- The Washington Times - Thursday, July 8, 2010

Plenty of baby boomers can claim membership in the “sandwich generation,” caring for elderly parents and young children at the same time. While those responsibilities can be daunting, recent reports reveal that, whether by necessity or choice, many of these baby boomers are combining those three generations into one household.

American household size had slowly been shrinking, year by year, as families had fewer children and more people opted to live alone. Census Bureau estimates had predicted that the average household size would continue to fall to 2.53 members in 2010, but instead, the average household size is anticipated to rise to 2.63. Though adding a fraction to the average household size may not seem important, economists and demographic researchers say the simple fact that households are growing could have a major impact on the housing market, among other areas of the economy and culture.

A recent Pew Research Center report provides evidence that multigenerational households are becoming more common: 49 million Americans (16 percent of the population) lived in a household with at least two adult generations in 2008. Twenty years earlier, in 1980, there were 28 million people (12 percent of the population) living in multigenerational households.

“Designing homes that meet the needs of multigenerational households appears to be an emerging niche for home builders and remodelers,” says Stephen Melman, director of economic services at the National Association of Home Builders (NAHB).

Mr. Melman points to several reasons for the rise in generations living together.

“The economy has encouraged recent college graduates and other young people to return home to live with their parents rather than establish their own households,” Mr. Melman says. “There may be some element, too, of relatives moving in with each other because they have lost a home due to foreclosure.”

Seniors and their adult children are creating households together, too, either with the parents moving in with their adult offspring or the adults moving in with their parents. The Pew Research Center says about 20 percent of people age 65 and older live in multigenerational households.

“Multigenerational housing is also part of a cultural trend, since people in certain ethnic groups often live with several generations of an extended family,” Mr. Melman says.

He says, though, that it is difficult to predict whether the growth of multigenerational households is a temporary trend linked to the recession. Some economists anticipate that when the economy improves, there will be an increased demand for rental housing, followed by demand for affordable condominiums, town homes and single-family homes as new households are formed.

In the Washington area, some remodelers report a small increase in the requests they are receiving to create additional living space for parents of the homeowners.

Bill Abbott, a Realtor with Long & Foster Real Estate in the District, says he has worked with buyers looking for homes to accommodate more than one generation or even to accommodate their own future needs for one-level living.

“I’ve had more and more people planning ahead, making sure they have a first-floor master suite or a finished lower level that works as an in-law suite,” Mr. Abbott says. “Some buyers, especially if they are looking downtown at homes that are not that large, will consider looking for an apartment nearby for their parents or in-laws.”

Whether they are homeowners interested in remodeling or potential homebuyers, the key to a successful multigenerational household includes creating space and privacy for additional adults that can be adapted to other uses for resale value.

“The ideal is to be able to have all the functions of the house as they were before adding an elderly parent or in-law to the household, and to be able to expand the living space of the home in an attractive way so that it doesn’t look as if it is taped onto the side of the house,” says Jerry Levine, president of the Levine Group Architects + Builders in Silver Spring, Md., and of the National Association of the Remodeling Industry. “Generally we seem to be seeing more requests for either an addition to a home or a lower-level remodeling project to accommodate three generations living in one home.”

At the NAHB International Builders Show in 2010, the New American Home Showcase home was a one-level residence with a master suite at each end.

“The grandparents’ suite included universal design elements along with a small kitchenette,” Mr. Melman says. “The concept for this home was that the parents could get help with their kids from the grandparents, while the grandparents benefited by having household maintenance chores and meals taken care of for them.”

Universal design refers to design elements such as lower light switches, shower entrances without steps and lever door handles that increase accessibility for people with mobility issues and yet are attractive and practical for everyone.

Because the showcase home was built all on one level, that resolved the problem faced by some homeowners of creating easy access for elderly residents with limited mobility.

“One option for renovation is to add an elevator, which usually costs $20,000 to $30,000, but also adds value to the home,” Mr. Melman says. “Another option is to develop a first-floor guest suite that can function as a home office for future residents. It always adds value to expand the space of the home, especially if the rooms can have flexible uses.”

As the population ages, Mr. Abbott says, more people are conscious of the value of having rooms accessible without steps.

“A walk-out basement will always add value to a home, no matter how you use it, but if you are turning it into an in-law or au pair suite, it works best when the outside is accessible without steps,” he says. “The key is to make sure any remodeling allows for flexible future use of the space as an office or family room. It is always great to have two master suites.”

Mr. Abbott points out that a potential benefit of creating an in-law suite could be the future ability to rent the space as an apartment.

“A rental unit, even if you don’t choose to rent it out, can be a valuable asset to any home, but you must make sure you follow the rules and regulations of your jurisdiction before you create one,” Mr. Abbott says. “In order to have a legal separate unit in D.C., for example, you need two egresses and certain ceiling heights, and you need to have a business license before you can legally rent it.

“So when someone is opting to remodel their home to accommodate a parent, they may want to look into meeting the requirements for a rental unit at the same time to allow for the potential use of the space in the future as an income-producing unit.”

Mr. Levine says an important consideration when remodeling a home to accommodate another generation is the length of time the family anticipates staying together in the home.

“This is something that can be very hard to talk about, but the family needs to discuss how long they think the relatives will be there, especially if a large investment is needed to remodel the home to accommodate them,” Mr. Levine says. “Everyone needs to think about whether this is the best way to spend their money and to think about the resale value of the home, too.

“Often, the elderly parents will put money into the remodeling project because they would rather live there than spend that money on some type of retirement housing. The homeowners need to think about how wise it is to spend a lot of money remodeling their home for someone who is in poor health, especially if they must give up something they want.”

Mr. Levine says the usual considerations about remodeling also need to be discussed, particularly whether the owners want to stay in the home for the long term.

“When it comes to a question of making a long-term commitment for the good of the family, the owners need to establish their priorities,” Mr. Levine says. “If the priority is to have the relatives living together, then the owners just need to set a budget and work with a remodeling expert to get the most value from that budget and make the project as attractive as possible.”

Whether multigenerational housing will remain a long-term trend remains to be seen, but families considering opening their home to additional generations may find that extra living space enticing to future buyers.

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