the same outcome. Developers want to put in fancy multi-unit dwelling in the center of town near the train station. (Our area does have relatively good public transportation. Steve takes a train into Manhattan every day.) The developers want to aim these units preciely at people like Thompson and Ygelesias. So, the local people weren’t really fighting against poor people coming in. That’s not why they stuck big signs on their lawns that said, “Preserve Our Village.” Their literature kept talking about over crowding the schools and stretching resources. They are worried that it would lower the value of their homes.

    A home’s value is a delicate thing, based more on the desirability of the area rather than on square footage or shiny new appliances. If a family’s resources are tied up in a house and the perception of its value, then people are afraid to make changes.

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    1. It’s very easy to understand what people want. It’s less easy for me to see why the state legislature allows it, especially if it is coupled with local funding of schools.

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      1. Vancouver is the the most or the second most expensive city in North America and it’s happened. It is possible but you do need political leadership. It’s probably easier here because education is block funding – it doesn’t vary by county/town/’hood.

        I suppose it’s happening organically already – aren’t people in the NE moving to live in towns within a few hours of major cities? And avoiding the suburban sprawl around those towns? Aren’t these the types of people you’d want in your town? Educated young families with small children who will put down roots?

        What I’m curious about is where these people think that their children are going to live?

        I know I’m asking a zillion questions at once here but I’m curious about this issue – what do we want our towns and cities to look like, what makes them livable, etc. Personally I like living in a ‘hood where I can walk everywhere. Where you bump into others walking who are out and about. (you can imagine my Canadian accent there – “oot and aboot”. Where I’ll meet old people, young people, singletons, families, kids, etc.

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      2. I was talking about that. I don’t know about having met demand or not, but it is overturning local zoning. That appears to be a necessary, but not sufficient, step.

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    2. Cranberry is right – 40(b) has ended up being great leverage for developers. “Approve this or I’ll apply for a comprehensive permit (and bring 100 poor families to your town).” It happens over and over again in Boston’s western suburbs. Which often *does* lead to more housing, but it’s not remotely affordable.

      Exclusive towns are going to fight to stay exclusive. Judging from what’s happening here, that means small houses are being sold and torn down to build mega-mansions for hedge fund managers and trust fund families. I’m sure a few millennials will move in eventually, but not in great numbers.

      My generation (the older side of X) moved to major cities and their burbs because that’s where the jobs were. The jobs aren’t here in the same numbers anymore and it’s not affordable, so the millennials will find their utopia elsewhere.

      It kind of makes me want to move.

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  9. Well, state legislatures are elected by people who live in those communities. And state legislatures don’t exactly have the reputation as bastions of liberal ideology. In half the states, the legislatures only meet every other year, and the legislators are paid like 30K per year.

    In NJ, the state made a law that every town had to build housing for low income families or for seniors. So every town in the state now has senior housing. A good thing for seniors, I suppose, but doesn’t lead to more affordable housing.

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  10. Unless you admit (a la Kerry Healey while running for governor in MA) that seniors downsizing means they give up their homes, so more homes (and often in need of some upkeep so cheaper) for others. Of course, as Healey found out, this is political suicide as the implication of more available housing is that the primary asset of most people fails to appreciate at a level they desire. And it looks like you’re trying to force grandma and grandpa out of their homes. Managing to piss off both home owners and seniors (two of the groups with the highest level of turnout) is not a smart political strategy, so NIMBYism prevails.

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  11. What about when Mom and Dad live in a “protect our village” suburb, but the kids move back in … with their spouse and kids? If the houses turn into family compounds, is that still within code? I doubt it’s what the preservationists had in mind.

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    1. In my town, the rules are, no more than four unrelated adults. So, limitless kids, and they define how closely related you have to be. So family compounds are within code. Since we all expect our boomerang kids to move back into the basement with their unmarketable degrees, it’s a damn good thing, too!

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      1. My husband and I are currently in the process of buying a rental property within walking distance of our house, specifically so we have a place (shorter-term) for my parents if they can’t stay in their house, and (longer-term) for our kids when they finish college.

        This whole conversation reminds me of the St. Paul mansion my boyfriend live in during college. It was a huge house on a protected, historical street, had been built by a Pillsbury I think? But at some point there was no single family left who could afford to live that way. So it was chopped up into crappy rentals.

        If enough people demand smaller housing units that don’t require expensive cars, they’ll get them one way or another. Fighting against that tide seems fruitless in the end.

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      2. jen, I think it’ll be a fruitless fight as well. The towns and locales that have more density will be the winners in the end.

        Just had a flashback to the novel Station Eleven (finished reading it last week – read it!). I won’t give anything away but there are many empty huge abandoned homes.

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  12. I wonder if that will happen. Millenials are moving to this town. Houses are snapped up in a week on the market. They are highly paid millennials, not the writers for Vox or the Atlantic. Maybe they get help from parents, I’m not sure.

    You know, the high cost of housing isn’t a new issue. It was one the themes of this blog when I first started blogging. We were right in the middle of the first housing bubble and we needed to move out to the burbs for schools. We couldn’t afford a lot of houses. Ended up getting a fixer upper — not a good financial investment. Lost $$ when we moved.

    All of our money is tied up in this house and I’m not thrilled about it. It’s financially risky. It requires Steve to work a job that is boring. I would rather have a more modest investment in housing, and have more money for travel and adventure. But this house bought us into a school district where I have half the worries that I did in the past. With a special needs kid, there’s absolutely NO WAY I would live anywhere else.

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  13. Laura, I had not considered how your special needs kid is a dealbreaker. I think about my own experience in Chicago; we opted to stay in the small/walkable house while paying for a few years of parochial school. I also have several neighbors in Chicago who have chosen to home school (!) thru maybe 6th grade because they couldn’t solve the school thing but were unwilling or unable to move.

    Essentially these are cases of decoupling housing and schools … which you can do if your kids are neurotypical. So what does that mean for millennials who don’t want houses and cars? They opt out of public school? And that public school district becomes the provider of choice only for special needs kids?

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  14. Eighteen years as a one-car family has switched up a bit this fall as my partner’s work schedule requires me to rent a car three days a week in order to get to and from work in a timely manner (it’s a forty-five minute walk one way if I’m working hard at it and even public transit takes me about that long as the buses run nowhere near my house). We’re waiting to see if his job situation becomes permanent, in which case, we’ll likely get a second car.

    Eldest is going to school in the big city. There she’s only in a car when she’s taking a taxi or visiting her grandparents in suburbia. It’s barely affordable to have living space in the city: impossible to afford a car for someone starting out, so it’s not even on her radar. That said, if she returns here for grad school, it might be necessary in order to do a practicum. If so, maybe she’ll be able to claim one of ours for the year if we get a second vehicle.

    As you say, it’s less taste than necessity and life-stage for many people that has so many millennials out of the housing and auto markets!

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    1. Perhaps taste vs necessity is a bit chicken and egg. Maybe being forced into looking at other options than “house ownership + car” opened them up to the idea that it was a choice and not the ideal or only way to make a life.

      It seems to get back to the inequality of access to decent education. If there was less variation then there’d be more options of where to live.

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