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The Team at McCall Homes

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The Benefits of Multi-Generational Living for Affluent Families

An Old Concept Provides New Value for Americans

The adult child living in the basement. The famed “Mother-in-Law suite”. A spare room for a niece, nephew, or cousin who has recently relocated. In recent American history, multi-generational living has typically been associated with unusual or difficult times, most often a result of health issues or financial constraints. Concurrently, multi-generational living is often viewed pejoratively, as something to be avoided, especially by those with choices - the successful, the affluent, the wealthy. What if, however, multi-generational living had a unique set of emotional and financial advantages to offer the affluent and was purposefully pursued as a strategy, rather than avoided as a distasteful last resort?

Beginning in 2005, the financial services industry defined a socioeconomic class as the “Mass Affluent”, defining it as households with net worths between $100,000 and $1,000,000 and incomes above $75,000.  Put simply, the Mass Affluent have above average incomes and net worths, but are not independently wealthy. Many doctors, lawyers, and other white collar professionals are Mass Affluent. The Mass Affluent are peculiarly suited to implement multi-generational living well because they simultaneously have the means to be flexible, but are still at a level where the financial benefits are non-trivial. While generally comfortable at present, the Mass Affluent sometimes have concerns about the future: replacing their full income when they retire, caring for aging parents, leaving meaningful inheritances to their children.

Few adjectives describe a majority of Americans in 2021 more aptly than “lonely”, “isolated”, and “financially stressed”. Politics aside, Americans must discover ways to become financially, emotionally, and relationally stable and healthy again. The emotional and relational benefits of multi-generational living are straightforward. In poorer countries, people often live in close proximity to their extended families; concurrently, people in those countries often self-report having much better emotional and mental health than Americans do, despite significant discrepancies in financial and physical security. Why are Americans much richer materially yet worse off emotionally? Part of it is likely due to our lifestyle choices. Humans are inherently social and relational - we are not meant to live alone. American abundance enabled us for a time to live in single-family households, something that was impossible for most of human history and still is impossible in much of the world today.

Unprecedented financial prosperity enabled Americans to have an unprecedented degree of privacy and seclusion - widespread single-family living became the American Dream, another “American Experiment”, if you will. The result? Americans are among the richest, loneliest, and saddest people in the world, and we may be becoming less wealthy. Median wealth and income are stagnant or declining from the previous generation when adjusted for inflation. Perhaps we will find help from returning to an ancient practice - sharing a roof with our parents, grandparents, children, siblings, cousins, aunts, or uncles.

In some situations, multi-generational living fits like a hand in a glove. Many grandparents are lonely, and love nothing more than seeing their grandchildren. Many young parents are dual-income households, and therefore struggling to keep up with childcare, pets, and other household tasks. Moving mom and dad in provides free childcare for the couple and unlimited access to their descendants for the older folks.

The financial benefits are even more straightforward than the emotional and relational benefits. The median net worth for Americans over the age of 60 is around $250,000, the vast majority of which in the form of home equity. If the typical retired person or couple can sell their home, invest the money, and move in with family, it radically changes the financial future of both the elderly and their descendants. $250,000 invested properly should generate about $20,000 annually, around $10,000 of which can be responsibly withdrawn and spent. The elderly couple in question is boosting their discretionary income by almost $1,000/month while simultaneously eliminating some of their largest expenses: property taxes, home insurance, and maintenance. Of course, they can also opt to leave their money in their investments to continue to grow, thereby allowing them to pass on a much larger inheritance than they otherwise would have. $250,000 compounded at 8% annually turns into almost $1.2 million in twenty years, before adjusting for inflation.

Multi-generational living also allows significantly more flexibility with generational wealth transfer for parents wanting to leave their children secure. Savvy families can set up a family Limited Partnership and use that vehicle to buy or build a large home or a comfortable multi-family residence, like a fourplex or multiple side-by-side townhomes that allow 3-4 generations to live under the same roof. Mom and dad are the managing partners and put the deal together. Grandma might sell her home, move in, and roll the money into the partnership. Young married children live in one of the units and pay the mortgage instead of rent. Suddenly, several generations are financially secure, and they have the added benefit of knowing and controlling who their neighbors are. When the time comes for inheritances, children receive either a large home or a multi-unit investment property that is fully paid off.

So you’re sold on the concept of multi-generational living, now for the hardest question: how do we do it? The vast majority of homes are not suitable for multi-generational living, something Kelly Smith at McCall Homes knows all too well: “Existing homes do not allow for Multi-Gen. Retrofit would be very difficult and expensive, so the best option is new construction.”

I had coffee with Kelly a couple months ago, and she actually suggested I write this article. I have been pondering the idea of multi-generational living for a couple of years, but I wouldn’t have thought to put the idea in the magazine without her.

As it turns out, McCall Homes specializes in affordable new construction, and they specifically cater to clients interested in Multi-Gen living. The team at McCall Homes has seen the trend towards Multi-Gen living for years and offers diverse options for families interested in it.

Several of their floorpans feature multiple master suites, something that Kelly says is essential. Having experienced privacy, Americans would find it difficult to give up, so floorpans “…need to provide privacy for all adults. Everybody needs their own sanctuary.”

Kelly mentioned Annafeld community as a great example of successful multi-generational living, adding that Annafeld “is a vibrant community that emphasizes the community aspect - existing in a community that is for all ages, that really benefits everybody.”

McCall Homes’ signature communities - Annafeld and Josephine Crossing - also feature a hybrid form of Multi-Gen: parents and children purchasing adjacent homes, living in a way that Kelly calls “close but still independent.” While this approach doesn’t offer the same financial advantages as living under the same roof, the relational and psychological benefits remain, with the added perk of knowing and choosing your neighbors.

Leave it to America, the Melting Pot, to develop a new way of living. We have melded our unique sensibilities with an ancient and universal concept, combining the advantages of both to offer a way of life that is affordable, relationally vibrant, and maintains the privacy and independence that Americans - and Montanans - have learned to value so much.

  • Part of the Annafeld Community
  • A Private Living Room and Kitchenette
  • New Home Designed for Multi-Gen
  • Your Sanctuary Suite
  • The Team at McCall Homes
  • Multi-Gen Living Is Common in Other Countries