By Jennifer Oxford, K&L Gates LLP
On April 28, 2015, ULI Triangle hosted a panel in the Grand Ballroom of the Capital Club in Raleigh entitled “Redefining the American Dream”. The panel focused on trends in homeownership preferences for Millennials, that generation of people ranging in ages from around 20 to 35 years old today. Moderated by Joe Martinez, Development Manager for Northwood Ravin, the panel included Jay Colvin, Regional Director for Metrostudy; Jonathan Barefoot, Vice President of Business Development with Fonville Morisey & Barefoot; Rick Bagel, Managing Partner of Wetrock Resources, LLC; Will Yadusky, Director of Land Acquisition and Development with Baker Residential; and, Robby Johnston and Craig Kerins, co-founders of the Raleigh Architecture Company. All Millennials themselves, the panelists’ discussion ranged from Millennials’ housing preferences and trends to barriers to meeting a Millennials’ needs in the market.
Broad-scale Trends Noted. Throughout the discussion, panelists noted several important trends in Millennials’ homeownership preferences. Millennials’ often seek out housing that is “close to the action” according to Jay Colvin, usually translating into preferences for in-fill urban spaces or green-fill settings with quick access to commercial and recreational uses. Panelists agreed with Colvin, noting that Millennials desire a strong sense of place and authenticity, along with functionality such as proximity to grocery stores, coffee shops or pubs.
“The kitchen is the new hearth.” At a unit level, panelists have observed Millennials’ preferences for efficiency, functionality, and authenticity. Such preferences are evidenced by Millennials’ interest not just in green-building design and materials, but also in multi-use rooms, such as a bonus room over a formal dining room, low-maintenance homes or homes with built-in maintenance through HOA’s or other mechanisms, and open design. “The kitchen is the new hearth,” noted Robby Johnston. New appliances and tile backsplashes are no longer enough. Other trends in unit amenities include “smart systems” such as thermostats and other sensors that make it possible to remotely monitor one’s house. Another emphasis is making sure that a house has no “dead spots” for cell phone connectivity.
Examples of Millennial Housing. Panelists provided a range of examples popular with Millennials, including the Raleigh Architecture Company’s small unit re-habs and in-fill developments in downtown Raleigh, to larger construction projects described by Jonathan Barefoot such as the Blount Street Commons development and Dorothea Gardens (both in-fill development in downtown Raleigh popular for their location, authentic identity and historic architecture, and low maintenance features), and Renaissance Park (a green-fill development within ten minutes of the downtown Raleigh area which includes a small commercial district). Mr. Bagel presented another unique development model in his Wetrock Farms, which is located in North Durham County and features an organic, professionally managed farm, and walkable townhomes and detached houses.
Barriers to Overcome. Panelists noted some of the barriers to development for Millennials. Many Millennials may be balancing demands of their job, their social-good interests and for some, children. This juggling act can result in a difficult decision between housing with accessible price-points, in preferred locations, and with low maintenance costs. Another barrier to developments popular with Millennials is the entitlement process, which several panelists noted can be cumbersome and time-consuming for proposed developments with unique or unusual features. Local communities were encouraged to think about ways to plan for the upcoming demands of Millennials and to identify creative methods to address their needs.
Overall, the discussion, highlighting the preferences of one of the fastest growing cohorts of the population, was both informative and eye-opening. Panelists brought their expertise, creativity, and business and personal experience to bear on the discussion, which also included a lively audience question and answer session.
Jennifer Lewis Oxford is an associate attorney in K&L Gates LLP’s Real Estate Investment, Development and Finance practice area for the Raleigh office. Jennifer uses her background in regional planning and civil engineering to assist clients in real estate acquisitions, dispositions, development, finance and leasing.