We all know that housing starts have a major impact on our economy—and our industry. When a young adult buys his or her first entry-level home, that means someone else is likely moving up. But what happens when entry-level homes are not single-family homes at all? We’re in the process of finding that out.

Last week, I attended the Window and Door Manufacturers Association’s (WDMA) Northeast meeting in Baltimore, and one of the highlights for me was a presentation by Danushka Nanayakkara-Skillington, the assistant vice president of forecasting and analysis for the National Association of Home Builders (NAHB). Her analysis suggests that multi-unit residential starts will remain dominant in upcoming years with millennials, who are leaving their nests in higher numbers than in the past, looking for affordable, sustainable and low-maintenance living.

In the past, apartments, condos, high-rise complexes and such had a reputation for meeting minimum code compliance with little to no effort (or money) going toward environmentally friendly upgrades. But now that millennials are entering the market more prominently, that needs to change. It’s well known that this generation values earth-friendly living, and energy-efficient upgrades remain important in home purchase decisions (although they can’t always afford them). As a result, we’re seeing commercial, multifamily and mixed-used builders emphasizing sustainable practices and move-in ready features that appeal to these new-generation home buyers.

Case in point: The article “Commercial Real Estate: 51 developments apply for Better Buildings project” details how builders in Vancouver, British Columbia, have adapted and are taking part in the Better Buildings BC Net-Zero Energy-Ready challenge. So far, more than 50 developments have signed on since its inception in October 2018 across a broad category of building types, including high-rise residential, low-rise residential, office, institutional, mixed use and “other.”

While this program offers financial incentives and notoriety, it is also telling, based on how many developers signed on so quickly. It proves that there is an interest and a shift toward not only making living space more appealing and more affordable for new buyers, but also toward making green building a more mainstream initiative that will surely change the perceptions—and expectations—surrounding multifamily residential buildings going forward.

With net-zero housing (multifamily or otherwise) being so attractive to energy-conscious Millennials, the View from Here is that entry-level homes cannot be what they used to be, and those who adapt to this new reality the fastest will have an advantage. At the same time, these trends should change demand for more energy-efficient fenestration where the lowest cost has been dominant in the past.

What’s your View? Email me directly at eric.jackson@quanex.com.

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