Creating Affordable Homes for Multigenerational Living

Houses for large moderate-income families are scarce. A few innovative developers are looking to change that.
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“If you’re a family … of five or six and maybe grandma lives with you, you can’t fit into a studio or a one-bedroom unit. The right affordable choice of housing type is missing for you.”

Photo by Klaus Vedfelt/Getty Images 

Don’t look now, but today’s “traditional” American household has a decidedly different look. The 1950s Beaver Cleaver family model of a married couple, two kids, and a white picket fence has been eclipsed by varying depictions of Modern Family.

And within that mosaic is an arrangement that is quite familiar, even old-school: multiple generations living under one roof, creating super-sized families.

In recent years, there’s been an increase in the number of such households, driven by rent-burdened millennials moving in with their parents, more older Americans living with their adult children rather than alone, and growing numbers of immigrant families for whom such a living arrangement is part of cultural tradition.

However, in many parts of the country, housing options have not kept pace with demand for affordable urban housing for this size and type of household—or any other household type for that matter.

“If you’re a large family, most of the new market-rate offers don’t fit your family,” says Scott K. Choppin, founder and CEO of Urban Pacific Group in Long Beach, California. “Many of those new units are studios and one-bedroom units, predominately built to serve younger populations, primarily millennials,” he says.

Choppin said most new housing in Southern California is either straight market-rate housing, out of reach for moderate-income families, or subsidized housing, which may also exclude those large families because they earn too much money to qualify.

It’s a phenomenon called the missing middle. “If you’re a family … of five or six and maybe grandma lives with you, you can’t fit into a studio or a one-bedroom unit,” Choppin says. “The right affordable choice of housing type is missing for you.”

He is among few builders and developers concentrating on that segment of the market, looking for ways to fill the gap. In Orange County, his company over the past two years created what he calls the “urban town house.” It’s housing aimed specifically at moderate-income, multigenerational households with multiple breadwinners who together earn about $100,000 a year. The homes are mostly in working-class neighborhoods, where there hasn’t been any new housing built for years, and where many of the families he’s serving already live.

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His urban town houses are three-story rentals, typically with five bedrooms and 3.75 bathrooms. “Part of the advantage that these units have is they can serve large and multigenerational families who combine their resources,” he said. “They’re sharing income and cost burden. They act as a cohesive economic unit.”

Part of Urban Pacific’s strategy for keeping the homes affordable is the use of infill land that’s already been zoned appropriately. As a result, he said, “We can provide these units at rents that basically have them fall naturally into a moderate-income category,” Choppin says. “That’s really the innovation.”

What’s more, the company funds this kind of housing construction using private capital, not public funds. “That’s one of the unique characteristics of it—so again in the ‘missing middle.’”

While hers is not a multigenerational household, Amy Vasquez, her husband, and their two daughters, 13 and 4, benefit from living in such a community. They recently began renting a three-bedroom apartment at Wesley Village, a community for multigenerational as well as traditional families and seniors, also in Orange County.

A lot of multigenerational housing comes about by blending the needs of government and private-market financing partners.

“My husband and I work full-time but we just can’t afford a regular apartment,” Vasquez says. The rent at Wesley is a fraction of what they were paying for a one-bed in a market-rate complex elsewhere in the county.

“We have what we need for right now to get back on our feet, to save money, to eventually buy a house,” she says.

Jamboree Housing, a developer in Irvine, California, uses federal tax credits as well as state and county funding programs to build affordable housing at Wesley Village and other apartment communities in urban areas around Southern California, says Mary Jo Goelzer, the company’s vice president of marketing and communications.

That allows Jamboree to keep rents low compared to market-rate properties. She says a lot of multigenerational housing comes about by blending the needs of government and private-market financing partners. “If we’re successful it’s because we’ve got this public-private partnership going on,” Goelzer says.

Choppin and others in the industry say it’s unlikely the market will ever be able to fully satisfy the need for housing for families that are choosing to live together this way.

“The supply and demand imbalance is so high, we’ll never catch up to supplying the amount of units that are needed for these families,” Choppin says.

That’s especially the case in Southern California. “They don’t have a lot of choices from which to rent,” he says. “So they’re forced to do things they wouldn’t choose: pay 50 to 60 percent of their income to afford a house. No one would prefer that.”