Multi-Generational Living – Is a Next Generation Home for You?


The economy has hit many hard. 

Retirees have seen their investments drop leaving them with less money to pay their living expenses and ever rising medical and prescription costs.

College students struggle to pay their college and living expenses while not going too deeply in student loan debt.

Meanwhile, the so called sandwich generation, those who have elderly parents who need support as well as children that also need support, struggle to make ends meet and take care of both generations while also saving for their own retirement.

Multi-Generational Living:  Coming Back in Style

The idea of generations living together is not new.  One hundred to one hundred and fifty years ago, 3 generations living together was quite common.

Yet, as our society changed and people became more independent, multi-generational living fell out of vogue.  It is no longer necessary, so most people don’t do it.

However, the current economy has changed the most recent housing dynamic. 

Due to the recession, parents worry that their adult children may move back in with them (as many have, sometimes with their own children in tow), and self-sufficient grown children worry that they may have to support their parents, especially if their parents have an insufficient retirement.

While some may be concerned about two or three grown generations living together, there is a group of Americans that are embracing multi-generational living.  They find this situation beneficial for all ages, from the oldest to the youngest, both financially and emotionally.

“According to John Graham, co-author of Together Again, a book about multi-generational living, and Professor of Marketing and International Business at University of California Irvine, ‘We are seeing the nuclear family going back to the interdependence of the extended family. For the last 50 years the American ideal was the nuclear family living independently, but with the economic changes of recent decades that no longer is the solution of choice.’ He added, ‘Multigenerational living is very customary in most countries. It is now becoming much more common in the U.S.'” (MarketWatch).

As reported by ABC World News, “In 2010, 4.4 million homes had 3 or more generations living in them, a 30% increase from 10 years earlier.”  Even more staggering, according to MarketWatch, “The number of multigenerational households has increased by 60% since 1990, according to the U.S. Census Bureau.”

The How of Multi-Generational Living

Model house

New home extensions male multi-generational living easier.

Those who are interested in multi-generational living face some tough financial decisions.

Should they renovate their home?  Add on an addition?  Find a new home that is better suited to the new living arrangement?

Unfortunately, each of these options can be costly and take quite a bit of time.  One of the most common reasons for multi-generational living is that people are cash strapped, so paying for a fancy remodel or buying a new home is not typically an option.

People used to try to live together in their current home, a space often designed for just one family.  This can make multi-generational living uncomfortable and annoying.

Another Option for a Home

As a more reasonable option, Lennar, a national home builder, recently introduced Next Gen homes.  These homes are essentially homes within a home.

People can opt to leave their current home as is, and Lennar will seamlessly put a modular onto their home that can serve as a separate suite.  A typical in-law or grown child suite has a bedroom, bathroom, kitchenette, and living area.  It may have two entrances; one is an apartment entrance that is outside the main house, and the other is a door that leads directly into the main house.

This gives the other generation their own living quarters, privacy, and autonomy, in addition to all of the benefits of multi-generational living.

There are other options besides adding a modular addition to the home.  One woman elected to buy a small, prebuilt cottage to put in her backyard for her aging mother.

While remodeling a home can be time consuming, these modular additions can be added on in 8 weeks.  Even better, unlike an expensive addition, these modular additions cost less than half the price of a traditional addition.

Related: Take a Look at Mortgage and Refinancing Rates

The Why of Multi-Generational Living

There are many reasons families choose multi-generational living, but the two most common are to save money and to provide more care and support for aging parents.

Multi-Generational living allows all family members to pool their resources together.

Rather than paying two or three different house and utility payments (if each of the adult generations had their own home), they can pool their money together and pay just one house and utility payment.  This can make living expenses substantially cheaper, which is attractive anywhere people live, but even more so if they live in a high cost of living area.

In addition, this helps relieve the stress for recent college graduates who may have expensive monthly loan payments, retirees who may not have enough retirement savings, and the sandwich generation who can make their own money stretch further when everyone is under one roof.

Finally, elders who may not be able to make their meals and do other routine daily tasks can get help from the younger generations in the home.

Lennar recognized a market need and is now offering popular modular home options.

Would you consider multi-generational living in a home within a home?

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Published or updated May 6, 2013.

Comments

  1. That sounds like a very interesting concept. I don’t know that we’d do it, but I don’t know that I’d necessarily write it off. We’ll possibly be looking at being a part of the sandwich generation which will be difficult for us as our parents are scattered all over the country.

  2. I actually like the idea of this, but maybe some of the realities of living so close together would make it less attractive than I think it is. I definitely think that we will keep in mind when purchasing our forever home that we may want to have some kind of in-law suite or have room to build a separate guest house in case either set of parents decides to move in.

  3. I have friends who created an apartment for her parents within their home. Some have used guest houses for parents too. I prefer to live on my own relatively close by.

  4. My parents are planning on adding on a rather large apartment–over 1600 sqft–to our house after they retire. It will be semi-multigenerational living, since they will have all the amenities of their own house. My grandparents did something similar–they bought the house behind us and lived there for about 8 years, until they weren’t able to live that much alone. Then they added onto our house, two bedrooms, a bath, and a living area (by that point, they couldn’t cook, so they didn’t need a kitchen) and lived the rest of their lives there.

  5. Being an Indian and having spent 26 years of my life in India I know a thing or two about multi generational living. Till I was 14, we had 4 generations living together with only my father earning income.

    It was a rule to live that way, even today in most of the Indian households, not merely by choice. There are a lot of benefits of living like that. but to explain I need to write a 1000 words blog post.

  6. Our 19 year old son is moving home for the summer on Thursday which will be a bit of culture shock for my wife and I. Add to this our 22 year old daughter will be home for a couple months between graduation in June and starting law school in the fall, her first summer at home in a couple of years. She posted a written list of bathroom cleanliness rules for her brother on the mirror over a recent school break it will be interesting to see if they can coexist for a couple of months. The reality is that we love having them around, though I’m not sure about this on a permanent basis. As for them taking care of us when we get older I have vowed never to be a burden to my children and I mean it. They deserve to live their lives independently and not have to worry about us.

  7. We live in a multi-generational home. My grandmother is financially able to live on her own, but she isn’t in the physical shape to do so. My older brother moved back with us after college, and he is a math instructor at a college. My parents let him move back so that he could worry less about housing expenses and pay down his student loans. My little brother and I are also currently living with my parents, so I guess we are the typical multi-generational home. It can be nice at times, but it has it’s downsides. You can help each other out financially and become closer as a family, but you can’t really get the space you want sometimes.

  8. Heather C. says:

    A benefit not mentioned is how this can be a potential income stream if the addition isn’t needed for multi-generational living. Growing up, I had several family friends who did just that. One case was a self-sufficient apartment that once the elderly relative had passed away became a rental and in the other case, they had a trailer behind the main house that eventually became a rental unit. During college I rented a place like this as did several of my friends. Very cost effective for me and the landlord was on site.

    I think this is an interesting concept and one my husband and I are building into our financial plans ourselves. Ideally, we’d like to purchase a home with the ability to create some sort of in-law suite (such as a basement) or cottage/trailer on the property where we would have the option of being able to provide a place for aging parents or for our grown child. If it isn’t needed, we would rent it.

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