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January 31, 2015

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Generation Y wants housing Las Vegas has in short supply


Justin M. Bowen

Leora Olivas, 26, hangs out at the Beat Coffeehouse in downtown Las Vegas last week. Olivas is looking to move to the downtown area.

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From left, Melanie Malia, 28; Alicia Sanchez, 26; Leonela Obando, 25; and Katie Gilbert, 23, spend time in downtown Las Vegas, here at the Beat Coffeehouse.

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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.’ ”

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  1. What about my generation, 1958-1965 "The Tweeners".

  2. Well I am a "Gen X" and have lived in a cool "Loft Lite" apartment in Downtown for 6 years. I would never dream of living in the suburbs, where you barely know your neighbors and you look outside your window just to see a house that is a mirror image of the one you are in. I should know I grew up in the burbs in this city.

    Living and working within a mile of your house saves energy, commute times, helps build a sustainable community and neighborhood. It takes me 7 minutes to go from my front door to work everyday by car, 15 minutes by bike or 20 minutes walking.

    Downtown Las Vegas is the future of this community and many will hem & haw about it, but change is the only constant...

  3. Wouldn't it be great if The Western became the Gen Y hotspot? I'd love to see that transition.

  4. part of the problem is very few of the developers in the last 10 years were innovators. They made a little bit of cash and THOUGHT they were a Real Estate Developer.

  5. Good article, but not enough emphasis on the Fremont District. After spending some time living in the suburbs in the biggest and nicest house I've ever lived in, with all the generally bland conformity -- if you've seen three strip malls you've seen just about all of them -- and the nearest store is a 711 a full mile away, I'm running screaming back to urban living. An apartment with most of what I need within a 15 minute walk, and it's mostly local businesses. Not the usual McAmerica defining the rest of the city.

    Brian_Paco_A -- see you at the Beat.

    "Today's weirdness is tomorrow's reason why." -- Hunter S. Thompson

  6. Well, according to the article, "...eventually they'll... want to live near good suburban schools.."

    Good luck with that in Vegas.

  7. LV has a problem because it grew to fast. Nevada (LV) grew 35%, more than any other location in the country according to the 2010 census. Las Vegas was Americas fastest growing city during the last decade. Much of that was done overnight without adequate planning, long term goals and little real thought. Buyers, sellers and developers all just seeing dollar signs and little else. That's what happens when folks falsely believe their house is a short term investment vehicle instead a home for their family for decades and THEIR neighborhood.

    Urban, suburban and rural. Three different living environments, each with numerous variations. The shame of Las Vegas is that our suburban development was done poorly. Very poorly. Most other outgrowth from cities occurred more slowly, is more thoughtful and more varied as it covers several decades and not one.

    The author is correct. Each of these living venues appeals to different demographics and different needs. Many young folks see the urban small neighborhood as preferable. Many older more experienced folks see the space afforded by suburban and rural or semi-rural as freedom. When I was young the city was fun and exciting. Now it's confining and limiting.

    A healthy community should have a mix of all and if done properly, they all work together allowing everyone to satisfy their needs. We would hate living in vertical housing without parking and personal space but for some it's just perfect. The ticket is to have an overall plan for development that satisfies various needs and still encourages developers.

    Again, the shame of Las Vegas is that developers were allowed to build housing boxes like chickens live in instead of neighborhoods or small communities. Homes on top of each other, lack of parks, walking trails, food and other necessities not integrated are all signs of the developers being in control instead of the citizens.

  8. Hmmmm.....I live in an area of town where services are easily within a bicycle ride of my home. It's not in the city, but it's just minutes from downtown. Sure, the neighborhood is older but I know most of my neighbors and enjoy not having a gate, an HOA and a postage stamp lot with my neighbor's window three feet away from mine. My 1,450 square foot home sits on a 7,500 square foot lot. These days that's a total anomaly. But I like the situation because I'm right off the feeway and at the end of the street. Sure downtown condo living is nice but I like to ride dirtbikes and jet ski as well as bicycle. It's kind of tough to store those things when you're living in a condo. Vegas has something for just about everybody if you're willing to keep an open mind.

  9. One of the things that the author forgets, is that with low prices across the board in Real Estate for at least the next decade, LV will become one of the "HOT" retirement community's, with people like me and the wife. Over 50, sell the house in Hawaii for a profit and retire. I'm not living in an 'urban enviroment' when I come. $250-300k in Vegas would buy me far more then 1 million on Oahu!


  10. I wonder what people living in brownstones in Manhattan have to say about houses lined up right next to each other. Personally, I like the small easy maintenance lot and the fact I don't have to share a common wall with anyone.

    Oh yeah, people love to walk. I would love the health benefit of walking to the wonderful neighborhood parks nearby (Majestic and Policeman's Memorial) but the dog poo lining the sidewalks makes the experience less than savory. The last time I took a walk on one of the urban pathways I was nearly run over by a pack of motorbike riders who had commandeered the trail. They startled me so much I forgot to focus and I stepped in a pile of dog poo trying to get out of their way.

    Oh well, back to the treadmill in the exercise room of my 2000 sq foot home on a 3000 sq ft lot. The blinds are drawn so I don't have to look at my neighbors twenty feet away but that's okay -- there's a PBS documentary about the National Parks on the flat screen instead.