Editor’s Note: This is part three in a three-part series reviewing our RESET housing study. Read part one of the series here and part two here. While it’s not entirely new, one of the more interesting and important ideas coming out of the Reset study is that single family housing needs to “evolve.” Before we dive into details, it boils down to this: Most people (by far) still want to live in a detached single-family home. But… Single family housing needs to change. Lots of people are seeking single-family housing that look’s, acts and feels different than much of what has been built in recent decades. Reaching the first conclusion was easy. We asked people to pick between several housing types, and that’s what they said. It was fairly decisive: 88% of respondents in our survey and 80% in National Association of Realtors 2011 Survey (multi-family scores strongly too, but in other ways… I’ll be writing about some of that front in my next blog). Let’s start by looking at the data. One aspect is the increasing importance of neighborhood character – and this elusive idea of sense of place – on market demand. When asked to pick which was most important, the size of the home or the neighborhood, 89 percent of our respondents picked the neighborhood (88% in the REALTOR’s study). Another question asked about the type of community people would live in if life circumstances forced them to move. Only 6% picked a suburban neighborhood with houses only, compared to 29% that wanted a neighborhood with a mix of houses, shops and businesses (this was the most popular of several choices). Asked about several qualities people factor into their housing decisions, 90% said living within an easy walk of other things / places in the community was important. Similarly, 58% said they’d trade lot size for living within walking distance of schools, stores, and restaurants. Indeed, having a large house ranked well below a slew of other options (having sidewalks and places to walk, safety and security, good public schools, proximity to parks/trails/recreation, living within a 30 minute commute). Taken together, these results describe something different than your typical residential subdivision. They call into question certain long-standing tenets – like bigger is always better – and suggest that the market is becoming more discerning. People aren’t just looking for homes – they are looking for neighborhoods; for convenience and access; for amenities that enhance quality of life. An untapped opportunity? The survey results mirrored what we heard in interviews with realtors and developers throughout the Rockies, as well as our analysis of sales trends, which in the six communities surveyed, showed an average premium of 18% on the price per square foot for housing in walkable neighborhoods. So, the demand is there… But is there product to meet it? In some cases, yes… Take Carbondale, CO, where we found that compact walkable development accounted for around 50% of the market (based on building permits) between 2000 and 2011. But Carbondale was an outlier; the average capture rate was closer to 16% across the six communities we analyzed. Realtors and developers we spoke with said that in the near term, actual demand would be higher than that – closer to 25 percent in Colorado for example – and that demographic trends were likely to push those numbers higher still in the future. So, I’ll go out on a limb and propose that in most western communities I’ve been to (quite a few), current housing stock does not reflect changing demand. That doesn’t mean walkable development will take over the market, but it is gaining traction, and in many areas supply will likely need to catch up with demand. Communities wanting to capture some of that demand should ensure their codes encourage development that is walkable, particularly infill and redevelopment, which are notoriously challenging to build under conventional zoning. Those in the private sector can learn from a growing number of successful projects, like South Main in Buena Vista; Harris Ranch in Boise; the Holliday Neighborhood in Boulder, CO; or the Town Center at Eagle Ranch in Eagle, CO, to name a few. Most importantly, the public and private sectors would do well to work together, because even with the gravity of market support, change can take time… But the time for single family to evolve is now.
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