According to a new ULI report, Demographic Strategies for Real Estate, “surban” communities—suburban neighborhoods offering the most desired features of urban and suburban living—will attract the most households in the United States over the next ten years. (In case you missed the obvious conclusion because you haven’t had your morning coffee, the Pike District is a classic example of a “surban” community.)
“Surban” developments will replace shopping centers – More retail stores will be transformed into places that sell experiences, rather than goods, and more development will combine housing and retail to satisfy consumer demand for places that offer convenient, car-free shopping. An 86-percent surge in household formations in the coming decade will drive retail activity, particularly purchases by renters, who will comprise 58 percent of the net new number of households.
Suburban office demand will return – As more people born in the 1980s move into more senior management roles and start families, many will move from urban cores to the suburbs to live in areas with good schools, but which are also near employment hubs and entertainment and recreational amenities. They will be willing to share space and work remotely.
Housing rental rates will surge over the long term – The sharing economy’s de-emphasis on ownership will be reflected in soaring demand for rental units. Well over half of the 12.5 million net new households created over the next decade will rent, including those who have never owned, and those making the switch from owning to renting as they age. Homeownership will decline, with the national rate anticipated to be 60.8 percent by 2025, the lowest point since the 1950s.
Municipalities will take a stronger role in encouraging successful growth – Local government redevelopment investments have revitalized urban and suburban areas, and the most astute suburban – or surban — municipal leaders will continue changing zoning regulations to encourage mixed-use, pedestrian-friendly development that accommodates the preferences and needs of new households.
The report groups the U.S. population by decade born, rather than by generation, to draw conclusions about behaviors shaping trends, with the most influential (and largest) groups being the following:
Innovators, born 1950–1959, who led a technology revolution;
Equalers, born 1960–1969, who achieved more equality between women and men in the workplace;
Balancers, born 1970–1979, who led a shift toward a better work/life balance;
Sharers, born 1980–1989, who led the transition to the sharing economy;
Connectors, born 1990–1999, who led 24/7 wireless connectivity; and
Globals, born 2000–2009, who effortlessly think and interact globally.
Rising numbers of female executives, affluent immigrants, younger and older workers, and retirees will have a profound influence on community building over the next ten years, according to the ULI Report.