If you want proof that the economy isn’t quite back to the “normal” we knew before the Great Recession, all you have to do is look at the number of young adults moving back home with their parents. At the other end of the spectrum — and perhaps on a more positive note — with people living longer, we’re also seeing a growing number of elderly parents moving in with their grown kids.
Both of those trends are powering a rising demand for builders to supply houses that meet the modern needs of that old-fashioned household style – several generations under one roof. To talk about what all of this means for builders, home buyers and family dynamics, the Knowledge at Wharton show on Wharton Business Radio on SiriusXM channel 111 recently welcomed guests James Timberlake, a partner in the architecture firm of KieranTimberlake and an associate faculty member at the University of Pennsylvania, and Joshua Coleman, a psychologist and senior fellow at the Counsel on Contemporary Families in Austin, Texas.
You can listen to the interview using the player above. An edited transcript of the conversation appears below.
Knowledge at Wharton: Give us a little bit of background about this shift toward multigenerational homes, which are really starting to pop up.
James Timberlake: Well, this phenomenon has been around for a long time. It waxes and wanes with the economy in some ways, and it’s certainly more of a regional phenomenon that we’re seeing. But the fact of the matter is that with the combination of the economy and the aging population, and with millennials and others who go off to school, but are then taking their time to move ahead in their professional lives — families disperse and then they come back together. Particularly with aging parents, greater and greater choices are being made about, do our aging parents live alone? Do they get assisted care or do they come to the house and live with the family? Which is better for them and better for the family and the kids and everybody else. So space needs to be made for that.
Knowledge at Wharton: And now, homebuilders are recognizing this change, which has been more common in certain communities — the Asian and Latino communities, for example — for quite some time. But now they’re trying to build properties, both in suburbs and in cities, that are specifically suited to these types of families.
Timberlake: Correct. I think we see it in the African-American community, as well, and I think this phenomenon has quietly happened in the suburbs for almost three decades with larger and larger houses. An extra bedroom was not a big deal when there was already a family room and a very large kitchen, and lots of room for the kids to be out and about, and for friends to be over, and for guests.
“Even if everybody is living on the same property, having a place of refuge or privacy as things heat up — as they inevitably do in family life — is actually a really good idea.” –Joshua Coleman
In urban situations, where space is more precious, decisions have to be made about the value of the lot, and what you can build, and how many units you can build in that particular area, and whether or not there’s a market for that kind of multigenerational experience. I think what you’re seeing is that developers see this niche, and it’s a niche that more and more people desire — particularly those who want to live in cities. We saw it in Chinatown 20 years ago here in Philadelphia.
Knowledge at Wharton: In terms of the structure of the family, this is an interesting dynamic that’s been gaining ground for a while, and seemingly is now being boosted — as James alluded to — by the state of the economy as much as anything else.
Joshua Coleman: It is indeed being boosted by the economy. Over the past 10 years or more, it’s become more the norm that a young adult will leave home and come back. But the other thing that’s boosting this trend, which is of interest to me as a psychologist and somebody who specializes in parent/adult child relationships, is that parents and adult children are closer than they used to be.
So part of what’s fueling this transition is that it works for both parties. Because of the ways that parents have become more invested in child well-being, and their own communication, and developing the children’s communication, and being more sensitive, psychological, emotional — all of those things, for the most part, have resulted in both parents and adult children feeling closer than they have in prior generations. So that becomes its own engine that speeds this along.
Knowledge at Wharton: Another thing we’re seeing with these multigenerational families is that the family wants to come together, but the elder member of that family still wants to have a level of freedom, of disconnection at times from the family. So some of these houses are being built with one entrance for the majority of the family, and another for the parent.
Coleman: That’s right and I actually think that’s a good idea. I think even if everybody is living on the same property, having a place of refuge or privacy as things heat up — as they inevitably do in family life — is actually a really good idea.
Timberlake: Post-Katrina in the Lower Ninth Ward, the nonprofit rebuilding group Make it Right, proposed exactly that model — a separate entrance at the front for the whole family, a separate entrance on the side or the back for the elderly family members. There was a conjoining way of not having to go outside to come back in, so that you could have the family get together. But certainly, gaining that level of separation but also the ability to bring everyone together under one roof certainly is a design challenge.
Knowledge at Wharton: What are the design challenges? Because when you’re talking about that type of dynamic within a family, realistically, you probably want to have the parent, the grandparent, on the first floor of the house. And if you are going to have that separation, aren’t you basically building a wall from the back end of the house to the front, or side to side to basically separate the bottom floor of the house?
Timberlake: Well, in tight, urban lots, there’s going to be a choice about how you make those separations, and whether or not there’s a passage door to be able to make the connection.
Where there’s landscape, where there’s more space, or even on an urban lot where you could create a conjoined arrangement, you could build an L-shaped arrangement, or an H arrangement around a courtyard — that style goes back thousands of years. It goes back to Italian and Greek homes, where those kinds of conjoined families all lived together. So there are lots of different spatial arrangements that can solve that problem.
Knowledge at Wharton: Do you see it as a trend that will continue, even with the millennial generation coming up and the baby boomers starting to head into retirement now?
Coleman: I suspect that it will. Right now, we’ve got one out of 10 people over 65. In 20 years, one in four will be, so that’s an aging population that is going to need more care. And I think there’s an increased emphasis on child wellbeing, and a kind of sensitivity that — when it works — works very, very well in promoting close relationships. So I would assume that this will continue into the future. I don’t see anything that would particularly interfere with that.
Knowledge at Wharton: I would expect that this is also something that a family needs to sit down and seriously discuss before they do it, because there are some families that this is just not going to be the right decision for.
Coleman: That’s true. There was a study that said for adult children moving back home, 25% thought it went terribly, another 25% were neutral and then the other half said that they thought it went really, really well. So you’re raising a very important point that if you’re going to do it, it’s very important to have ground rules about it, for people to talk about what their anxieties are, for there to be discussions about boundaries, etc.
Knowledge at Wharton: Pew did a research study two years ago, and at that point, 18% of the U.S. population was in a multigenerational dwelling of some kind, which wasn’t a huge jump they said from the year 2000, but it was a jump. Obviously, in that time, we’ve had the recession and we’ve had people rethink the way that they are going to choose to live.
Timberlake: I think these things go in waves, I really do. I’m a product of the 1950s and 1960s, and that was a time when families became very mobile and young people tended to move away from home for college and graduate school. And our elderly grandparents, who were just only post-World War II, were only beginning to reach those 80s, perhaps a 90-year age range, and those other health concerns came into play.
“There was a study that said for adult children moving back home, 25% thought it went terribly, another 25% were neutral and then the other half said that they thought it went really, really well.” –Joshua Coleman
So we kind of exploded apart. What we’re seeing is parents of my generation who desire closer relationships with their parents, and desire closer relationships with their children, have enabled and encouraged a re-coalescing of the family. I think we’re looking to help take care of our parents when their health declines; we’re looking to help boost our kids’ post-college, post-graduate school, so that they get the great start professionally. And part of the way to do that is to have them close by until they’re ready to make that leap.
Knowledge at Wharton: When you’re talking about having your kids in the house post-college, there are obviously some dynamics that you do have to work out. But the overall goal is to try and give them that first step, so that they can be able to do this on their own later. But obviously, the challenges that we’ve had in the last decade have changed the dynamic a little bit.
Coleman: That’s a good point. On the one hand, you have children who you have a closer relationship with. On the other hand — the meaning of adulthood has radically changed in the past 30 or 40 years. In the 1960s, you were considered an adult by the time you were 24. If you use institutional measures of adulthood such as job, good support of family, marriage, owning a house, in the 1960s, a majority of people had reached that by 24.
Now, that may be pushed way out into the 30s. So what constitutes adulthood has radically changed, and that can also be a source of tension in the household between parents having expectations based on their own ideas of what constitutes adulthood, living with millennials who may have a very different idea about that. So again, the more clarity people can have ahead of time about their expectations, the more they can avoid conflict in the future.
Knowledge at Wharton: Has the higher rate of divorce we’ve seen in the United States over the last 40 years been a factor in this change toward more multigenerational living?
Coleman: Certainly from a financial perspective, after a divorce, statistically, mothers have a harder time, so they may actually need more help. And from the adult child perspective, if it’s the adult child who gets divorced, they may need to move back in with mom or dad if they have children of their own because they need another set of hands. So certainly, from that perspective, it has.
Knowledge at Wharton: It is an interesting trend in the building sector. James, you’re a partner in an architecture firm. Having known about this and having thought about it in relation to the types of properties that you do, how do you see this growing over the next few years? As you alluded to before we went on the air, it’s much different doing this in the suburbs, compared to doing this in the cities.
Timberlake: Well, I do think this is a market-driven phenomenon, and I think we’re partially reactive to this phenomenon via the market. So if a developer or an investor desires to do this with their property, then obviously, we would design for that.
That’s where I think it’s getting driven from. I do want to touch back on one thing that Josh said that I think is really interesting. I think there are two different design challenges in the house. One is that parents living with their older parents — particularly if they are in good health or not — is a very, very different design challenge than living with their millennial children or their kids coming back from college. The privacy issues for millennials, for students coming home from college and graduate school who want to live at home and have different kinds of hours than their parents and their grandparents, are a very, very different design challenge in terms of getting access and integration to a single-roof household.
Coleman: That’s interesting. I don’t know that I have much to add to that. I could easily imagine that they are constitutionally different households, emotionally — living with aging parents who may be infirm and to whom you really need to have quick access, to be with them and be within sight, versus millennials moving back. You have to talk about things like revisiting curfews, more from the perspective of the parents’ sanity than anything else. It’s an interesting design challenge I hadn’t really considered.
Knowledge at Wharton: From a business perspective, how does the cost of making these changes to a property in the city compare to doing them in the suburbs? Is that a factor?
Timberlake: No question. Space and volume in the suburbs for an added room or bathroom onto a house, a separate entrance — making those kinds of modifications is considerably different than doing them in the city where space is tighter. You might be forced to think about an added story, a conversion of an adjacent property, those kinds of things. And they have different cost factors associated with them. Obviously, bathrooms are more expensive than bedrooms.
“You could build an L-shaped arrangement, or an H arrangement around a courtyard — that style goes back thousands of years. It goes back to Italian and Greek homes, where those kinds of conjoined families all lived together.” –James Timberlake
Knowledge at Wharton: Because there are so many families are thinking about this across the United States, it’s not like one market or another is seeing a marked rise in this type of building. We are going to see this develop; it could be here in the Philadelphia area; it could be up in New England; it could be out on the West Coast. This is something that could have legs across the United States.
Timberlake: Agreed, and I think professional institutions like the Urban Land Institute, and the American Institute of Architects are the kinds of organizations that probably need to take this on and give it some exposure, so that people who are looking for what their choices are and what kinds of opportunities there are from a design perspective will know about it. And also from the psychological circumstances, which are more Josh’s perspective, to see what the influences are on that. I think there needs to be some more data put out there, and even designs in such a way that people can begin to evaluate how that might affect them.
Knowledge at Wharton: When you have three generations of a family within one house, when you’re talking about a family that has a couple of kids, and you’re adding in the grandparent on top of that. I would think that those would be the types of situations that would present the biggest problems, or potential problems.
Coleman: Well, they certainly increase the levels of complexity. In families in general, the more numbers you have, the more opportunities you have for some faction of those numbers not to get along — the mother-in-law and the daughter-in-law, for example — so there may be more problem-solving that needs to occur. On the other hand, that has to be considered a potential positive tradeoff, because maybe grandmother or grandfather is a good mediator between the parents and the troublesome teenager, or they can provide some kind of help or support or buffer to a different difficult family member, or form a healthy alliance with a family member who needs much more support in the family system.
We never quite know when we increase the numbers in a family system under the same roof, which way it’s going to go. It’s a little bit unpredictable. There are great opportunities for growth, but there are increased opportunities for conflict, as well.
Knowledge at Wharton: I would think, though, that if you have that type of dynamic, that the age of the children could also be a factor. If you’re talking about a grandparent coming into live with a family that has younger kids, that obviously can be a very important benefit to the mother and the father, both of whom may be working. It provides an opportunity for the grandparents to spend time with the kids, it provides the parents maybe a night out if they need a break, that type of thing. So there are some very important benefits, especially if the kids are younger.
Coleman: Oh, there’s no question. And all hands on deck, particularly when you have younger children, is enormously useful. Having a grandparent who’s involved and can help, and can babysit and provide the parents with a night out is enormously useful. It’s certainly wonderful typically for the grandparent, as long as they don’t feel overused in a certain way.
So there are enormous opportunities for benefits in that sort of situation.
Knowledge at Wharton: How much of a financial benefit or hindrance is there to making these changes within a house? Strictly from a business perspective: You’re making these adjustments to your house. If you keep the house for X number of years, and the grandparent passes away and then you look to sell, does that change the dynamic in selling the house? Does it make selling it more difficult? That’s not something that people think immediately about, but having basically an apartment within a house is probably something that some couples aren’t looking for.
Timberlake: Well, no, they aren’t. And I think oftentimes we buy a house because we either fall in love with it and we want it for the rest of our lives, or we’re making an investment and we’re going to move on.
Knowledge at Wharton: First house.
Timberlake: Right. And even second and third houses sometimes, for those who adjust up along the way. I think some of it has to do with how much you love your property and are you willing to make the adaptations to do that?
The cost versus value perspective of that is partially emotional, but it’s also partially practical. You know, a great example of this happened in the Levittown houses that were built in the 1950s, all over the Northeast, post-World War II. You see a boom of small nuclear families, and all of a sudden, garages were converted to family rooms.
Then the kids went off to school; the kids came home from school. That garage family room became an extra bedroom. Then the kids would go away again, but all of a sudden, a parent aged and now they had a room in the place, but the younger generation of family was keeping the house. Many of those houses were kept for several generations, and are now turned over.
In the city, it’s much harder, because you’re talking about space available and whether or not you’re willing to give up room in your unit or on your lot for the people being added into that nuclear group, as opposed to a suburban house where, obviously, a third or fourth bedroom probably doesn’t matter much to an already pretty large house.
“Parents living with their older parents — particularly if they are in good health or not — is a very, very different design challenge than living with their millennial children or their kids coming back from college.” –James Timberlake
Knowledge at Wharton: That is interesting. I’ve seen this in my neighborhood, that people have converted smaller garages into family rooms — and just because it will add value to the house.
Timberlake: Absolutely. You put the car outside, and it stays out all day long.
Knowledge at Wharton: Put all the tools in the shed, in the back of the yard.
Timberlake: Exactly. They were never used anyway.
Knowledge at Wharton: That’s true, that’s exactly right. Josh, we’re seeing people who are in their 40s, maybe 50s, having their parents move in with them. The millennial generation is going to have to take this under consideration as they get a little bit older. Don’t you think seeing it firsthand will have to be a benefit, as it becomes something that they have think about in their 40s and 50s?
Coleman: I hope that that’s true. As a family therapist, I also see the downside of our high investment in our children that’s occurred over the past half century, and in particular, in the past few decades. And one of the downsides to it is that I don’t know that we’re teaching quite what we should be. We’re certainly focusing on our children’s wellbeing and their own voices and their own personal development, and prioritizing their own social capital and the like.
I don’t know that we’re doing as good of a job as teaching them duty, respect for one’s elders and those kinds of things. So I am a little concerned that if there is a falloff in this trend, that it may come as a result of that.