Page 5 - Innovative Practice Awards Program - INNOVATION SYMPOSIUM 2017 - C. T. Bauer College of Business

MILLENNIALS AND EMPTY NESTERS
Recent studies have shown that millennials, who are beginning to outnumber the Baby Boomers, have a grow-
ing preference of living near amenities, such as bars, restaurants, and entertainment venues. They are stay-
ing single longer and getting married later, which has negated the need for the large amounts of living space
typically associated with the suburbs. (Avondet, 2016) A high number of empty nesters—typically, aging Baby
Boomers—are looking to downsize. They, too, are becoming less concerned with large living spaces and are
showing a preference to living close to amenities. This change has been further spurred by the increasing cost
of traffic. In a recent survey, Houston was ranked as the 11th worst city in the nation, in terms of traffic conges-
tion.

In order to attract both millennials and empty nesters, developers should focus on either offering competitive
amenities and well-designed shared spaces, or building close to outside amenities, such as restaurants and
entertainment hubs. To address the increasing discontent with traffic, developers should select their sites in
terms of proximity to public transportation hubs, such as Park & Rides and the Metro Light Rail system. Also,
most millennials want to live close to where they work, so building complexes near areas of employment, such
as office buildings and hospitals, can set developers apart from their competition. Lastly, the world is becoming
more technologically interconnected, so a strong social online presence is key.

RENTING VERSUS OWNING
Renting has become increasingly attractive to both millennials and empty nesters and the rising cost of home
ownership has reduced the desire to own. While home values vary across the country, many would-be buyers
are being priced out of many large cities due to exceedingly high home prices. In Harris County, for example,
property values have risen over 30% in the past three years. The incomes of most individuals living in Harris
County have not been able to keep pace (Wray, 2016). Also, many Houstonians—millennials, in particular—en-
joy the freedom of not being tied down to a specific location for long periods of time.

There has also been an increasingly prevalent trend among
millennials and empty nesters to live in the city, as opposed
to the suburbs. Like most cities, Houston’s population
density is higher in and around the urban core. A large
concentration of people in a smaller area typically means a
large concentration of dining and entertainment establish-
ments. Renters who live in the urban core can take advan-
tage of the shorter commute times to the amenities they
seek, as well as the attractive public spaces that downtown
has to offer. As the Houston economy slowly recovers,
developers in the urban core are presented with the op-
portunity to build taller, more luxurious properties and
2 Vantage Med Center, Courtesy The Dinerstein Companies
command higher rents to offset the increased construction
costs. While construction may slow down in 2017 and 2018, developers can look forward to building more units
as jobs return to Houston.

WALKABILITY
People’s growing need to live close to employment and amenities—a concept called ‘Live, Work, Play’—has
compelled the city to improve its Walk Score. A Walk Score is a grading system which evaluates the walkability
of an address to nearby stores, restaurants, schools, parks, etc. In a grading scale of 100, Houston’s average
Walk Score is 48. Mariela Alfonso, a ULI contributor, estimated that a 10-point increase in Walk Score is associ-

Stanford Alexander Center for Excellence in Real Estate
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