Nearly 60 million U.S. residents live in multigenerational households. That’s 18% of the population, up from 7% in 1971, according to a 2022 Pew Research Center analysis.
In other words, mom and dad living under the same roof as their parents or in-laws isn’t uncommon. Add hybrid work arrangements, adult children returning home and the median square footage shrinking from 1,900 in 2018 to 1,800 currently, and you have a recipe for tight quarters.
Homeowners need more space, and they’re looking for solutions. That’s pushing builders and remodelers to rethink traditional home layouts, creating flexible spaces that can serve as independent living quarters, home offices, or entertainment areas.
“We’re building with the future in mind,” says Jon Beer of Jon Beer Contracting, a design-build firm based in New York’s Hudson Valley. “Spaces need to be adaptable, whether that means housing aging parents today or accommodating a growing family tomorrow.”
That’s true of Beer’s personal home. In preparation for his growing family, he expanded his 1,200-square-foot single-story house to approximately 2,400 square feet with the addition of a second story and a 600-square-foot extension.
While extensions, additions, and accessory dwelling units (ADUs) are gaining traction—in California, for example, the number of ADU permits increased by 11 times between 2016 and 2021—more builders and remodelers are carving out more space below ground.
“Basements are often low-hanging fruit for expanding a home’s footprint,” Beer says. “Especially in newer construction, finishing a basement is more cost-effective than building an addition.”
In addition to his extensive renovation, Beer added an egress window to his basement so that the space can be used as a flexible bonus room flooded with natural light.
Builders of new homes are also designing basements not as an afterthought but as potential habitable spaces. Traditionally, basements featured standard 8-foot ceilings, which, once mechanical systems and ductwork were factored in, often left ceilings feeling low and cramped. However, some builders are digging deeper.
“We used to do 8-foot basements as the standard, but now nine feet is the norm, and we’ve done several with 10- and even 12-foot ceilings,” says Dave Shankweiler, a project manager and estimator at Curtis E. Schneck, a custom builder based in Schnecksville, Penn. “If the soil conditions allow, it’s not much of an issue to dig down deeper, and it gives homeowners much more flexibility in how they use the space.”
Likewise, Matthew Cole, president and CEO of Cape Associates, a custom home builder in Eastham, Mass., says more clients are interested in roomier basements, even if they cost extra.
“A deeper basement is worth the cost premium, especially if finishing it later is a possibility,” Cole says.
The trend is particularly prevalent in high-end homes where homeowners want the lower level to feel like a natural extension of the main house. Nate Jurmu, owner Frontier Custom Builders in Monticello, Minn., notes that that many clients request lookout or walkout basements with large egress windows to bring in more natural light, making the space feel less like underground storage and more like a primary living area. Additionally, builders are designing basements with luxury features like in-floor radiant heating, home theaters, and bars, elevating basements into high-end entertainment or living spaces.
Whether finished basements fetch a high ROI is up for debate. Some real estate appraisers do not count basement square footage as part of a home’s official size. But for many homeowners and homebuyers, resale value is secondary to additional living space and functionality.
“The cost versus value analysis shows that homeowners would likely finish their basement before considering an addition,” says Beer. “If the head height is comfortable, if it’s dry, and if it’s easily converted, it’s a no-brainer.”
