The Rise of the Urban Townhouse Model

Multi-generational living is growing in the US. A report from Pew Research Center shows that 20% of adults or 64 million people are living with two or more adult generations in a single household. For real estate professionals, the trend is giving way to rising demand for larger format houses with more bedrooms, bathrooms and living spaces. Urban Pacific Group of Cos. has responded to the demand with the Urban Townhouse. The model varies in size, but generally has five bedrooms, many with en suite bathrooms.

“In the UTH model, we are providing a space for that family to live where it didn’t exist before. UTH initially was a solution directed at the moderate income large family population. We didn’t think multi-generational in the beginning,” Scott Choppin, founder of Urban Pacific Group, tells GlobeSt.com. “We just figured out for ourselves that there was a need that was not being met. UTH is an answer for moderate income housing; it is an answer for large family living; it is an answer for townhouse style apartment living; and it is an answer to multi-generational housing. It is an answer for many parts of the market, although many of them are related.”

Both economics along with changes in demographics and culture drive the trend toward multi-generational living. Living together is more cost effective, particularly in markets with a high cost of living. “The idea of sharing income and costs across the family group is becoming more prevalent because it is required in market places like California that has high housing costs,” says Choppin. “The co-living model is the same economic model but applied to unrelated people. Our units have the same economic model but applied to related family groups.”

Demographic and cultural shifts are also fueling multi-generational households. While immigrant families in particular have long lived with relatives, the practice is becoming more mainstream and acceptable. “It is becoming more acceptable for younger generations to live with their parents,” says Choppin. “The people within these new demographic cohorts are seen living with family as a more productive, positive cultural experience. In terms of culture, the highest percentage of growth of multi-generational living is in families that are more recently immigrated.”

For developers and investors, multi-generational households also tend to be more stable and long-term tenants. “These are the most stable tenants. They are stable family groups, and they are generally low-profile tenants,” adds Choppin.

The urban townhouse model is similar to the co-living model, which has also recently grown in popularity. However, Choppin doesn’t see co-living as a competitor of urban townhouses. “We are in middle-income neighborhoods with a production-oriented scope,” he says. “Common is in a high-end neighborhood. The finishes are also high-end and condo spec or semi-custom home. They are offering different amenities, like rooftop decks that attract millennials and gen-Z. So, they are at the high-end end of the spectrum, and we are in the middle.”