Over the Thanksgiving holiday, I came across this article in Urban Land magazine, “Housing Gen Y: The Next Challenge for Cities,” by John McIlwain. In it, McIlwain describes the current status of Generation Y — young people in their late teens to early thirties:
Today, an unprecedented number of gen-Yers are responding to this housing challenge by living with parents, with roommates, or in university dorms. Indeed, U.S. household formation has dropped to some 400,000 a year, a mere quarter of the pre-recession norm of 1.6 million. (The drop in immigration has caused some, but by no means all, of this remarkable shift.)
Why is gen-Y, now at the prime age for forming new households, staying at home, with roommates, or at school? For one, over 30 percent of this cohort, by some estimates, is unemployed. No job means no money for an apartment or home of one’s own. And while more members of this group have graduated from high school and college than those of previous generations, they are also carrying more school debt—an average of $23,000 per person. Nor is this group saving, but instead is carrying large credit-card debts.
All true. Today’s young people face unique challenges that their parents never experienced, and the job market will likely be slow to recover. I am, however, ultimately optimistic of Generation Y’s long-term prospects. McIlwain is not so optimistic, and believes long-run development planning should shift to accommodate the current and medium-run economic statuses, consumption patterns, and investment decisions of middle-class young adults.
Generation Y is the most mobile generation ever; its members can look for jobs anywhere in the country and the world by simply clicking on the internet. While the jobs come first, this generation is also looking for a good quality of life, which means to them, among other things, housing that is affordable, attractive, and located in walkable neighborhoods near jobs, services, and amenities. Gen-Yers are not looking to move to the now-cheap housing in the foreclosure-devastated exurban culs-de-sac even though that is where housing is most affordable now.
Any city or metropolitan region that cannot provide affordable, walkable, and attractive neighborhoods in which gen-Yers can afford to live will simply lose the best of them to those regions that have such neighborhoods. If they have to “drive ’til they qualify,” as the workforce before them has had to do, gen-Yers are more likely to simply fly off to another city or region.
Simply put, generation Y represents the future of every region’s economy. Attracting and keeping this group requires careful planning and a commitment to develop new mixed-income housing in mixed-use neighborhoods close to the central city and to the surrounding suburban town centers. The time to do this is now, while gen-Yers are still living at home, because when jobs for them do come back, the pent-up demand they represent will move quickly to those regions that are ready for them.
There is no indication that the long-run American residential trend toward urban peripheries and small towns is diminishing, let alone reversing. Yet McIlwain, smart-growth proponents, and urbanists all wish to shift development planning toward a more interventionist position in order to achieve their denser, transit-oriented, more “livable” cities. Now, in principle, I have no problem with greater density and choose to live in central Washington, D.C. But typical planning solutions involving more land-use regulations to achieve these ends are incredibly misguided. Low-density land-use patterns are in part a result of zoning laws that either restrict building form (e.g., height restrictions) or require a separation of land uses (e.g., residential, commercial, light-industry, heavy-industry). Abolish zoning regulations and you will likely see an increase in mixed-use development and, in many places, density.
But taking a hatchet to the government red tape that caused the “problems” in the first place is rarely an option; rather, urbanists generally call for more government regulation. This is Einstein’s definition of insanity (as tired and clichéd as that line is, so is the behavior of planners). For example, Greater Greater Washington’s David Alpert complains that property owners benefited too much from a neighborhood upzoning (liberalization) in Washington, D.C. Alpert, who was earlier this year the subject of perhaps the most obnoxious Washington CityPaper profile ever, also complains that the increased real estate prices that resulted from upzoning are incentivizing developers to build 10 floor area ratio (FAR) structures — in this case, 10-story buildings that occupy full parcels — that won’t allow for park space. In some places, you could build a 10 FAR building as 20 stories on half the lot and use the other half for gardens, a publicly accessible park, etc., but D.C. has a cap on building height. Some developers would likely be more creative with landscaping/publicly accessible space if there were fewer restrictions on development. Alpert mentions this briefly, but then turns back to his central planning instincts and concludes:
And in the future, all cities and towns should avoid making the same mistake. Libertarian-leaning urbanists like Market Urbanism have recommended fewer development restrictions and greater reliance on the free market. In many cases that makes a lot of sense, but the NoMA experience shows a need for at least some mechanism to reserve for public goods some of the value an upzoning generates. Is there a more free market way to handle this?
Huh? He identified the correct problem (land-use regulations), but then blames a result he doesn’t like on a lack of development restrictions and market forces. Stephen Smith of Market Urbanism responds to Alpert here. Unfortunately, this sort of shoddy reasoning is all too typical of those currently “planning for Generation Y.”
Photo credit: Tacoma Urbanist’s flickr photostream.