Why Gen Y is causing the Great Migration of the 21st Century

The Shifting Housing Market

The United States housing market is witnessing a profound shift as Generation Y, also known as Millennials, express a growing preference for compact, mixed-use housing connected to transit, moving away from the previously dominant suburban single-family homes. This demographic transformation is challenging the capacity of the market to respond to these new demands, potentially creating a long-term imbalance in the housing sector.

California's Changing Dream

In a report by the Urban Land Institute, Arthur C. Nelson highlights the significant demand for housing near public transit in California. An astonishing 71 percent of Californians aspire to live in transit-served neighborhoods, yet only a fraction currently does, projecting a potentially vast shortfall in fulfilling this demand by 2035.

The Demand for Transit-Served Neighborhoods

The report predicts a steep rise in the desire to reside within walking distance of public transit stations, known as transit-station areas (TSAs). The anticipated demand in the coming years is so great that even if California solely focused on developing these areas, the state would still fall short of meeting the needs of its population.

Overcoming the Surplus of Suburban Homes

While the tide is turning towards transit-oriented living, California faces an excess of conventional suburban single-family homes that will likely persist for a generation. This surplus creates a precarious situation for homeowners who have invested heavily in outlying suburban regions where demand is projected to wane.

Fortunately, this market trend towards denser, transit-oriented developments dovetails with California's environmental objectives, such as those outlined in Senate Bill 375. Market preferences are increasingly aligning with state policies aimed at reducing greenhouse gas emissions and promoting smarter growth.

Zoning Reform: The Pathway to New Development

For the New California Dream to become a reality, significant zoning reforms are necessary. Legal constraints currently limit the development of compact, mixed-use districts. Addressing these restrictions is vital for facilitating the sort of development that can absorb the burgeoning market demand for housing in TSAs.

What Stands in the Way of Change?

Despite the apparent simplicity of adjusting regulations to catalyze development in preferred locations, the path ahead is laden with complexities. Resistance to changing zoning laws and community apprehensions about densifying neighborhoods pose considerable challenges to achieving this transformation.