Changing residential trends for millennials and baby boomers - by Jenny Flanagan

Jenny Flanagan, Keystone Consulting Group, Inc.

Increasingly, two of the largest demographics–millennials and baby boomers–are changing their preferences for where to live. Millennials are increasingly focusing on renting over owning, and they are favoring urban settings over suburban and rural locations. One of the factors driving this trend is the large investment this group has made in their educations, which has burdened them with significant debt before they have even entered the housing market. Homeownership, then, appears to be a far off goal. Renting in more urban settings provides them the vibrant neighborhoods and access to public transportation they desire.

Similarly, as boomers downsize they also want to be in walkable environments with easy access to stores, restaurants, public transportation, and employment. For these upcoming retirees, their focus increasingly is on village centers and built-up city neighborhoods.

Characteristics that define walkable neighborhoods include:

• Close proximity to retail uses such as restaurants, cafés, shops, and markets or convenience stores;

• Public open space such as parks and bike paths;

• Sidewalks;

• Denser development; and

• Access to public transportation.

Walkable neighborhoods contribute to a community’s quality of life. They provide better access to community services for residents without cars, including youth, seniors and people with low incomes. They also contribute to healthy lifestyles, and have the added benefit of reducing carbon emissions.

Walkability is measured by Walkscore.com, which rates locations on a scale from 0 to 100, with the most walkable neighborhoods at the top of this range. Porter Sq., Cambridge has a Walkscore of 91, making it a “walker’s paradise,” that is, daily errands do not require a car. Lowell, Mass. has a Walkscore of 84 and downtown Plymouth, Mass. has a Walkscore of 76, making these communities very walkable and most errands can be accomplished on foot. Newton Center, Mass., with a Walkscore of 44, is car-dependent, although it has a transit score of 54 with many nearby public transportation options, and a bike score of 72 with excellent bike lanes.

In areas where residents can walk to stores, services, employment and public transportation, the need for having two cars per household is reduced. Fewer cars typically means less car payments, freeing more household income for rent or a mortgage. Thus walkable neighborhoods can contribute positively to real estate values.

There is strong anecdotal evidence to support this. According to statistics provided by The Warren Group’s Town Stats, the median sales price for all dwellings in Massachusetts for January through May 2016 was $325,000, up 1.2% from the same period in 2015. The average annual increase in median price statewide since 2011 was 4.6%. By comparison, the average annual increase in the median price for all homes in the four communities noted above – Cambridge, Lowell, Plymouth and Newton – since 2011 was 5.2 to 11.3%.

Developers are increasingly focusing on walkable, transit oriented locations with welcoming downtowns. While the car culture is far from finished, investments in neighborhoods that offer walkable amenities are likely to pay off.

Jenny Flanagan is vice president of Keystone Consulting Group, Inc., North Attleboro, Mass.