According to Wikipedia data and survey reports, more than 75% of the residential areas in the US are strictly allotted for single-family houses. This situation has further aggravated the housing crunch issue in the States. This situation has led many US states to go for reform plans for housing zones.
Many states like California and Oregon, as well as cities like Minneapolis and Charlottesville, Virginia, have all signed multiple bills to try and cut down on the number of single-family housing zones. This effort is made to solve the low inventory and shortage os housing issues crushing the US market.
Single-family homes are harder for renters to afford. Apartment list research data says that more than 91% of new households are filled with renters and tenants. The data also says that more than 87% of them all stay in multi-family homes because single-family homes are simply unaffordable and too big for small-family units.
Shelter Force reports and market analysis have pointed out that these single-family houses and housing zones are a big threat to aspiring homeowners and renters. Single-family homes take up more land but provide shelter to much fewer people, making properties unaffordable for new buyers in some locations.
This has led to a steep rise in demand for multi-family homes, and many new-age home renters and buyers who can afford single-family homes are also going for multi-family units. Why? This is more of a lifestyle choice and an effort for green housing and to reduce the carbon emissions of the real estate industry. So, are single-family homes losing demand, or does the market still remain the same? What does it mean for your real estate business? Read this article to find out every detail about it.
Many American cities are zoned for single-family houses
There is absolutely nothing wrong with single-family homes, but as a matter of fact, not everyone wants or can afford to stay in these homes. NAR survey reports say that most Americans spend more than 40 - 50% of their monthly income on finding shelter alone and keeping a roof over their heads. According to New York Times reports, cities like Los Angeles and Seattle have more than 75 - 81% of houses under single-family housing zones. This makes these places quite unaffordable for the rest of the population.
According to some shocking market surveys and statistics, it turned out that more than 50% of Americans have small households and nuclear families. But, single-bedroom apartments and small apartments account for only 12.5% of the market space. This means that most of the market is taken up by single-family homes. This has led many scientists and real estate business veterans to believe that single-family homes are no longer sustainable. The number of such homes should be reduced to solve the housing issue and make things affordable for the average American.
Is banning single-family housing zones the answer?
No, as per expert reports, banning single-family housing zones is not the answer, but making the laws a little more flexible than before is vital. Reducing the number of single-family homes to accommodate the growing population is the only answer. But some form of reckoning with single-family homes is required to battle the effects of climate change, racial discrimination, and other such issues.
Boston.com news reports have also mentioned that single-family homes are the biggest reasons behind the American housing crunch. They mentioned that many experts have asked why the nation does not get rid of these housing zones and nip the problem at the root. That is why recently, Minneapolis did away with its single-family house zoning laws. This does not mean all single-family homes will be bulldozed down to rubble. Certainly not. But it certainly means a more flexible scope of growth for all kinds of houses and allows a fair opportunity for people from all walks of life to afford and rent/buy houses. Cities that are safe in U.S.A are also getting more buyers.
New Americans are demanding a lifestyle change
In the older days, most Americans viewed multi-family homes as transition homes, but things are changing now. People are making a conscious choice to buy and rent multi-family housing units. This makes their lives, buildings and houses more sustainable in the long and affordable too. Millennials are more concerned about such things and are investing more time in thinking through their housing decisions.
Things like community amenities in multi-family homes and not private pools in each single-family home are starting to make sense for Americans. This trend has also given rise to the advent of mixed-use properties where most of life's basic amenities are found within the housing complex. Things like retail shops, shopping malls, food joints, offices and houses are brought under the same housing area. This reduces the overall carbon footprint of real estate and people in general.
The American housing inventory is low
According to CNBC news reports, they state that America is running very low on its housing inventory. It is believed that America is short on as many as 5 million houses on average. More than 12.3 million new households were formed, by only 7 million single-family homes were constructed. Where does the rest of the population go? Is it time to shift drastically from single to multi-family homes? Many experts believe that it is time, and many Americans and American cities are already taking the initiative to make the shift happen.
World Finance reports have found that the housing prices in America have risen by a whopping 40% from 2000 to 2022. This has made housing quite unaffordable for most work-class people and inventory really low. Many of the factors together are initiating the shift.
Strategizing ahead of the curve
f you are a real estate business owner or manager, these trends and the change in the way housing is viewed should be important for you. No matter what type of property you have under your portfolio, these trends will greatly impact your properties in the near future. Be it single-family homes or multi-family homes, both of them are going through changes of their own. You need to plan your strategy and leadership accordingly to accommodate these changes and work around them to ensure growth.
Confused about where to get started and which trends to pay importance to? Give us a call. Talk to our team, and consult with us to know more.