ULI has long been known as a source of solid intelligence on demographic trends and their relationship to land use and development. The Institute also has a long history of supporting more compact, mixed-use development patterns that reduce the dependence on cars. I am happy to note that two recent studies from ULI—America in 2013: A ULI Survey of Views on Housing, Transportation, and Community, and Generation Y: Shopping and Entertainment in the Digital Age—find that these two aspects of our work are in sync. These analyses of the housing, transportation, and retail preferences of the emerging generation Y suggest that this group, composed of more than 75 million 18- to 34-year-olds, tends to favor more urban—and urbane—places. The implications for the real estate industry are significant as gen Y enters the housing and jobs markets in force.
The new studies explored different facets of the issue. Whereas America in 2013 looked at the housing and transportation preferences of several generations—gen Y, gen X, baby boomers, the Silent Generation, and the Greatest Generation—the findings regarding gen Y were perhaps the most significant because this generation is the most ethnically and racially diverse, and it is continuing to grow as a result of immigration.
Because of its large size and its preferences, gen Y is already changing the marketplace, and there is potential for much greater impact as this cohort ages. Fifty-nine percent of gen Yers surveyed for America in 2013 said they prefer diversity in housing choices. Sixty-two percent prefer developments offering a mix of shopping, dining, and office space, and 76 percent place high value on walkability in communities. Forty percent indicated a desire to live in a medium-sized or large city—the largest percentage of all the generational cohorts to do so.
Fifty-four percent of the gen Yers surveyed are renters; more than half place a high priority on proximity to public transit; and 23 percent said they regularly walk to destinations. The vast majority of gen Yers like city living and compact development, and would willingly trade a larger home with a long commute for a smaller home with a shorter commute.
Generation Y: Shopping and Entertainment in the Digital Age focused specifically on the shopping preferences and tendencies of this generation, whose members associate shopping with socializing and place a high value on living close to retail businesses. We learned from this report that gen Y, despite being more tech savvy than previous generations, has not forsaken shopping in stores for online purchases—as long as retailers keep their offerings new and interesting.
The study found that 37 percent of gen Yers love shopping, and another 48 percent enjoy it. Half of the men surveyed and 70 percent of the women consider shopping a form of entertainment and something to share with friends and family. More than half visit a variety of retail centers at least once a month, including discount department stores (the retail type most frequently visited by gen Y), community shopping centers, enclosed malls, department stores, big-box power centers, chain apparel stores, and neighborhood business districts. At the same time, 91 percent of respondents said that they had made online purchases over the previous six months, and 45 percent reported spending more than an hour a day looking at retail-oriented websites.
Among the activities most popular among members of gen Y is dining out: 46 percent of the survey respondents said they dine out at least once a week with friends or family; one quarter do so several times each week. Many consider themselves to be serious “foodies.” For when they do eat at home, 65 percent of gen Yers shop at least once a week for groceries. Restaurants at all price points are popular with gen Y, but, the report points out, owners should not go overboard on design that cannot quickly be adapted to accommodate new trends.
Both of these highly insightful reports offer a glimpse at the extent to which our industry and our communities are changing. While we don’t know how much the lifestyle preferences of gen Yers will shift as they age, what we do know is this: gen Yers will have an influence on the built environment that is no less powerful and just as long lasting as that of their baby boomer parents.
America in 2013 and Generation Y: Shopping and Entertainment both provide more evidence that the days of car-dependent, isolated, single-use development are waning. Those well acquainted with ULI’s program of work likely won’t be surprised by these findings. Yet I am often asked—or challenged—to make the case for ULI’s well-known support for more compact, mixed-use, pedestrian-friendly development. The new studies offer just that: a clear, empirical case that builds support for a more urban growth pattern by drawing on real market preferences that are here to stay.
Without question, the choices being made by gen Y are upending long-held notions about what is considered traditional neighborhood development. However, this game change is not about suburbs versus cities or, as some would argue, a war against driving. It’s about choice. We have entered an era in land use that will be defined by development that offers gen Yers (as well as other generations) plenty of options in where they live and shop, and how they get from one place to another.