Excerpt from Zimmerman/Volk Associates Elkhart Residential Analysis, September 2017
American households have been changing dramatically over the past several years, in ways that should enhance the effort to support the development of the Downtown Elkhart Study Area. The significant transformation of American households (particularly shrinking household size and the predominance of one- and two-person households) over the past decade, combined with steadily increasing traffic congestion and fluctuating gasoline prices, has resulted in important changes in neighborhood and housing preferences, with major shifts from predominantly single-family detached houses in lower-density suburbs to higher-density apartments, townhouses, and detached houses in urban and mixed-use neighborhoods. This fundamental transformation of American households is likely to continue for at least the next decade.
This transformation has been driven by the convergence of the preferences of the two largest
generations in the history of America: the Baby Boomers (currently estimated at 73.8 million), born between 1946 and 1964, and the estimated 88.7 million Millennials, who were born from 1977 to 1996 and, in 2010, surpassed the Boomers in population. The convergence of two generations of this size—simultaneously reaching a point when urban housing matches their lifestage—is unprecedented.
In addition to their shared preference for urban living, the Boomers and Millennials are changing housing markets in multiple ways. In contrast to the traditional family (married couples with children) that comprised the typical post-war American household, Boomers and Millennials are households of predominantly singles and couples. As a result, the 21st Century home-buying market now contains more than 63 percent one- and two-person households, and the 37 percent of homebuyers that could be categorized as family households are equally likely to be non-traditional as traditional families. A major consequence of this evolution is that urban mixed-use development, particularly in close proximity to transit, is now the preference for many more households than when families and suburban single-use preferences dominated the housing market.
Another significant shift is the Millennials’ strong propensity for renting rather than owning. This is due in part because of their relative youth—many do not have sufficient funds for a down payment and many others are burdened by student debt—and in part because the collapse of the housing market made many of them skeptical about the value of owning versus renting.
As determined by the target market analysis, and reflecting national trends, the annual potential market—represented by lifestage—for new housing units in Downtown Elkhart is characterized by general household type.
At 70 percent, younger singles and couples make up the largest share of the market for new housing in Downtown Elkhart. Additional factors in the larger share of the market held by younger households are:
- Their higher mobility rates—young people tend to move much more frequently than older people;
- Their strong preference for urban apartments, particularly lofts;
- The reduced mobility of older singles and couples because of their inability, or reluctance, to sell their existing units; and
- The fact that, outside of cities like New York, Chicago, or San Francisco, downtown dwelling units are rarely the choice of traditional families, in large part because of concerns about school quality, and the lack of private outdoor space in which their children can play unsupervised.
This younger market includes white-collar office workers—Fast-Track Professionals, The VIPs, and Cosmopolitan Elite; artists and artisans—the New Bohemians; and recent college graduates just starting their work lives—Suburban Achievers, Small-City Singles, and Surburban Strivers.
Almost 68 percent of the younger singles and couples that represent the market for new higher-density housing units in the Study Area would be moving from elsewhere in the city; just under nine percent would be moving from elsewhere in Elkhart County; another 6.4 percent from St. Joseph, Kosciusko and LaGrange Counties, Indiana, as well as Cass County, Michigan; and approximately 11 percent would be moving from elsewhere in the United States.
The next largest general market segment, at 20 percent of the annual potential market for new
higher-density units in the Study Area, is comprised of older households (empty nesters and retirees).
Most of these households have adult children who no longer live in the family home; many are
enthusiastic participants in community life and most are still actively involved in well-paying careers in the banking, legal and financial professions. These target groups range from the well-to-do Mainstream Empty Nesters, and including the middle-class Blue-Collar Retirees and Middle-American Retirees, to the most affluent Small-Town Patriarchs.
Over 64 percent of the empty nesters and retirees would be moving from elsewhere within the City of Elkhart; approximately 17 percent would be moving from another location in Elkhart County; just over four percent are currently living in St. Joseph, Kosciusko or LaGrange Counties, Indiana, or Cass County, Michigan; and the remaining 14 percent would be moving from elsewhere in the U.S.
Family-oriented households represent just nine percent of the market for new dwelling units in the Downtown Elkhart Study Area. Households with children are now increasingly diverse and in many urban areas are largely non-traditional families. Heads of these households have upper-middle management jobs, or work in the financial and legal sectors. These households include Uptown Families, Multi-Ethnic Families, Late-Nest Suburbanites, and Full-Nest Suburbanites.
Just under 74 percent of the family households are already living in the City of Elkhart, just under ten percent are currently living elsewhere in Elkhart County, 2.4 percent would be moving from St. Joseph, Kosciusko or LaGrange Counties, Indiana, or Cass County, Michigan, and the remaining 14 would be moving from elsewhere in the U.S.