Bakersfield Californian

When new-home construction in Las Vegas came to a screeching halt a few years ago, Howard Perlman, an architect who specializes in designing condos, was wondering anxiously how he was going to get builders to hire his company, Perlman Design Group.

So he did a Google search to investigate how Americans were living, and found that dismal economic circumstances were forcing more people to double up or move back in with their parents or their adult children.

The recession, in fact, was creating a growing demand for homes that could accommodate multigenerational living. In a report it released last month, the Pew Research Center estimates that there were nearly 12 million multigenerational households in the U.S. in 2009, the latest year for which data were available. The number of Americans living in a multigenerational household that year had grown by one-third from 1980 to a record 51.4 million, or 16.7% of all Americans. The sharpest increase was among adults ages 25 to 34, 8.7 million of whom—or 21%—lived in multigenerational households in 2009, compared with 7.4 million in 2007.

Perlman himself grew up in Chicago, with his grandparents living upstairs. “It’s not a new idea, but what’s new is that there are hundreds of thousands of single-family lots ready to build on. Can we design a home that sits on a conventional lot, blends in, and can accommodate two families or a work-at-home owner?”

So he came up with a design that “essentially is a home with a villa built into the floor plan.” The extra space—starting at around 700 square feet—has its own front door and interior connections that promote privacy and independence. It also has its own kitchen, bathroom, bedroom, and sitting area.

So confident was Perlman that he was onto something that he branded his concept with names like 2Gen, eBiz, and Xl; and created a separate website,, to market it.

About a year ago, he started showing his house plans to builders in Las Vegas and Phoenix. Most were excited about the idea, he says, but they were also wary about jumping into something so new at a time when demand for housing in general was anemic.

“When he first pitched it to me, I was ecstatic,” says Steve Hilton, CEO of Scottsdale, Ariz.–based Meritage Homes. But once he started thinking about it, Hilton realized there would be challenges to overcome in such areas as zoning and deed restrictions.

Nevertheless, Meritage hired Perlman’s design team in Arizona, which created two multigenerational and live/work plans for the builder’s Lyons Gate and Villages at Val Vista communities in Gilbert, Ariz.

Pew Research Center

Hilton couldn’t estimate yet how much the added space would increase the price of the house. But he says his company is always looking for opportunities to attract new customers. “Innovation is part of our culture. We’ll try anything.”

Another builder that Perlman brought his idea to was Alan Jones, president of Lennar’s Arizona division. Perlman says Jones told him Lennar had been thinking about something like this for a while, and that Jones himself was living in a multigenerational situation.

Lennar has since taken Perlman’s basic designs and developed 15 floor plans, says Jeff Roos, the builder’s western regional president. The plans, he explains, have separate entrances, living areas, kitchenettes, stacked washer/dryers, bedrooms, and baths.

Roos believes that demographic shifts are making the home-within-a-home concept more marketable. These include a growing immigrant population, the fact that one-quarter of 25- to 34-year-olds is living with parents (according to a recent report on National Public Radio), and that 350,000 people turn 65 each month. “We see a huge doubling up opportunity, allowing people to live with each other but not on top of each other.”

By the end of this year, Lennar will be offering its “Next Gen” house plans in between 35 and 40 of its communities in the western U.S., says Roos. At its Summerlyn community in northeast Bakersfield, Calif., Lennar is featuring a 2,257-square-foot model with a Next Gen villa, whose price starts at $272,500.

Lennar has also been building a model with the mulitgenerational suite in the parking lot of Ikea's store in Tempe, Ariz. That model, which is scheduled to open on November 25, is located along the Route 10 freeway, which handles 120,000 cars per day. “The city of Tempe has been hugely helpful, and other cities really love the idea,” says Roos, who notes that Ikea is merchandising the Tempe house and may also merchandise other Next Gen models.

Perlman says he’s designed homes-within-homes for two- and three-story houses. And it appears that his idea is catching on. “Six months ago, I was calling builders. Now they’re calling me,” he says, pointing to Beazer Homes and Trend Homes as two builders that have expressed interest.

But, as always, the housing industry is overly cautious about embracing anything that’s new. Of the builders he’s been hearing from, Perlman says “20% are gung-ho on the concept, 20% say it will never work, and the rest want to wait and see.”

John Caulfield is senior editor for Builder magazine

Learn more about markets featured in this article: Phoenix, AZ, Las Vegas, NV.