In 2014 when I was finishing up my doctoral courses and writing my comp exams, I presented to a class the concept I saw taking form that because of outrageous and indefinite real estate price increases, there would be a shift in generational demands for housing.
The trend of tiny houses was just beginning and that seemed extreme but the idea was sound. Why buy a used house at a premium when you could build new but smaller and have more consumer choice.
I called this emerging philosophy “compact customization” and if you think of Japanese urban dwellings they have been efficiently utilizing living space out of necessity for decades. In fact, the idea of buying a used house in Japan is taboo!
This will continue to be a growing trend, trading off a large home footprint for smaller, more manageable, resource efficient dwellings that include more adaptable multi-use space.
And Generation Z will likely adopt this trend from late millennials who cannot afford a traditional home which in America is a 2,273 square foot palace on a fifth of an acre lot.
I was doing research in St. Louis at the time for my dissertation, and dwelling size of several hundred units averaged 2 Bed/1Bath/1250 square feet.
Lot sizes have decreased significantly in the past 50 years, as people have desired access to local amenities like shopping, schools and parks that attract families to semi urban and sub urban parcels of development. I also mentioned the problem with community curb appeal and how the halo effect of neighborhood maintenance and upkeep can directly affect home prices.
I anticipate pre-fabrication and modularity to increase in popularity as they are traditionally less expensive methods of homebuilding due to pre-fabrication capability. Because the cost of a well, power and waste reclamation is prohibitive along with the cost to buy and develop land in hinterland areas where land is cheap but utilies service is undeveloped, young millennials and eventually generation Z will rely on smaller housing footprints with more marginal utility per construction dollar spent, at a distance from amenities that is convenient. This opens the market up to new development of communities of smaller homes with shared greenspace, where more effort is channeled into planned community sustainability and efficiency.
I expect these commercial developments will be interspersed into broader neighborhood plans and will differentiate based on their efficient (less) use of power and water and their ability to upgrade technologies like flat panel oled color changing walls instead of paint, automated just-in-time grocery delivery and storage via drone, and in-wall amenities like beds, sinks and closets that will reduce fixed footprint and make multi-use space more preferable.