Thursday, July 23, 2009

Future Watch: the Return of Multi-Generational Housing.

It is not uncommon in Europe that young married couples, even after having some children, live at home with one or the other of their parents until they become established in their career or in the family business. Americans, however, enjoyed over two centuries of "free land" in the form of the homestead acts, development of acres and acres of cheaply built suburbs on otherwise minimally valuable land, and finally a sense of entitlement that when a person reaches their twenties, they "should" be going off into the world and not coming back.

None of these are the norm throughout history, nor will they be the norms in the future. There are no more huge "undiscovered" continents awaiting colonization by European descendants. Enough agricultural land has to be left to actually grow enough food to feed everyone - enough wildlands and nature reserves need to be left to keep oxygen in the air and water in the streams. The population of Western nations has stabilized recently, basically, but wages have been stagnant for 4 decades and have nowhere to go but down thanks to globalization. The end result of this: It will now take more adult workers to support each household than in the past.

During the 60s and 70s, this was accomplished by moving women from the unpaid household economy to the paid wage economy. But we're basically out of women (not to mention jobs), so the next generation is the only resource for income left to be tapped. It now takes the income of 3 working adults (at median US wages, $55,000 annually) to comfortably support an average US household. Soon, that will be four incomes needed for each household to pay all the upcoming taxes as well as the continually rising food prices and living expenses necessary per household.

And young people at the beginning of their earnings career have no real chance of being able to afford the price of the average US house or qualify for a mortgage. So they will have little choice but to either move back in with their parents or form co-housing partnerships with good friends.

CNN Money Online
College graduates move back home
As entry level jobs are harder to find and living independently becomes more expensive, recent graduates are moving back home in greater numbers.
By Gerri Willis, CNN personal finance editor
July 23, 2009: 2:05 PM ET

NEW YORK ( -- They've been dubbed boomerang kids and a recent poll by shows that 80% of 2009 college graduates moved back in with their parents. That's up quite a bit from recent years...

This article has some practical suggestions for dealing with multi-adult households, issues from health and car insurance to who's doing what chores. And those are good things to think about, because more and more young people, even young couples, are going to be locked out of the American "dream" of a single nuclear family in a single-family home.

And at the other end of the spectrum, things are not going to be any better. Grandma and Grandpa are not likely to get the cushy retirement benefits they were expecting when they retire - or when they are finally forced out of the job market due to disease, illness and injury. The availability of decent nursing home care will continue to be unaffordable to many and unavailable to most as the number of aging baby boomers continues to climb. These elders will most likely also end up moving in with children or grandchildren, unable to live on their own due to financial or physical constraints.

To Americans, used to the idea that they are entitled to personal "space," this is going to be a rough adjustment. "Rugged Individualism" is going to have to give way to what is best for the entire extended family.

On the upside, this will lead to a return of many aspects of the household economy of yesteryear, which will relieve some of the financial burdens. On the downside, a people that has been raised with the idea of having "rights" and little emphasis on the idea of having "responsibility" may have some unlearning to do.

In the school of hard knocks.

Related Article:

Wall Street Journal Online
Homeward Rebound: Weathering the Storm With Kin

...Families around the country are weathering out the recession by hunkering down with relatives and friends. It's not just a lower-income phenomena either. The homeward bound are former white-collar and blue-collar workers who believe they might have a better chance finding work in their hometown because they know more people, who, in turn, know still more people. But with jobs scarce, that doesn't always work, and rumors of jobs are just that. At home, though, they can at least get help with food, shelter and clothing.

"As Americans face tougher economic conditions, we'll likely see more of this," said Jim Toedtman, a vice president with AARP, which analyzed Census data. More adult children are living with their parents -- about 6.2 million in March 2008, the latest figures available -- up from 6.1 million the year before, continuing a gradual upward trend from 2000. The latest number doesn't include the most recent and most intense series of layoffs from the last three months, and is likely to be significantly higher now, says Mr. Toedtman.

The duration of home stays may also increase if the economic downturn persists. Envisioned as short-term layovers, some are turning into long-term engagements.

And many will end up being permanent.

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