Present tense, future perfect: multigenerational households abound

Source: Bloomberg

When advertising executive John Gallegos wanted to promote a new package of Spanish-language channels for client Comcast Corp. (CMCSA), he put together a spot featuring the fictional Gutierrez clan gathered around television sets in their home.

A smiling grandfather hands out popcorn in the ad. Gutierrez women weep along with a soap opera. A younger family member looks up words in a Spanish-English dictionary. And everyone shouts when a little girl tries to change the channel during a soccer match.

“It’s a snapshot of all the different extensions of what a Hispanic family could be,” Gallegos, chief executive of Grupo Gallegos in Huntington Beach, California, said in an interview.

The U.S. is experiencing a surge in the multigenerational households that were once a common feature of American life, and Hispanic and Asian families are driving the trend, according to U.S. Census Bureau data released this month. The number of such households, defined as those with three or more generations living under one roof, grew to almost 5.1 million in 2010, a 30 percent increase from 3.9 million in 2000, the data show.

They hit 2.9 million in 1950 and didn’t top that again until four decades later, according to the Washington-based Pew Research Center. At the 1980 low, multiple-generation homes represented just 2.9 percent of all U.S. households, down from 7.8 percent in 1900.

Transforming Suburbs
Although the term multigenerational invokes images of grandma churning butter on a pioneer farm or turn-of-the-century immigrants crammed into tenements, today’s extended families are more likely to live in suburbs. Among large cities, the one with the highest percentage of multigenerational households, at 16 percent, is Norwalk, California, a collection of largely single- family homes 15 miles (25 kilometers) south of Los Angeles.

“Many conservatives are locked into this 1950s paradigm of the nuclear family,” said Joel Kotkin, author of “The Next Hundred Million: America in 2050,” a book about demographics. “Boomers are aging in place. Immigrants move in with their cousins. The suburbs are changing.”

Job losses and the difficulty of purchasing a home make young people more likely to live with their parents, according to D’Vera Cohn, a senior writer with Pew who has studied the trend. Longer life spans and growth in the Hispanic and Asian populations keep older folks in the house.

The nation’s two fastest-growing ethnic groups are 50 percent more likely to live in multigenerational families than are whites, according to Pew research.

“Among immigrants, it’s the way their lives were lived in their home countries,” Cohn said in an interview.

Marketing Challenge
Corporate America is figuring out ways to create products for, and market to, these multi-income, multifaceted families, Gallegos said.

Home builder KB Home (KBH) is seeing increased demand for what it calls double master suites, two large bedrooms with attached bathrooms to accommodate parents living with their adult children, according to Cara Kane, a spokeswoman for the company, which is based in Los Angeles. All 10 of the largest communities in the U.S. ranked by their percentage of multigenerational households were within an hour’s drive of the nation’s second- largest city. All had populations over 100,000.

At the National Council of La Raza’s National Latino Family Expo held in Washington, D.C., last month, businesses tried to reach as broad an audience as possible, according to Georgina Salguero, director of sponsorship for the event. Johnson & Johnson (JNJ)’s booth featured everything from its namesake baby oil to Aveeno anti-aging creams. ConAgra Foods Inc. (CAG) demonstrated modern takes on classic ethnic recipes, Salguero said.

Asian Impact
Asians, as well as Hispanics, are increasingly gathering under one roof. The state with the largest percentage of multigenerational households was Hawaii at 8.8 percent, twice the national average of 4.4 percent. The 50th state owes its large percentage to high real estate prices and the 47 percent of its population that is of Asian or Pacific Island descent, according to Sarah Yuan, a sociologist at the University of Hawaii at Manoa.

Her research on the state’s Filipino residents found multigenerational households are most common among the poor, who live together so they can pool their resources, and the rich, who have the space.

“A lot of times it’s for economic reasons,” Yuan said in an interview. “Other times it’s just cultural preferences.”

Epicenter of Change
Few areas of the country have seen larger economic and cultural changes than Southern California. Norwalk, the Los Angeles suburb with the highest percentage of multigenerational households in the U.S., was mostly dairy farms in the 1930s. It was the hometown of former First Lady Patricia Nixon and the filming location for the 1946 noir classic “The Postman Always Rings Twice,” about a bored, small-town wife who plots her husband’s murder.

The city saw an explosion in residents after World War II as returning soldiers swelled the population to 35,000 in 1950 from 5,770 a decade earlier, according to a municipal history.

By the time Norwalk incorporated in 1957, the city’s developable land was largely built out, according to Kurt Anderson, director of community development. Population increases and additions put on existing structures have strained the municipality, which now counts 105,000 residents.

“Parking is a huge issue,” said Marcel Rodarte, a Norwalk native and city council member. The city requires more onsite parking when permits are requested for room additions, he said.

Subprime Fallout
Norwalk’s median home price leapt to $495,000 in April 2007 from $151,000 in January 2000, according to San Diego-based real estate research firm DataQuick. By July of this year the median price was back down to $255,000, a reflection of the fact that Hispanics were frequent targets of subprime lenders who are no longer in business, according to Felipe Korzenny, a professor of marketing at Florida State University in Tallahassee.

“It’s a working-class community and largely Hispanic,” said Veronica Garcia, who directs social services for the city. “In this economy people have to live together.”

On a recent Monday afternoon, the Norwalk Senior Center was bustling with folks playing bingo and taking weaving classes. Francisca Bernard, a 75-year-old retired waitress, said she has lived in the same three-bedroom Norwalk house since 1968. It now accommodates four generations of her family, including three grandchildren and her father, who is 100 years old.

“The house is big and we like to be together,” she said. Finances also play a role, Bernard said. While her daughter does most of the grocery shopping, major purchases, such as a new car, are hashed out over the dinner table.

Her father, Jose Maria Bernard, was shooting pool in another part of the center. A native of Mexico, he said he has 12 children and rotates among their houses. He said he never considered living in a nursing home because he’s still healthy and, in any case, family values would preclude it.

“My children wouldn’t let me go anyplace else,” he said.

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