Closing the Generation Gap: Multigenerational Homes Meet Varied Needs

Paul Tsai lives with his wife and in-laws, but the 42-year-old restaurateur doesn’t feel crowded.

That’s because he lives in Riding Oaks Estates in Ann Arbor, Mich., in a multigenerational home specially designed by Horsham, Pa.-based Toll Brothers Inc., to fit the needs of multigenerational families.

When Tsai signed the contract to build the home, he added a primary bedroom suite on the ground floor, in addition to the standard primary on the second. The suite features a bedroom and bath along with a sitting area and large walk-in closet. The family shares a kitchen.

“This home affords us the best of both worlds,” says Tsai. “We were too cramped in our old home when (the in-laws) were in another bedroom next to our bedroom. But now with them in a separate side of the house, we’re very comfortable.”

Tsai paid an additional $120,000 over the $850,000 base price of his five-bedroom, five-and-a-half bath home to add the additional primary bedroom.

Multigenerational Homes are a Growing Trend

But he’s not the only one opting to live in a multigenerational home. Whether it’s college graduates returning to the fold because they can’t find a job or elderly parents moving in with their kids to avoid the cost of senior housing, more and more people are living in multigenerational households.

According to a Pew Research Center report released last year, the number of Americans living in multigenerational family households has continued to rise. In 2014, a record 60.6 million people, or 19 percent of the U.S. population, lived with multiple generations under one roof, up from 51.5 million, or 17 percent of the population in 2009.

“Based on our demographic research, there’s going to be a huge demand for multigenerational homes,” says Lesley Deutch, a consultant with John Burns Real Estate Consulting in Boca Raton, Fla. “Part of the reason why it hasn’t caught on even more is because some municipalities classify them as two separate homes on one lot, so that can be a little tricky for builders.”

One of the ways builders avoid having multigenerational homes classified as two-families is by leaving out a stove when the house includes a separate kitchen. The kitchenette will have a sink, refrigerator and microwave, but not a stove.

Miami-based Lennar Corp. has been building multigenerational homes since 2011. Its product is called NextGen and it’s essentially a home-within-a-home, currently available in more than 300 Lennar communities in 12 states.

How Does a Multigenerational Home Work?

A typical NextGen floor plan by Lennar will include a private living room, bedroom, full bath, kitchenette and single-car garage. With a separate entrance, as well as a door into the main home, residents can spend as much or as little time as they’d like with the primary residents.

“A NextGen home is an economical solution for families and for builders, who gain some economies of scale with our building practices,” says Kim Ashbaugh, Lennar’s director of NextGen brand management. “Families can combine a mortgage, utilities, maintenance, get help with childcare or care for an aging parent — and you can do it all within the comfort of your own home.”

The cost of NextGen features is built into the price of the home, Ashbaugh says, because the builder achieves economies of scale during construction. There’s a single foundation and utility box and one roof truss system. “We were able to save a lot by doing that and pass that to our customers,” she says. “We’ve worked really hard to make this a viable solution and not make people feel we are gouging them for that additional 500 to 800 square feet of home.”

Toll Brothers, also an active participant in the multigenerational market, offers options to make almost any model multigenerational, says Rob Paul, president of the Dallas/Austin Division. Buyers can elect to add an extra bedroom and bath on the first floor of the home, incorporate a “guest elite suite,” which also adds a separate sitting room or opt for a full-blown second primary suite like Paul Tsai did.

“In Texas, the second suite was not existent five to eight years ago,” Paul says. “But it has become more common and is only trending upward.”

Sunrise, Fla.-based GL Homes, a prolific developer of active-adult homes for baby boomers over 55, recently started selling homes at Dakota, in Delray Beach, Fla. The project consists of 387 homes, both two-story models geared toward families as well as single-story models similar to that offered by GL in its active-adult developments.

Amenities include a family-oriented clubhouse with pool, activities for kids and a playground — as well as pickleball courts, designed for older residents.

“We never really envisioned that we would make this a multigenerational community, but we do know that retirees who don’t want a 55+ community really have a void in the marketplace at an affordable price,” says Jill DiDonna, a GL senior vice president. “There are a fair number of older people who still want to live in a mixed community with families.”

GL sold 61 homes during the opening weekend at Dakota and the single-story model was so popular that the firm recently added a second one.

Buyers interested in multigenerational homes need to start planning early to determine what their future needs might be. Even if the need isn’t immediately present, the multigenerational suite can be used as a home office, playroom or yoga studio.

“People say this changed their lives,” says Lennar’s Ashbaugh. “We’ve got some homeowners who save upward of $5,000 a month because they are combining a mortgage and utilities. Because the space is so versatile, you could use it for just about anything.”