As millennials continue to enter the housing market, real estate developers are adapting their housing options in Houston in order to attract and retain to downtown.

According to research from The Kinder Institute, millennials age 25 to 34 made up 17 percent of downtown Houston’s population in 2016, which was a 39 percent growth from 2000. In order to keep up with the growing population, new housing in that area increased from 3 percent in 2010 to 12 percent in 2016.

Developers in Houston are targeting millennials by incorporating unique design features to differentiate their projects from other home options already on the market. This includes incorporating art installations, working with historic buildings and building in unique locations. According to a downtown advocate in Houston, developers are restoring and rehabbing historic properties in East Downtown and creating live/work artist lofts with slick, minimal, modern styles.

Another key component to the new developments include “constant connectivity and social consciousness.” Developers are making sure that their new construction includes amenities like commercial speed fiber, electronic package delivery notification systems and balcony outlets, as well as more ‘green’ amenities like energy efficient homes and being located near public transit or ride-sharing hubs.

“[Millennials] want to be out of their homes,” a long-time housing trends reporter in Houston said in the survey, and they want to “go out with [their] friends to this cool, hip restaurant, or go to a nightclub.”

By changing the types of homes being built downtown, millennials and developers are transforming vacant lots into housing, stores and restaurants filled with more activities. Millennials also tend to favor public transportation and walkability, with cities creating festivals and activities throughout the city.

However, affordability and gentrification continue to be issues that developers and local residents have concerns about. In order to keep costs low, housing has become more dense in the downtown area. An urban and suburban developer in Houston noted that rising Midtown prices has led to higher density designs: “Wood-frame product density maxes out at about around 120 units per acre, and a concrete frame building is 300 units per acre. So, if you want to provide affordable housing and get the density to work with the land price, you’re going to have to go higher density design.”

Last fall, Surge Homes announced plans for micro condos in their development Parc @ Midtown in order to provide affordable home options for residents in the area. The condos were generally under 500 square feet and priced around $150,000. However, demand for those units were so high that prices rose on those as well. 

“We’ve seen the surveys over the last two decades of how many people want to live inside Houston, but there are only so many people that can pay $3 per square foot a month in rent or buy million-dollar penthouses,” housing analyst Scott Davis said.

Surge Homes President Louis Conrad said the project was created due to the lack of millennial-friendly options in Midtown. Millennials are interested in owning homes in Midtown, but cannot afford to enter the market in that area.

Joe Mandola, president at Trendmaker Homes, agrees and said that a lot of what is driving millennials is the price point, but they still want certain features.

“It’s not that they’re comfortable with the price point and can go higher. That’s not where we are today for the majority of home shoppers,” Mandola said. “They’re looking at affordability. They still want design and they definitely want energy efficiency.”

Downtowns will need to continue to plan for more diverse housing in order to maintain their social diversity and investment over time. Whether it be accommodating millennials with children by creating green spaces and parks, increasing walkability and access to public transit or innovating  developments to attract this demographic. 

Read more from our Neighborhoods Issue

• Cover Story: The hottest Houston neighborhoods for your market
• Developing Houston: How Grand Central Park brings the best of both worlds to its residents
• Redfin ranks Houston’s top neighborhoods
• Survey: Agents share their views on Houston neighborhoods