Smart-growth planners justify their preoccupation with multifamily housing on the notion that, not only do Millennials prefer such housing, but as Baby Boomers become Empty Nesters, they too will prefer such housing. This is based on a logical fallacy:
- Most people in multifamily housing have no children
- When their children leave home, Baby Boomers will no longer have children
- Therefore, most Baby Boomers will prefer multifamily housing.
The reality, of course, is that even most Millennials live in suburbs, not dense inner cities–and even more aspire to eventually own their own home. So to presume that Baby Boomers will suddenly move to multifamily housing, out of possible nostalgia for their younger years, is absurd.
This is confirmed by a recent analysis of census data published by Fannie Mae. The share of Baby Boomers with children living at home declined from more than 24 percent in 2006 to 12 percent in 2012. Yet the share of Baby Boomers who live in single-family homes has fallen by just 0.3 percent from their peak, and remain today above the share before the financial crisis.
Jed Kalko, an economist at Trulia, has looked at the data in a little more detail. He notes that, not only do a high percentage of Baby Boomers still live in single-family homes, the only age class that has an even higher share in single-family housing is the 70-74-year class–i.e., the group just older than Baby Boomers. Americans don’t start moving out of their single-family homes until after age 75, and even the 85+ age class has a higher share still living in single-family homes than Millennials today. A lot of people in that age class are moving into assisted living, making them poor candidates for the transit-oriented developments that planners want to see built.
Most developers who build transit-oriented developments are probably fully aware of these trends. Those naive enough to believe planners’ unrealistic predictions will get burned once and then know better. The rest will demand subsidies to make up for the unmarketability of what the planners insist they build. Developers want to develop and builders want to build, and they don’t particularly care whether the profits they make result from the market or subsidies. But taxpayers should care, which is why they need to know that most of what smart-growth planners say about transit-oriented developments is pure fantasy.