Changing Families and Changing Housing Demand

Excerpt from June, 2014 DBEDT Report -- Kakaako: Urban Core Living Page 5-6

Even if an urban core area is underutilized, redevelopment of the urban core would fail if there is not enough demand for the area. In order for an area to grow in population, it not only requires an adequate supply of housing, but also enough demand for living in that area.

Hence, we need to build more housing. But the looming question is, “Where do we build it?” For a long time, buying a large single family house in a suburb represented the American dream. People were willing to move out of the city in exchange for bigger and newer houses, safer neighborhoods and better schools. Honolulu was no exception.

Recently, however, we have observed an increased preference for living closer to the city center. Worsening traffic in Honolulu could be one cause, however it is likely not the only reason for the shift back to the urban core. Compared to the older generation, the newest generation has grown up in the age of the internet and social media and prefers a more connected and convenient lifestyle.

Another factor for this shift is the changing household pattern. Larger sized single family houses in the areas farther from the city center were mostly built for families. Working parents were willing to accept the inconvenience of longer commutes and traffic jams for a bigger yard and better schools for their children.

For Honolulu County alone, over 3,300 new homes would be needed each year to accommodate the anticipated population growth.

However, the traditional families who have been creating that housing demand have significantly diminished over time. In 1960, 86 percent of total households in Hawaii were family households, comprised of people who were related to each other by birth, marriage, or adoption. However, this share decreased to 67 percent by 2010.

Within family households, the traditional family type that consists of a married couple with children has rapidly decreased. As Figure 3 shows, the absolute number of traditional family households barely grew for the past 50 years while the total household number tripled. With increased numbers of unmarried couples, single parents, broken marriages, and couples who choose to delay or forgo childbirth, the share of traditional households (married couple with children) has decreased from 56 percent in 1960 to 20 percent in 2010.

Another trend is the proliferation of one-person households. The share of one-person households as a percentage of total households in Hawaii increased from 12.1 percent in 1960 to 23.3 percent in 2010.

The fast increasing number of those living alone is a result of increased individualism and improved financial ability, as young working adults can afford to maintain a residence of their own. Also, the aging senior population often lives alone and has also contributed to the increase of one-person households.

All these changes in household forming style have resulted in a new diverse housing demand. While family households with children are still more likely to be attracted to bigger houses and safer neighbor- hoods in the suburbs, diverse and dense city core living would better appeal to singles and couples without children. Therefore, the increasing number of non-family households and families without children implies increased potential demand for housing in the urban core.

read ... DBEDT:  Kakaako Urban Core Living