from Paul Leonard
Research Manager
Day 2 from the ULI Spring Summit and I just stepped out of the morning session on demographics. As a member of the millennial generation, I received quite the ego boost from the opening remarks by ULI housing fellow John McIlwain. My generation now represents the largest segment of the population, replacing my parents’ boomer generation.
Our preferences and behaviors will define the next 40 years of development, a period which the panel predicts our population will increase by more than 100 million. As Professor Robert Lang explained, this explosion of growth will fuel $50 trillion in new development including housing ($22 trillion), commercial ($20 trillion), and infrastructure ($8 trillion) development leading to the creation of 69 million new jobs and 45 million new households.
The clear message here is that we are not Europe. Despite our aging boomer population, we aren’t on a path toward becoming the world’s largest retirement home. According to Lang, only India and Pakistan will outpace U.S. population growth between now and 2050…and, you heard that right, I didn’t forget about China. The U.S. is projected to increase its population at a faster rate.
So, how will my generation redefine development patterns?
Much like yesterday’s session, the panel believes that infill development is where opportunities lie. People are continually being drawn to revitalized downtowns, but also to vibrant town centers. Both offer a sense of place and reduced commuting times; however, don’t be surprised to see infill development led by close-in suburbs and not center cities.
Why? Center cities have barriers to entry that drive up costs and fragment development activity. Conversely, close-in suburbs will need to reinvent themselves out of necessity. Retiring boomers will struggle to sell their mega mansions to the much smaller and economically stunted Gen X generation. Soon enough, gray fields of low density retail and housing prevalent in the suburbs will be replaced by life style centers that better meet the needs of a new generation.
Bottom line each generation is different, but the industry must cater to the next wave.
- Paul
