The Case for Optimism in Residential and Mixed Use Development

Two recently published studies bolster FitzGerald Associates Architects’ confidence that the multi-family housing markets are set to rebound.
Randyl Drummer at CoStar Group, cites growing demand for rental housing, increasing numbers of permits being drawn for new multi-family construction, and new equity investments in multi-family development companies and residential REITs in his January report “Break Out the Shovels.” Drummer’s report predicts more than 22,000 units will be added nationally this year. This modest growth will be eclipsed by new developments generating roughly 100,000 units in years 2012 and 2013.
Looking further out, a November 2010 report co-authored by Brookings Institution visiting fellow Christopher Leinberger and New America Foundation director Patrick C. Doherty forecast geometric growth and demand for new housing prototypes. Findings in “The Next Real Estate Boom” highlight the confluence of demographic factors driving renewed development–particularly in the urban cores.
77 million baby boomers and their Generation Y offspring, numbering 76 million people, will drive increasing development in cities. The study states that the suburban housing model does not provide the rich living environment or economies sought by retirees. Furthermore, the millennials (born between 1977 and 1994) have a penchant for more vibrant, walkable and commutable (green) communities. The study cites a survey indicating nearly 80 percent of this generation intends to live in urban areas��“ rejecting the suburbs in favor of more physically-connected living environment.
This confluence of 150 million people seeking a more efficient and satisfying model for living gives the architects at FitzGerald and our clients a confident, sustained, positive outlook for housing, retail and commercial real estate in our cities.