Demographic Changes Driving New Residential Development

1. Demographic Changes Driving New Residential Development www.RCLCo.com

2. Demographic Changes Driving New Residential Development • Changing Household Types • Growth in non-traditional-family households • Changing face of renters and owners • Impact of Immigration • When, where and how immigrants live • Impact of Race/Ethnicity • Implications for Different Housing Types • Relationship to Employment Patterns

3. Changing Household Types

4. Changing Household Types • The growth is in non-traditional-family households • Singles • Unmarried couples or childless couples • Roommates • Single parents • Non-traditional-family households • Willing to pioneer new areas • Less concerned about school districts • Looking to balance price and lifestyle • Married renters and single buyers Source: US Census, Brookings Institution

5. Changing Household Types • DC a national leader in non-married-couple households • DC - 77%, vs. 64% for 100 Largest US Cities • DC MSA - 50%, vs. 48% National Average • DC – 8% of households married with kid(s) – vs. 23.5% in US • In 1990s, married households flocked to suburbs • Lifestyle drives housing location decisions • Look for where they can live, work & play – all in one place • Active communities – “3rd Places” for informal gathering

6. Changing Household Types • What does that mean? • Product configuration changes • Less need for 3rd or 4th bedrooms • Creative living spaces • More architecture, less “sameness” • Location change • Unconcerned with conventions and traditions • Heretofore unacceptable locations • Single females prefer established locations • Couples & single men will take more risk for the $

7. Household Types | Owners • Over 110,000 new owner HH will be added (~22,000/year) • Largest % growth in Singles and Childless Couples • Married w/ children growing slower than other groups • Source: US Census, Claritas • The Brookings Institution Growth% 1.4% 2.1% 1.6% 1.5% 1.1% 2.5%

8. Household Types | Renters ~21,000 new renters –(~4,200/yr) Singles drive the rental market However… Married Couples without children ~13% of renter growth Female HH Heads ~11% of renter growth Source: US Census, Claritas Growth% 0.4% 1.5% 0.7% 1.0% -0.1% 1.2%

9. Owners • What does that mean – for-sale? • GenXers flooding the market – singles, couples without children • Designs for non-kid or young-kid households • Married w/children growing slower than other groups

10. Renters • What does that mean - rentals? • Need to design for both singles and couples • “Renters by choice” aren’t a myth (20% 50K+ incomes) – they seek quality, mobility, and convenience – but affordability key for many • GenX not having children yet – some rent for a while • Echo Boomers – tomorrow’s renter (after 2008) • Many doubling up & living with parents

11. Summary: Demographic Changes Driving New Residential Development • Maturing Boomers: • Luxury homes/condos and some rentals • More affluent demand top-flight amenities and services • GenX not having children yet, but soon • Moving into ownership • Echo Boom generation: • Tomorrow’s renter--after 2008 • Less affluent than GenX, doubling up, living with parents

12. Impact of Immigration

13. Impact of Immigration Top Ten Immigrant Populations by Metropolitan Area, 2000 • DC region is 7th in foreign born residents, 5th in total population • 8th in % foreign born • Foreign born population grew almost 7 fold in last 30 years Source: Brookings Institution

14. Impact of Immigration New immigrants made up nearly half of the overall population growth in the region in the 1990s Source: Brookings

15. Impact of Immigration • Immigrants choosing to settle in the inner suburbs rather than the District • 4% of 1990s foreign-born growth in DC • Absolute population growth in the 1990s equal in the inner and outer portions of region • 85% of inner-jurisdiction population growth foreign-born • 12% of outer-jurisdiction population growth foreign-born

16. Impact of Immigration Impact of Immigration 2000 Total Foreign Born 832,016 1970 Total Foreign Born 127,579 Source: The Brookings Institution

17. Impact of Immigration Percent Foreign Born (By Census Tract) 2000 Less than 5% 5% - 15% 16% - 25% 26% - 35% Greater than 35% Foreign born residents tend to concentrate near but not in the District Source: Brookings

18. Impact of Immigration Foreign-Born Median Household Income Less than 50% of Median Income 50% - 100% of Median Income 101% - 150% of Median Income Greater than 150% of Median Income • Immigrants tend to live close to DC • Poorer immigrants flock to DC and Prince George's County • Affluent immigrants move to Montgomery and Fairfax Counties Source: Brookings

19. Race & Ethnicity

20. Race & Ethnicity • Minorities growing in the suburbs • Mirrors national trend • DC losing African- American residents • Suburban builders should understand needs, desires of minorities Source: US Census, Brookings Institution

21. Race & Ethnicity • Hispanics live in north-central DC • Concentration in NE Prince George’s, SE Montgomery, Arlington & Fairfax counties Source: US Census, Brookings Institution

22. Race & Ethnicity • Minorities are 32% of 1st time homebuyers (national) • Minorities have lower incomes & wealth • Lenders are correcting for prior patterns of discrimination • Minorities are less mobile • 65% of minority homeowners nationwide 65 yrs of age are still in 1st home • Compared with 32% for non-Hispanic white homeowners Source: US Census, Brookings Institution, Joint Center for Housing Studies

23. Relationship to Employment Patterns

24. Demographic Changes Driving New Residential Development www.RCLCo.com