The United States is in the midst of a diversity boom that could rival or even surpass that seen during the baby boom of the last half of the 20th century, William Frey writes in his book Diversity Explosion (Brookings Institution Press, 2014). Frey, a noted demographer and a senior fellow at the Brookings Institution, predicts that in 2050 people will look back at this period as a pivotal moment in the shift of the nation’s demographic makeup.
Significant changes are being powered by fast-growing minority populations—including Hispanics, Asians, and people of two or more races—which will double in size over the next 40 years. In addition, the white population’s very slow growth should turn into an absolute decline in about ten years. The nation also now has a definable black middle class, Frey notes.
He says his book emphasizes the need to ensure that the next generation has the opportunities it needs to move into the middle class. How Housing Matters recently spoke with Frey about his work. His comments have been edited for length and clarity.
What do planners, developers, and housing policy makers need to know about the changing U.S. demographics?
They need to look at the national growth patterns where the minority population is growing much more dramatically than the white population. I think the housing industry knows this to some degree, but if they don’t, they should realize that it represents the future of housing in the United States.
Housing will need to be made appropriate for these populations. Their particular preferences and tastes may be for multigenerational housing or particular kinds of communities. Huge amounts of attention were given to the baby boomers when it was learned that they were an important market. That same kind of focus needs to be given to these young, more diverse folks.
Could you give an example of how the housing industry might need to change?
We need to make sure people have the ability to finance homes. This includes more flexible ways of defining the assets they bring to the table, because Hispanics and blacks, who currently have much lower rates of homeownership than whites, are going to be the critical mass of new homebuyers and potential homebuyers.
All this work will take more than just the housing industry; it will require new efforts by the government and by banking regulators. And being able to buy a house will be critically important because that will be a huge part of people’s future wealth and allow them to create future wealth for their children.
You write that the debate about opportunity is moving from one of fairness to one of competitiveness in the American economy. Will this argument help create the change needed to improve housing and produce other opportunities?
I think it has to. When I was growing up in the 1950s, maybe some of my friends’ grandparents were immigrants, but there weren’t a lot of new racial minorities in the United States. Blacks were the biggest minority. They were living in very highly segregated areas, and most white, middle-class people never had contact with them.
The white, middle-class people I grew up with are now people in their 50s, 60s, and 70s who must see what’s going on around them. But when you look at polls and attitudes about issues such as government support for social services—many of which are going to young, minority families and their children—the older generation isn’t very happy, while the younger generation has said, “I don’t mind paying some extra taxes for that.”
Baby boomers are retiring every day. To fund their Social Security benefits down the road, we need more people working and paying into payroll taxes, and those people are increasingly going to be minorities. So the better the jobs they have, the better they’ll be able to create a good economy that benefits everyone.
In the journal Cityscape (2014), an article by Laura Tach of Cornell University describes micro-segregation in an otherwise diverse part of Boston, meaning that while someone might live in a diverse community, the places where they go to school, shop, and spend their leisure time are still pretty segregated. Is that a community issue that needs to be addressed in order to improve opportunities for everyone?
Demography doesn’t change people’s neighborhoods overnight, but it’s quite clear from the projections that neighborhoods will look different five to 15 years from now. The reason is that all of these young people are going to want to find new places to live.
So, yes, in the interim, we are going to have people concerned about their neighborhood changing in a way they don’t want. But the force of demography is strong. It’s happening gradually, but it’s there and it’s going to change our country in big ways. So while there may be some micro-segregation going on, many of the ways in which we are divided along racial lines will break down as the younger generations become more diverse and interracial marriages, friendships, and networking increase.
Maya Brennan, vice president of the ULI Terwilliger Center for Housing, is managing editor of the How Housing Matters website.