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— Multifamily Properties Quarterly — October 2015
Market Drivers
T
here are countless articles and
blogs written about the mil-
lennial housing crisis. Many
offer interesting solutions,
such as building tiny homes,
subdividing existing high-rises from
500 units into 1,500 smaller units or
dividing up larger homes into small-
er apartments.
Each of these solutions only offers
part of a resolution to a larger prob-
lem that has yet to be addressed in
a significant way. The larger problem
is providing millennials with homes
that meet their needs, as well as
providing housing that matches
the future vision of the millennials
themselves and supports their own
generational and cultural values.
The result of my research and
experience meeting with these
amazing young people, who range
from 18 to 30 years old, is this: The
millennials are one of the most
prolific generations to ever hit our
planet. This generation is 92 million
strong and they are extraordinary.
They are collaborative and hard-
wired differently, which makes them
experts in multitasking, as well as
being fast, quick and extremely
adept in the art of uber flexibility in
mind and spirit.
Baby boomers, move over, as you
are now on notice. The millennials –
the largest generation in U.S. history
– soon will enter their peak spend-
ing years, according to a 2015 report
from Goldman Sachs.
This generation is rapidly becom-
ing one of the most optimistic
generations in our new economy.
They initially went into debt to get
a college degree with the promise
of achieving their
dreams. A disap-
pointing economy
emerged coupled
with student debt
now looming at
$1.2 trillion, which
is mind numb-
ing to most of us
to comprehend
the impact this
scenario has had
on homeowner-
ship possibilities.
Regardless, their
unique approach
to life is turning
the tides of prosperity and they will
achieve success.
Millennials have invented things
that impacted the world, like social
media, and are the clear global
market drivers of technology, such
as smartphones, tablets, applica-
tions and other breakthroughs. They
also are on the leading edge of the
sustainable energy movements and
have started amazing local projects.
Their current struggle? Finding
affordable housing in the Denver
area, which supports their values of
homeownership, living collaborative
lifestyles, sustainability and manag-
ing financial debt previously men-
tioned. Some of the factors that are
keeping millennials from achieving
this dream are:
• The millennial of today will not
buy a $300,000 home (which is the
average price for a home in Colo-
rado) for two reasons: First, high
debt scenarios from college; and
second, for the major sector of this
demographic, core values are not
large homes.
• On average, 33 percent of median
income in Denver households is paid
toward rent, according to Realty Trac.
This is not sustainable. Millennials
are therefore seeking out affordable
alternatives.
• The population of millennials
in Denver has increased 58 percent
between 2007 and 2013, according to
a local news report.
• Most of the existing inventory
within the price ranges millenni-
als can afford are not attractive, are
energy inefficient, are too large and
appear to be only available in unde-
sirable or dated neighborhoods.
• Collaboration is valued highly
among millennials, and separate
single-family developments are not
desirable housing options.
• Sustainability in regard to energy,
a smaller carbon footprint, and sup-
porting a unique ecosystem is a
value shared by this group. There
are few housing developments
that are specifically designed to fit
their wants, or even less, to fit their
needs.
In an attempt to answer their call
for smaller footprints, affordable
homes and desire for collaboration,
we have derived a solution called
Microtopia Village. This vision is to
provide the millennial generation
with an innovative and sustainable
community to support homeowner-
ship, collaboration, entrepreneur-
ship, and educational and global
connection. Incorporating a rent-
to-buy financing structure will help
them attain homeownership.
A joint venture was created earlier
this year with Microtopia Ventures
Inc. and Rocky Mountain Group, who
will design and engineer the vil-
lage of over 500 micro-homes. The
anticipated $55 million project is
envisioned along the U.S. 36 corridor
between Denver and Boulder, where
a new light-rail is being built.
Public transportation is a major
value of the millennials. The vision
for the village is more than a hous-
ing development. As a new cat-
egory of community design, by and
for millennials, it will consist of
micro-homes, ranging from 500 to
1,200 square feet, centered around
a 50,000-sf community and event
center called The Hub. Each of the
micro-homes will use solar power
and smart technology, be fiber
enabled and will have an interior
designed by Ikea.
The inspiration behind the Hub is
to provide a plethora of community
events and activities, while hous-
ing permanent entities such as an
entrepreneur incubator, event center,
university extensions, health food
store, bike shop, restaurants, hang-
outs and microbrews. Its purpose is
to be a living community laboratory
supported to expand innovation,
markets and the future vision for
the millennial generation.
Lastly, incorporated into the design
are six 20,000-sf fully operational
community greenhouses growing
organic foods. The growers who
lease the greenhouses will market
the produce to the village residents,
as well as to the residents and res-
taurants of the city hosting the vil-
lage. In addition there are sections
reserved for personal gardening.
s
Robert C. Smith
Marketing adviser,
RMG Architects &
Engineering, and
CEO of Microtopia
Ventures Inc.
