Housing For Young People Needed

Delray’s Community Land Trust is an innovative organization supported by the Delray CRA and others.

The headline was a grabber: Are You a Millennial Looking to Buy a Home? It Could Take Up to 32 Years.

Only 32% of the country’s largest generation (which consists of 75 million Americans) own homes. Those that do are flocking to interior markets, which tend to be cheaper and more cost-effective than most coastal markets. In our neck of the woods, that might mean the western fringes which creates sprawl and traffic as workers head east for jobs. But even out west, higher end homes seem to be the order of the day and many of the communities cater to the 55 and over crowd. Redfin recently reported that the 33446 area code (west of Delray)  is pacing the nation in price appreciation.


As the front line of millennials enter their mid-30s, financial security is not guaranteed. Instead, the generation is beleaguered with student loan debt (which exceeds car and credit card debt) and salaries that are 20% lower than what their baby boomer parents earned at the same age, according to a report by real estate research site Abodo.


The average net worth of a millennial is $10,090, or 56% less than what it was for baby boomers at the same point in life, according to Federal Reserve data.


Coupled with rising home prices, it could take decades for a millennial to be able to afford a down payment on a house in places like San Diego or San Francisco. This may be why more millennials live with their parents than any other generation in the last 130 years, according to Bisnow Media.

Millennials living in the country’s biggest cities, including New York City, Boston, San Francisco and Los Angeles are especially challenged.


The average millennial makes $40,500 per year. Using that average, were one to save 15% of her income each year, it would take just over 18 years to save enough for a 20% down payment on a home in Boston. It would take 32 years for a millennial to afford the average $112,000 down payment for a home in Los Angeles. And as the father of a few millennials who are gainfully employed (thank goodness) I have a hard time believing that even the most frugal and disciplined young person can save 15% of their income.

The picture in South Florida is not much different than some of the aforementioned hyper expensive markets.

I remember moving here when I was 22 and thinking that relative to New York and the Northeast, Florida was very affordable. My car insurance was lower, home prices were reasonable, there was no income tax and property taxes were much lower than my native Long Island. Even homeowners insurance was nominal at first—before changing after Hurricane Andrew.

Still, according to researchers at Abodo, Florida as a state remains much more affordable than other parts of the United States. It would take 5-10 years for millennials to save up.

Hence, the desire for developers to build apartments and the willingness of underwriters to finance deals. However, finding sites in built-out and expensive Boca and Delray is challenging. With land prices soaring, rental rents are also rising and the uncertain regulatory environment (costly, lengthy and torturous entitlement processes, toxic politics, NIMBYism and an aversion to density) make it even harder for millennials to strike out on their own.

Another headline in USA Today recently also grabbed me: Where Did All The Starter Homes Go?

The article cited a byzantine maze of zoning, environmental, safety and other requirements that has led to a 35% decrease in housing construction across the country from previous levels. According to economists cited by USA Today, the lack of supply has driven up home prices by 40% over the past five years.

Single family home construction suffers from a lack of available land and a lack of skilled construction workers, according to the National Association of Realtors. Banks are also tougher on borrowers as a result of the housing crash in 2008.

The perfect storm has led the National Association of Home Builders to sound the alarm. The NAHB says that from 2011 to 2016, regulatory costs to build the average house has increased from about $65,000 to $85,000 and now represent 25% of the cost of a home.

Of course, we need regulations as long as they are necessary, fairly priced and serve a public purpose.

Still, the inability of millennials to gain a foothold in our community should be pressing concern for public and private sector leaders.

It’s important for companies to be able to recruit workers in order for the economy to grow. Workers, young families, entrepreneurs and established companies look at housing prices, quality of life, quality of schools and cultural amenities before making a decision on where to put down roots.

Unfortunately, the word density has taken on a bad meaning. But, truth be told, density done well (i.e. properly designed for great buildings and public spaces) is essential for cities such as Boca Raton and Delray Beach. Compact and walkable development is better for the environment than traffic producing sprawl which serves the needs of cars over people. It also allows for young people to form households and become part of the community injecting needed ideas, life, energy, monies and volunteer hours which make cities work.

The recent changes to Delray’s land development regulations for the downtown core which capped density at 30 units to the acre, was a big mistake. It virtually guarantees that millennials—who seek walkable environments and don’t want to be car dependent—can’t live downtown. By limiting the supply, you jack up prices and we end up with an eastern core that’s shut off to all but the very wealthy.

The 2001 Downtown Master Plan, which did much to build on the 1990s Decade of Excellence, was a community wide education effort that encouraged well-designed projects versus a fixation on density numbers. We saw visual examples of ugly low density housing and also saw attractive higher density projects which have the added benefit of increasing your tax base while also adding residents who can support local businesses. That was the guiding rationale behind the push to add downtown housing. We wanted a sustainable, year-round downtown.

The other areas that make sense to add attainable housing for millennials and others is North and South Federal Highway, Congress Avenue and the “four corners” of Atlantic and Military, which has zoning allowing for a mix of uses. The four corners zoning—done over a decade ago—will become increasingly important as we see pressure on the retail landscape increase with big box chain stores being driven out of business by ecommerce.

Delray is ready to offer shopping center developers more options for their properties should they decide to invest and change course.

The best incentives are not monetary—which almost always leads to an arms race you can’t win with companies taking the money until a better offer comes along. Rather, the best incentives are zoning, a tough but fair and timely approval process that emphasizes design and good uses and enough density to give the next generation a chance to access your city.

We were always ahead of the curve—which is why Delray succeeded. It’s important we stay there or we will be left behind. Right now, we’re losing ground.


  1. Chris Burns says

    Great article about lack of affordable housing! Myself, 66 yrs, and my professional son, 38 yrs, are both struggling….
    For me, rents for 55+ communities seem to start around $1100 a month, if you are single, like myself, with monthly income of $1700, leaves $600 a month for utilities, transportation, food, medicines, and so on….
    His scenerio, $1700 rent a month for a 1 bd apt, plus utilities, etc. . .seriously, how can that be?
    As a single person, I worked for an elected official in Delray for 16 yrs, never making more than 40k. Retired a year ago. Trying to get by is tough, let alone save!
    Do ‘we’ have to move away from a city we love?

    I love the way you guys think and so glad to get your articles!
    Keep it up!

    Ms. Chris Burns

    • Jeff Perlman says

      Dear Ms. Burns thanks so much for sharing and for your kind comments.
      My son pays $1,600 for a small one bedroom. It’s a struggle. Coming up with a down payment is a very tough task and yet home ownership is an important part of American life and a great wealth builder too.
      I hear what your saying and wish you well, Jeff

      • The reason most millennials will never afford a house is because they’re wasting $1,600-1,700 on rent for a one bedroom. I’ve been researching the SoFlo rental market and you can easily find an adequate one bedroom for $1,100. Do that and save $500-600 a month, equalling $6,000 a year, and easily saving enough for a down payment in a few years. Or you can get a two bedroom and a roommate for $1,700 and save even more. It’s all about living below your means. Everyone can, not everyone will.

  2. Rosemary Nixon says

    I would have thought that young working singles would be sharing a nice condo or apartment as roommates. When I was young this was what people did until they got married or could afford more. When I met my husband he was sharing a three bedroom apartment in Boston with three other fellows. I think someone slept on a pull out in the living room. Are people above doing that now? If there are empty lots anywhere in Delray, can manufactured homes be put on them so they are affordable, or can Habitat for Humanity build?

    • Jeff Perlman says

      Thanks your thoughtful response.
      I do think many young people are living with roommates or at home with their parents. Habitat for Humanity has been active in Southern Palm Beach County. It is hard to find lots.

  3. xxxx Wilson says

    I don’t think the Land Trust Housing concept is better…especially if you dont own the land/property the house sits on.

    • Jeff Perlman says

      Admittedly, the land trust is not for everyone. But it is an option that ensures that land stays affordable in perpetuity. The model does allow for some appreciation.

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