The (financial) Sustainability Crisis and the Millennial Condition
Author: M. Lee
It's no wonder many personal finance gurus preach that the key to wealth is home-ownership. While housing may not be the be-all end-all metric for generating wealth, housing is the largest consumer of household income. It's a statistical fact. Check out these charts from the Bureau of Labor Statistics:
Now, compare this data against this report from the Urban Institute:
"Left unchecked, current trends will result in even greater wealth disparities among white, black and Hispanic millennials."
It can be deduced that housing is a huge component to wealth disparities in the US. And let's be real hear, we're not talking about "wealth" in terms of laying back at the yacht club sipping cocktails kind of wealth - we're talking about financial sustainability. We're talking about
- being able to put food on the table regularly
- paying off student loans
- families affording childcare for kids and assisted living or hospice care for elderly dependents
- having enough expendable income to invest in a life insurance policy
These are the pragmatic components of wealth - the kind of wealth millennials are losing access to based on our current financial climate.
If we architects are honest about our impact on the world, it's not hard to come to the conclusion that our influence on the built environment in the form of housing typologies can have a huge impact. We should strive to find a way to have an impact that will be beneficial and help create the world we would like to see: hopefully a more equitable one.
The Urban Institute study concludes with "four policies which could increase millennials' access to home ownership" which offer very targeted moves to alleviate concerns of housing and wealth disparity. These four policies include financial education, credit financing innovations and regulatory reforms. While these actions are policy focused, we should also be mindful that supplemental solutions can be effective as well.
Innovative architectural design and pragmatic design services can have an important part to play in making housing accessible. Implementations like convertible living spaces and open floor plans can achieve efficiencies that minimize the gross square footage of an architecture with little to no downside to usability and delight. Exploration of passive design strategies and energy efficient building systems can greatly reduce utility and maintenance costs supportive of a long-term financial health strategy. Weeding out superfluous luxury and emphasizing practical frugality can be achieved without compromising the core values and vision of a well designed home.
According to Pew Research, Baby Boomers are about to cede the throne of the largest generation by population to millenials.
And yet, millennials are the population with greatest exposure to financial insecurity. By attacking the most critical vulnerability in the financial health of our most populous generational demographic we might seek to, dare I say it, better the world. Architects are capable of immense creativity. Deploying that creative capital on making good design and making good design accessible is part of the ethos of 355.