demographic changes driving new residential development

ROBERT CHARLES LESSER & CO., LLC

Demographic Changes Driving New Residential Development

www.RCLCo.com

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• Changing Household Types

– Growth in non-traditional-family households

– Changing face of renters and owners

• Impact of Immigration

– When, where and how immigrants live

• Impact of Race/Ethnicity

• Implications for Different Housing

Types

• Relationship to Employment Patterns


Changing Household Types

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• The growth is in non-traditional-family households– Singles

– Unmarried couples or childless couples

– Roommates

– Single parents

• Non-traditional-family households

– Willing to pioneer new areas

– Less concerned about school districts

– Looking to balance price and lifestyle

• Married renters and single buyersSource: US Census, Brookings Institution

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• DC a national leader in non-married-couple households– DC - 77%, vs. 64% for 100 Largest US Cities

– DC MSA - 50%, vs. 48% National Average

– DC – 8% of households married with kid(s) – vs. 23.5% in US

– In 1990s, married households flocked to suburbs

• Lifestyle drives housing location decisions

– Look for where they can live, work & play – all in

one place

– Active communities – “3rd Places” for informal

gathering

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Changing Household Types• What does that mean?

– Product configuration changes

• Less need for 3rd or 4th bedrooms

• Creative living spaces

• More architecture, less “sameness”

– Location change

• Unconcerned with conventions and traditions

• Heretofore unacceptable locations

• Single females prefer established locations

• Couples & single men will take more risk for the $

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Household Types | Owners

2003-2008 DC PMSA Ownership Growth (HH)

39,353

30,305

2,792

10,175

28,088

3,596

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000

Married Couple

Married Couplew/Children

Male Head

Female Head

Single

Roommate

2003-2008

• Over 110,000 new owner HH will be added (~22,000/year)

• Largest % growth in Singles and Childless Couples

• Married w/ children growing slower than other groups

Source: US Census, Claritas

The Brookings Institution

1.4%

2.1%

1.6%

1.5%

1.1%

2.5%

Growth%

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Household Types | Renters

DC PMSA Renters HH in Buildings w/5+ Units

2,963

-197

1,015

2,389

14,143

834

-2,000 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000

Married Couple

Married Couplew/Children

Male Head

Female Head

Single

Roommate

2003-2008

~21,000 new renters –(~4,200/yr)

Singles drive the rental market

However…

Married Couples without children ~13% of renter growth

Female HH Heads ~11% of renter growth

Source: US Census, Claritas

0.4%

1.5%

0.7%

1.0%

-0.1%

1.2%

Growth%

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Owners

• What does that mean – for-sale?

– GenXers flooding the market – singles,

couples without children

– Designs for non-kid or young-kid households

– Married w/children growing slower than

other groups

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Renters

• What does that mean - rentals?

– Need to design for both singles and couples

– “Renters by choice” aren’t a myth (20% 50K+ incomes)

– they seek quality, mobility, and convenience – but

affordability key for many

– GenX not having children yet – some rent for a while

– Echo Boomers – tomorrow’s renter (after 2008)

• Many doubling up & living with parents

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Summary: Demographic Changes Driving New Residential Development

• Maturing Boomers:– Luxury homes/condos and some rentals

– More affluent demand top-flight amenities and services

• GenX not having children yet, but soon– Moving into ownership

• Echo Boom generation:– Tomorrow’s renter--after 2008

– Less affluent than GenX, doubling up, living with parents


Impact of Immigration

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1 Los Angeles 3,449,444 36.22 New York 3,139,647 33.73 Chicago 1,425,978 17.24 Miami 1,147,765 50.95 Houston 854,669 20.56 Orange County 849,899 29.9

7 Washington DC 832,016 16.98 Riverside-San Bernardino 612,359 18.89 San Diego 606,254 21.510 Dallas 591,169 16.8

Percent

Foreign Born

Foreign Born

Population

Source: Brookings Institution

Top Ten Immigrant Populations by Metropolitan Area, 2000


• DC region is 7th in foreign born residents, 5th in total population

• 8th in % foreign born

• Foreign born population grew almost 7 fold in last 30 years

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Foreign-Born Population Growth as a % of Total Population Growth

49%

-42%

87% 85%79%

56%

74%

16%

7%

-50%

Wash

ingto

n DC PM

SA

Distric

t of C

olumbia

Arlingto

n Coun

ty

Alexand

ria C

ity

Mont

gomery

County

Princ

e Geor

ge's Coun

ty

Fairfa

x Coun

ty

Outer S

ubur

bs

Far S

uburb

s

Perc

ent C

hange

New immigrants made up nearly half of the overall population growth in the region in the 1990s

Source: Brookings


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• Immigrants choosing to settle in the inner suburbs rather than the District– 4% of 1990s foreign-born growth in DC

• Absolute population growth in the 1990s equal in the inner and outer portions of region

– 85% of inner-jurisdiction population growth foreign-born

– 12% of outer-jurisdiction population growth foreign-born

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Outer Suburbs9%

Prince George's

13%

Montgomery 28%

Far Suburbs1%

DC9%

Arlington 6%

Alexandria 4%

Fairfax 30%

Outer Suburbs

2%

Far Suburbs0%

Fairfax 13%

M ontgomery 28%

Alexandria 4%

Arlington 9%

DC26%

Prince George's

18%

1970Total Foreign Born

127,579

Source: The Brookings Institution

2000Total Foreign Born

832,016

Impact of ImmigrationImpact of Immigration

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Fauquier

Frederick

Charles

Fairfax

Loudoun

Culpeper

Montgomery

Berkeley

Stafford

Calvert

Spotsylvania

Prince George's

Warren

Clarke

Prince William

Jefferson

DC

King George

Arlington

Alexandria

Manassas

Fairfax

Fredericksburg

I 66I 95

I 70

I 270

I 495

Route 50

I 95

Source: Brookings

Impact of ImmigrationPercent Foreign Born (By Census Tract)2000

Less than 5%

5% - 15%

16% - 25%

26% - 35%

Greater than 35%

Foreign born residents tend to concentrate near but not in the District

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Fairfax

Prince George's

Montgomery

Prince William

Loudoun

District of Columbia

Charles

Arlington

Alexandria

Fairfax

Manassas

Falls Church

Manassas Park

Manassas Park

Foreign-Born Median Household Income

Less than 50% of Median Income

50% - 100% of Median Income

101% - 150% of Median Income

Greater than 150% of Median Income


Source: Brookings

• Immigrants tend to live close to DC

• Poorer immigrants flock to DC and Prince George's County

• Affluent immigrants move to Montgomery and Fairfax Counties


Race & Ethnicity

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Race & Ethnicity

DC PMSA 1990-2000

-6,953

4,57812,243

810

46,639

264,467

126,372

191,561

-55,125

7,782

-100,000

-50,000

0

50,000

100,000

150,000

200,000

250,000

300,000

Whit

e

Blac

k/Afric

an A

merican

Asian/

Pacific

Island

er

Hisp

anic/Latino

Other

Washington DC Suburbs

• Minorities growing in the suburbs

• Mirrors national trend

• DC losing African- American residents

• Suburban builders should understand needs, desires of minorities

Source: US Census, Brookings Institution

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Race & Ethnicity

Source: US Census, Brookings Institution

• Hispanics live in north-central DC

• Concentration in NE Prince George’s, SE Montgomery, Arlington & Fairfax counties

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Race & Ethnicity

• Minorities are 32% of 1st time homebuyers (national)

• Minorities have lower incomes & wealth

• Lenders are correcting for prior patterns of discrimination

• Minorities are less mobile– 65% of minority homeowners nationwide 65

yrs of age are still in 1st home– Compared with 32% for non-Hispanic white

homeowners Source: US Census, Brookings Institution, Joint Center for Housing Studies


Relationship to Employment Patterns



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demographic changes driving new residential development

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