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(Deborah Baic/Deborah Baic/The Globe and Mail)
(Deborah Baic/Deborah Baic/The Globe and Mail)

Wanted: house with granny flat Add to ...

The recession slowed most home building in the United States to a standstill but it has fuelled demand for a special kind of housing: the granny flat.

As unemployment hovers around 10 per cent and health care costs spiral upward, home buyers like Stephanie Charbeneau want to cut costs by sharing shelter with her extended family.

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Ms. Charbeneau, a 27-year-old court recording monitor in New Haven, Conn., is buying a home with her husband, their two young children and her in-laws because money is tight.

"Everything is so expensive, you need your family to help you out. Thank God that they're there to help you," she said.

The Charbeneaus and Stephanie's in-laws plan to split the mortgage on a $337,000 (U.S.) two-family home with an apartment her brother-in-law may rent. It is a bigger and newer house than the couple could afford on their own.

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They are not alone. Almost 70 per cent of Coldwell Banker Real Estate agents see economic concerns compelling more families to seek housing together in 2010, according to a January poll.

At least in the short term, multi-generational housing demand is a boon for home builders, architects and developers mired in the deepest housing slump since the Great Depression.

The recession is accelerating a long-standing trend. U.S. multi-generational households jumped 24 per cent from 2000 to 6.2 million in 2008, or 5.3 per cent of all households, according to AARP, the non-profit organization for people 50 and over. Economics and culture were the main motivators.

A prolonged push for bigger and fewer homes "would dampen housing demand going forward and further dampen a substantial recovery in the housing market," said Nicolas Retsinas, director of Harvard's joint centre for housing studies.

Opportunity for home builders and manufacturers hurts senior housing, a business aimed at about 78 million baby-boomers, as more elderly people avoid costly managed care.

"We can't afford to put grandma in a nursing home now," said Monte Anderson, a Texas developer. He plans to include 50 apartments offering separate living quarters, called granny flats, for an older parent or adult child in a 500-unit project south of Dallas.

In Jeffersonville, Ind., beauty salon owner Karen Carden, her husband and 19-year-old college student daughter expect to buy a larger home, hopefully with no steps, with Karen's 84-year-old father.

"Assisted living is not an option for my dad. He didn't retire with that kind of income," she said.

Senior housing occupancy rates fell to 89 per cent from a peak of 93 per cent at the end of 2006 and early 2007, according to data from the National Investment Centre for the Seniors Housing & Care Industry. One major operator, Sunrise Senior Living Inc., had to sell off assets and is in restructuring talks with lenders.

The expense of managed care is driving much of the demand for multi-generational housing, but more adult children are also bunking in with parents.

"The empty nest is a historical relic," said Stephen Reily, chief executive of VibrantNation.com , a website aimed at women over 50 based in Louisville, Ky.

Two-thirds of the boomer women it polled had at least one adult child living with them, and half of those children brought their own children along. On top of that, parents or in-laws also lived in 13 per cent of these households.

If this trend continues, only 5.4 million new households will form over the next five years compared with the 6.9 million that more normal conditions would produce, Michael Hakim, an analyst at PPR Global, projected. That equals a loss of more than one year's average household creation, he said.

A shrinking number of households would ultimately hurt builders. But for now, the housing industry is running to meet demand for families looking to merge resources under one roof.

Home builders are seeing more buyers in groups that include a parent, said Toll Brothers Inc. Nevada division head Gary Mayo. Interest is up in products such as KB Home's Open Series, with up to six bedrooms, and Pulte Homes Inc.'s "casitas" featuring an extra bedroom, full bath and closet that can serve as living quarters.

Those who cannot afford a new home are remodelling the one they have, said Bill Gati, an architect in New York City who helps clients convert part of their house to an apartment.

Manufacturers have responded by tweaking such tools as the grab bar, which enhances access to shower and toilet, to lessen their institutional look, said Melissa Birdsong of Lowe's Cos Inc.

Wide doors and entrances without steps aid accessibility for those on wheels, be they wheelchair, walker or stroller, said Trina Summins, an Atlanta-based builder working on a home that features a ground-floor suite for parents to move into.

The goal is to share responsibilities while maintaining some boundaries.

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