Tuesday, Jan. 25, 2011 | 2 a.m.
- Generation Y panelists say technology won’t upend convention business (1-13-2011)
- For downtown Las Vegas, a grocery store with an attitude (1-17-2011)
- How Zappos’ move to downtown Las Vegas was sealed (12-6-2010)
- Mayor: Zappos move will make it easier to market downtown Las Vegas (12-2-2010)
- Goodman: Zappos move a ‘watershed moment’ for downtown Las Vegas (12-1-2010)
- The Wall Street Journal: No McMansions for Millennials
Las Vegas is a little like the American auto companies that made a killing for years on big sport utility vehicles and trucks, only to find themselves unprepared when gasoline prices spiked and consumers turned to smaller, more efficient vehicles — usually from Asian manufacturers.
So, how is Las Vegas like GM and Chrysler? Well, developers filled the valley and made piles of money with suburban tract homes that carry little appeal for the next generation of housing consumers, according to an emerging body of survey data of the so-called Millennials or Generation Y.
That’s the generation — about 80 million strong, which is larger than the postwar Baby Boom — born from about the mid-1970s to the early 2000s.
At the recent homebuilders trade show in Orlando, Fla., Melina Duggal of the real estate consulting firm RCLCO laid out the data on the next generation of housing consumers. Her firm asked young renters where they would move to if they had the opportunity. More than 80 percent said they would choose an urban area, or a suburban area that qualified as “urban lite,” such as Arlington, Va., or Bethesda, Md. These are suburbs that feature walkability and easy access to urban amenities.
“That puts Vegas in a very tough spot, because we’re anti-that,” says Brandon Sprague of the firm Aptus, whose projects include the mixed-use Metreon in the southwest valley.
In other words, we have very little of what the next generation of housing consumers wants.
As the population here stagnates, and Las Vegas tries to attract young people and young entrepreneurs especially, this would seem to be an ominous development — a dormant development scene in a city filled with structures that young consumers don’t really want.
“We were behind the curve and exposing way too much of our built environment for a market that was no longer there,” says Robert Lang, director of Brookings Mountain West and an early predictor of resurgent urbanism in the 1990s.
It’s not an entirely bad news story, however.
To start, at least some of Millennial housing preferences can be explained by life cycle: Sure, they may want the urban experience now, but eventually they’ll marry and have children and want to live near good suburban schools and have a bigger home with a yard. When that happens, they can turn to our highly affordable glut of suburban housing stock.
(Unfortunately, however, even many of our suburbs are not well-positioned compared with other cities. The mania for land during the boom led to extraordinarily dense developments — in essence urban neighborhoods plopped down in the suburbs — with houses on top of one another, paired with a dearth of decent amenities such as parks.)
The better news, though, is for the downtowns of Las Vegas, North Las Vegas and Henderson, all of which have an opportunity to exploit the combination of changing consumer tastes and cheap real estate to create vibrancy in their urban cores.
“On the plus side, we have a downtown revival going on,” Lang says.
Clark County Commissioner Chris Giunchigliani adds: “It lends itself exactly to what we’re trying to do, both downtown and with infill development.”
Jack LeVine, a downtown Realtor, says changing tastes, as well as a revival of the midcentury modern architecture and design that can be found near downtown, continue to help downtown Las Vegas.
The young consumers he works with want to be close to work, near the art and music scene, near friends and like-minded people, in spaces that are more environmentally friendly and often simpler and less burdensome than the homes they may have grown up in out in the suburbs.
Another key feature of young housing consumers: They are carrying mountains of school debt and have entered the job market during the worst economy since the Depression. The upshot: They need cheap housing and will likely be renting long before they can afford to buy.
This story of the young isn’t a story just for the downtowns, however. “The suburbs may have to reinvent themselves to be more attractive not just to Generation Y, but to all generations,” Duggal says.
Specifically, suburbs need to figure out how to be more varied.
“There’s no variety out there for anybody,” says Curt Carlson of SH Architecture, whose projects include Cashman Equipment and the Northwest Career and Technical Academy.
Chief among our suburbs’ weaknesses: few neighborhoods where people can walk to their job or just to get a gallon of milk.
Nearly one-third of homebuying Generation Y survey respondents said they’d be willing to pay for walkability, Duggal says. Among renters the figure is an even higher 38 percent.
Sprague proposes injecting some commercial development into older residential neighborhoods.
John McIlwain of the Urban Land Institute says the valley will need to find key intersections that can be redeveloped with more intense, vertical, mixed-used projects.
Planners and architects also point to the potential for dense, walkable development around transit nodes. (Unlike cities across the country, Las Vegas has thus far rejected the kind of rail projects that are especially amenable to this kind of development.)
In all cases, Sprague says, “We need to empower planning departments to really look at these things and say, ‘We can control this,’ and set good standards for good development, long-term, and not just say, ‘Hey, you’re a developer, do what you want.’ ”