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Millennials' Transportation and Housing Choices Will Shape the Nation

November 19, 2015

Businesses across America are watching the millennial market closely. They should: The 87 million millennials eclipse even the 76 million baby boomers in their numbers. Because they came of age during the Great Recession and many are saddled with enormous college debt, they have not yet made their full market force known.

But millennials have already exerted their influence in many ways. Their transportation preferences could point to a long-term shift in the way Americans commute to work, do errands and socialize. And their mode of travel is already influencing their choice of where to live.

The stereotype is that millennials are living in their parents’ basement because they’re still paying off college loans and can’t get a professional job. They travel by bus and bicycle and on foot because they can’t afford a car and don’t like to drive anyway.

Of course it’s not so simple. A new Community and Transportation Preferences Survey covering the 50 largest metro areas teases out the nuances of travel and housing preferences of millennials and other groups. The survey, by the NATIONAL ASSOCIATION OF REALTORS® (NAR) and Portland State University, sampled 3,000 adults.

Use transit more than other groups

The study found that millennials (defined here as those born after 1980) use transit much more than older groups. They are “much more likely than other groups to place a high priority on providing convenient alternatives to driving, expanding public transportation and developing communities where more people don’t have to drive long distances,” the study says.

Millennials are much more likely to have used transit in the past 30 days than any other group. Forty percent did so, compared with just 28 percent for the next highest group, Generation X (born between 1965 and 1980). But it’s their least favorite way of getting around, with only 44 percent saying they like transit.

It turns out millennials do like driving — 71 percent said so — but they like it less than any other group.

A whopping 83 percent of the “silent” generation — born before 1946 — said they like driving. Millennials also like bicycling much more than those born after 1946. (Their liking of bicycling is even with that of Generation X.) Millennials are the most likely to bicycle for transportation, not just exercise.

All groups said they like walking, including 83 percent of millennials. But as with bicycling, millennials and Generation X stand out in their preference to walk for transportation. That matches their preference for walkable communities, as noted by many REALTORS® and others who study millennials.

Mackenzie Davis Luke is a REALTOR® in Athens, Ga., a town of 120,000 that is home to the University of Georgia. There’s little public transportation, and it’s not a very bicycle-friendly community, Luke said.

“Walkable areas for us are not near transit,” she said. “They’re walkable to local restaurants and bars. People like having that sense of community.” A millennial herself, Luke has found that her generation likes to live closer to town, even if it’s not a big city.

Luke’s experience matches what Joseph Kane, researcher for the Brookings Institution Metropolitan Policy Program, found in the latest American Community Survey from the U.S. Census Bureau.

“Some markets have a big emphasis on walking and bicycling,” Kane said. “In Columbia, S.C., almost one-quarter of 16- to 24-year-olds walk or bike to work.” Younger workers are leading that trend. But the NAR study found that 19 percent of millennials walk mainly to save money, so that preference could change as their income rises.

According to the NAR survey, 26 percent of millennials used a bike in the last 30 days — similar to the 25 percent of all survey respondents. However, millennials were more likely to use a bike for transportation purposes rather than just for recreation. The top five reasons why people don’t bike more: they need a vehicle for work, school or other reasons; the places they need to go are too far to bike; they don’t have a bike; they don’t feel safe in traffic, and there are too few bike lanes or trails.

Prefer walkable neighborhoods

The NAR survey also looked at housing preferences and neighborhood design. Millennials are more interested in being within easy walking distance of places and having public transit nearby. In particular, 51 percent of millennials want to live within a short commute to work, and 40 percent want easy access to the highway. And, both millennials and Gen X are more interested in sidewalks and bike lanes and paths.

But millennials have hardly abandoned cars. Even the American Public Transportation Association (APTA) found in its survey of millennials’ transportation preferences that “driving a car is their number one preference,” said Darnell Grisby, APTA director of policy development and research. APTA also found that a variety of transportation options makes a community particularly attractive to millennials.

The NAR survey found a similar preference — millennials put more importance on living within an easy walk of places and having public transportation nearby. Overall, they prefer an attached home (apartment or townhouse) where they have an easy walk to shops and restaurants and a shorter commute.

Still, most millennials, like other age groups, live in detached, single family homes. Most of those homes have sidewalks available, but fewer have lots of places to walk to, such as shops, cafes and restaurants. The NAR survey also found that people of all ages with places to walk to are more satisfied with the quality of life in their community.

As Athens, Ga., REALTOR® Luke found, walkability is not found only in cities. That’s just as well, because in many cities, millennials just starting their careers are being priced out of city housing.

APTA’s Grisby sees promise in some of the older inner ring suburbs that have seen some wear but are near transit and offer yards that millennials may want as they start families. Some of those areas have seen recent investment by developers but are still less expensive than housing in the city or more fashionable suburbs.

“The distinction between urban and suburban is increasingly not very important,” as long as the area is walkable to destinations, said Grisby.

Will millennials grow out of their transportation preferences?

How are millennials’ preferences in transportation and housing likely to change as they get older and more of them have families? Will they want to move to detached houses with big yards in car-dependent suburbs?

Phineas Baxandall, senior analyst for tax and budget policy at the U.S. Public Interest Research Group (USPIRG), doesn’t think so. He is coauthor of the group’s October 2014 report on millennials’ transportation preferences, Millennials in Motion. (It should be noted that USPIRG supports more funding of public transit and less for highways.)

The USPIRG report arrived at many of the same conclusions as the NAR survey: Young people want walkable communities and are more open to other modes of transportation than driving. Millennials are shifting away from driving. They are much less likely than previous generations, for instance, to get a driver’s license as soon as they are eligible.

“There’s no reason to assume that millennials won’t increase their driving as they age,” said Baxandall. “As they’re employed at higher rates and have children they’re ferrying around, they will probably, to some degree, live more in the suburbs.”

But the question is, as millennials move into the traditionally more driving-intensive stage, “will they drive as much as the previous generation? Even if it’s a little bit less, that would have a big impact because there are so many of them,” Baxandall said.

Because of millennials’ lifestyle and environmental preferences, and the habit they formed in young adulthood of not driving, they realized that it’s possible to get around by public transit and bicycling. That habit, said Baxandall, will likely stay with them.

Noreen McDonald, associate professor in the Department of City and Regional Planning at the University of North Carolina-Chapel Hill, has written about the decrease in driving by millennials. The decrease, she said, can be partly explained by millennial-specific factors such as changing attitudes and the use of virtual mobility. Millennials may feel less need to drive to see friends when they can meet them virtually.

“As all generations age,” McDonald said, “their need for travel changes. Often they have more need for automobile travel.” Although older millennials are driving more than they were when they were younger, they are still driving less than previous generations at the same age. She notes a trend that has been documented for several years starting at the beginning of the Great Recession: that all age groups are driving less.

How millennials’ transportation and housing choices will change as they age is much on the minds of various sectors of the transportation industry, REALTORS®, developers and planners. The NAR survey adds useful information to the debate.

Joan Mooney is a freelance writer who has written extensively about transportation for Urban Land magazine and other publications. She also wrote the NAR’s water infrastructure toolkit.