Are student debt and high rents the only reasons Millennials are not buying homes at the same rate as their predecessors when they were at the same point in their lives?
Randy Shaw, author of Generation Priced Out: Who Gets To Live in the New Urban America, says no. He believes the Boomer generation is a contributing factor to Millennials not buying homes. “Rather than seeing developers and speculators as villains, opposition from Boomer homeowners to building new housing units is a large part of this problem.”
Boomer property owners have successfully stymied new housing developments in their neighborhoods by assuming their Not In My Back Yard (NIMBY) approach. The results of NIMBYism are lack of supply, lack of affordability and excessive price escalation due to pent-up demand, according to Shaw.
Norris, PMP operations and client engagement manager for corporate information technology, wealth management and banking industries, combines this trend of Boomer NIMBYism with the rising number of younger retirees, Boomer empty nesters who are moving back into downsized apartments and condominiums in urban centers, the organic gentrification of neighborhoods and Millennials and Gen Xers locating to and thus competing for the same housing in the same areas.
Clearly, there is a Boomer/Millennial mismatch…a perfect storm for housing stress not seen for decades. As Boomers age, there will be a continued glut of suburban/exurban homes standing empty and unwanted. Boomers won’t find buyers for their 4 bedroom Colonial homes as Millennials want smaller homes closer to the city.
Shaw believes new building MUST happen in neighborhoods already gentrified. “High opportunity neighborhoods must serve more economically diverse residents. Cities that claim to promote inclusion cannot just relegate the non-rich to economically segregated parts of town.”
Towns such as Berkeley, Cambridge, Portland and Minneapolis are, in fact, changing zoning laws to encourage more diverse residents in “high opportunity” neighborhoods. How many more towns will follow suit and how long will it take to revamp those restrictive zoning laws are currently unanswerable questions. In the meantime, housing wealth will continue to be held by the oldest and wealthiest among us.