By Meghan Hall
The beginning of a new year—and a new decade—means that almost everyone has their eyes on the future. As the residential market and construction industry is revolutionized through new technologies and demographic shifts, evaluating which emerging trends will be the most important becomes paramount. For Susan Yashinksy, the vice president of innovation trends at Sphere Trending, a strategic think tank and forecasting firm, factors such as demographic shifts, the affordability crisis and changes in consumer preferences are driving innovations in co-living, pre-fabrication and design functionality that developers should keep their eyes on. Yashinsky spoke at length about these trends in a recent episode of the John Burns Podcast with host Dan Wherli, produced by John Burns Real Estate Consulting.
“I think what’s really the newest nuance in the housing industry is a lot more variety coming in,” explained Yashinsky. “We know all of the builders are frantically trying to get into rent to own, because there is a huge affordability crisis in America. And not only is there delayed life stages, but also people just can’t afford to get into a home.”
Not only has luxury product become somewhat of a norm, causing affordability issues and prompting higher percentages of the population to rent, but perceptions of renting and demographics—what it means to rent, and how it can impact lifestyle—are also having an impact. According to Yashinsky, 30 percent of Gen X will never marry, compared to 14 percent in prior generations, while those who do marry will do so later in life, delaying household formation and the desire to buy or pursue single family living. Renting, for many, provides a form of community that tenants would otherwise go without in a single-family residence.
“We are a nation of singles,” said Yashinsky. “…Now we are seeing developers—even in suburban living—reinvent [projects] to have a community feel…More and more, these developments are mixed-use. That it’s not just a home, maybe it’s a WeWork space or an office building.”
Additionally, while older generations historically believe that homeownership is smarter, younger generations believe renting is not just more preferable, but trendier and better for the modern lifestyle they want to lead.
The result, Yashinsky predicts, will be an explosion of co-living, defined as a number of individuals sharing a living space as well as a set of interests, values and interests. Not only is it cheaper, but it provides a sense of community and belonging that singles crave—a sense of closeness also found in other types of multifamily housing. Additionally Yashinksy notes that ADUs and backyard units will also become increasingly popular, serving that same sense of community at a discounted cost.
“Homes will get smaller, nobody really wants [mansions],” said Yashinksy. “They are void of character. They’re not the space we need anymore…A smaller home is what we want, but it has to live bigger.”
Yashinsky continued, emphasizing that while co-living and ADUs initially seemed like fringe trends, they will have an impact. “Trends start small. When tiny homes first came out, everybody just really thought it was a joke. It really isn’t a joke, especially in an affordability crisis.”
Smaller units also mean that developers must get creative with design in order to make units liveable and effective for today’s tenants. Smart technologies increase functionality, while community spaces with analog activities are incredibly important for residents and provide desired community.
“We’re talking more and more about culturegraphics,” which Yashinsky explains is the crossover of people’s passions into design. This can include anything from indoor/outdoor living to increased light and air to healthier living materials. Sensory enhancement through colors, aural architecture and the mixing of materials will also play a greater importance in these spaces.
Prefabrication has become increasingly popular as a result, allowing individuals more control over the designs of their units while permitting developers to pursue projects in a more budget and environmentally friendly way. Yashinsky also points out that prefabrication helps to remedy the labor shortage currently faced by developers, and that 50 to 60 percent of skilled laborers will retire in the next 15 years.
“Prefab allows for that element of personalization that we don’t really have in the built environment,” Yashinsky stated.
And, while historically older generations have closely associated smaller homes and prefabrication with money-saving tactics and large, single-family homes with wealth and status, those previous stigmas are not as much of a consideration for younger generations.
“They don’t care. They don’t care at all; they think [renting is] cool,” said Yashinsky. “…Older generations are used to thinking of that as a very low-income type of option, but remember that design is [helping with that]. Design is coming into it in a big way…There is so much going on in terms of the emotional aspect of the home and using products and building materials to not have just a physical function, but also an emotional component.”
The infusion of high-end feeling, smart, and functional design into smaller rental spaces means that for many, renting will continue to be a more affordable and desirable and increasingly livable option, one that will continue to expand into many different multifamily products into the future.