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How Millennials Move: The Car-Less Trends

August 2, 2012

With drastically different views of transportation from those of the generations that came before them, millennials are transforming communities and the developments that shape them. The still-unanswered question is whether that’s a short-term or a permanent transformation.

Millennials own fewer cars and drive less than their predecessors. They’d rather walk, bike, car-share, and use public transportation — and want to live where that’s all easy.

Jarret Izzo senses his views on transportation are common among his compatriots in the millennial generation. “There’s definitely a continuum, and I probably bike more than most,” says the 26-year-old Boston marketer. “But for a lot of people, some combination of biking, walking, using a car-sharing service, and public transit is very doable. Many of my lifestyle decisions are based on not having a car any time soon.”

With drastically different views of transportation from those of the generations that came before them, millennials like Izzo are transforming communities and the developments that shape them. The still-unanswered question is whether that’s a short-term or a permanent transformation.

Commuting: Less, please!

Who are millennials? Also dubbed Generation Y, some demographers peg millennials’ birth years as early as 1975, while others say the generation began in the 1980s (hence another name: “eighties babies”). On the back end, some set their last birth year as 2001.

While birth years may vary, it’s similar behaviors and mindsets that define generations, says Jason Dorsey, a millennial himself and chief strategy officer for The Center for Generational Kinetics in Austin, Texas. “When those start to change,” he says, “that’s when you have a new generation.”

Dorsey pegs the millennial generation as today’s 17-35-year-olds and defines them based on unique events that have shaped their views. “The first defining moment for millennials was the space shuttle Challenger explosion in 1986, because we all watched it in school,” he explains. “The end defining moment was Sept. 11, 2011. For an event to be influential, you have to have an emotional connection to it.”

So if these shared experiences and attitudes define generations, is there a shared mindset among millennials on commuting? Absolutely. They want to spend as little time as possible doing it unless they can simultaneously do things they value, like texting, exercising or socializing.

Another shared perception: Cars are a hassle. In 2008, only 31 percent of 16-year-olds and 77 percent of 19-year-olds had a driver’s license — numbers dramatically lower than the 1978 numbers of 50 percent and 92 percent, respectively, according to the U.S. Department of Transportation. Even as millennials age, they’re driving less than prior generations. In 1995, 20.8 percent of autos were driven by 21-30-year-olds, according to the Federal Highway Administration’s 2010 Household Travel Survey. By 2009, that number had dropped to 13.7 percent.

“For baby boomers, owning a car was a coming-of-age, life-stage thing,” explains Rebecca Ryan, founder of Next Generation Consulting in Madison, Wis. “The coming-of-age toy for the next generation is the smart phone.”

Several factors contribute to millennials’ negative perceptions of cars. “One is the expense,” says Ryan. “Millennials are the most unemployed generation, and their college debt compared to that of their baby boomer counterparts is exponentially higher. Millennials also believe cars are ecobombs — that they’re inheriting a planet that’s totally messed up, and they don’t want to contribute to it. The final kiss of death for cars? You can’t text and drive. All these things together create a perfect storm against cars.”

The sharing generation

Instead of driving, many millennials prefer to hoof it, bike, use a car-sharing service, and hop on public transportation. “I hadn’t ridden a bike too much while growing up, but now it’s transportation,” says Izzo. “I’m glad for the exercise, but that’s how we get places, along with public transit and a car-sharing service. Those three things triangulate to make it doable.”

Fifty-three percent of millennials say they’d participate in a car-sharing service, reports Zipcar’s 2011 study of millennials. Michael Lander knows that first-hand.

“We’re adding a car-share membership program as an amenity in our apartment buildings,” says the president of Lander Group, a Minneapolis development company.

Millennials also drive public transit use, which tends to be highest among younger adults, according to the American Public Transportation Association. There’s high use among 20-24-year-olds, and use remains fairly consistent among the 25-34 and 35-44 age groups.

Where transit is expanding, so is housing. “The Washington, D.C., Metro’s green line was completed in 1999, and during the 2000s we saw the green line corridor capture one-third of all growth in the district between 18-24-year-olds,” explains Darnell Grisby, director of policy development and research at the American Public Transportation Association in Washington, D.C. “More than 5,000 multifamily home units were added to the green line corridor in the 10 years after it opened.”

Public transportation is “huge” among millennials, agrees Rhonda Hayden, a team leader at ZipRealty Inc. in McLean, Va. “The first thing people say is, ‘I want a place near the Metro,’” she says. “A neighborhood’s walkability score is also a big issue. They’re not as tolerant of commute times as other generations.”

Transit may capture even more millennials — and keep them as they age — as agencies tap into millennials’ smart phone addictions. “Today, there’s an expectation you’ll have Wi-Fi on your commuter train,” says Marnie Primmer, executive director of Mobility 21, an Irvine-based Southern California transportation advocacy coalition. “It’s a nonstarter for people to consider using transit if they can’t be productive. We’re also seeing private companies, like RideAmigos.com, which has a carpooling, ridesharing, and taxi-sharing phone app, and others develop apps to pay for on-street parking with your cell phone. That instantaneous access to information that people carry around in their pockets will change how they approach transportation.”

Grisby agrees. “Transit authorities around the country have started to use smart phone apps,” he says. “Young people love this. It helps demystify the ridership experience by making it easier and more attractive to use.”

In 2011, the Massachusetts Bay Transportation Authority earned APTA’s innovation award by exposing its technology to allow independent software developers to create real-time transit apps; they enable users to check routes and learn when the next bus or train will arrive at their stop. “We’re seeing very fast movement in this area,” says Grisby. “In some of the largest and even moderate-sized cities, it’s driving ridership. Boston had a 5 percent increase in the last quarter of 2011, and the MBTA attributes that to the use of these real-time apps.”

Millennials are also contributing to a surge in biking. “What I find interesting is the proliferation of bike use over the past few years,” says Laurie Volk, co-managing director of Zimmerman/Volk Associates in Clinton, N.J., which provides housing market analysis for municipalities, cities, nonprofits, and builders and developers. “I was on an assignment in Oklahoma City, Okla., — the heart of the open west with broad streets and no transit to speak of. There were a number of bike stores, and they have bike lanes all over the downtown. I talked to bike-store owners, and they said biking is the new golf for the older generation. There I think biking is being propelled by both millennials and older men. In most other cities, it’s propelled by millennials.”

Cities and developers are doing everything they can to accommodate millennials’ commuting preferences. “Some cities — like Buffalo, N.Y., — are requiring bike racks to be in all public parking garages, and others give building owners bike racks to place outside their buildings,” explains George Grasser, a real estate attorney, developer, and head of Partners for a Livable Western New York. “Many cities are also redrawing street lines to allow bike lanes. We tell cities that even if they don’t have room for a bike lane, they should restripe driving lanes to 10 instead of 12 feet wide. Drivers drive to the road’s geometry, not the speed limit. We also tell them they can increase biking by requiring bike racks on public buses so people can bike to and from bus stops.”

Where millennials live now and in the future

Based on these mobility preferences, millennials say they prefer urban living. Seventy-seven percent want to live in an urban core, according to a 2012 study by RCLCO, a land-use economics firm in Washington, D.C. The question is whether, after a downtown fling, millennials will follow in their parents’ footsteps and purchase homes in the suburbs.

“The choice to buy a single-family home and move to the suburbs will be the dominant position — no question,” explains Lander. “But in the past, we might have seen the number of people staying in core cities in the low single digits. Now we’re moving to maybe 15-30 percent. Is a single-family home in the suburbs dead? No. But when a number is growing like that, it’s a trend, and the trend is away from the single-family suburban home.”

Lander believes that will continue as long as commuting remains costly. “We’ve always thought the most affordable housing has been further from the core,” he says. “However, a new study says if you add the cost of transportation, that calculation flips, and the furthest places out become the most expensive. That’s one reason people are moving closer in.”

Lander’s referring to the Housing + Transportation Affordability Index — which claims to capture the true affordability of housing based on its location — released in February 2012 by the Center for Neighborhood Technology in Chicago. According to the index, people living in neighborhoods with access to transit, jobs and amenities shouldered a smaller annual increase (about $1,400) in transportation costs from 2000-2009 than those living in car-dependent places (about $3,900).

Hayden’s seeing that preference play out. “Eighties babies who are starting to think about having a family will move further outside of Washington, D.C., but they still want to be on public transportation, and they’re willing to drive to get to that Metro station,” she explains. “If they do buy out in the exurbs, the more frustrated they are with the commute, the faster they want to resell and move closer in. Especially now that it’s more affordable, they’re sacrificing the bigger house so they don’t have to deal with the commute.”

Ultimately, knowing where millennials will land on the housing spectrum will be a waiting game. “People typically make that house purchase when they have big events like marriage and kids,” says Dorsey. “Because of the economy and credit markets, millennials are delaying those decisions.” We’ll have to see which trends hold steady as the economy improves.