Crowded house The rise of multi-generational living
Three generations of Zaheer Khan’s family live together in their five-bedroom Dannemora house.
They’ve just moved in, having secured a BNZ mortgage with the help of Mike Pero Mortgages after their own bank turned them down.
That bank had not been keen on the arrangement because Khan, who works in compliance for a multi-national company, was buying with his wife and his parents.
Despite a rising number of multi-generational households (MGH), banks still take some convincing about lending to multiple buyers to go into a house together, even if they are from the same family.
Instead of seeing the extra generation with its assets and its income as a source of extra financial stability for the family, Khan’s bank viewed it as a risk.
‘‘They thought of us as two separate families, not one. They said you might fall out and go your separate ways in the future,’’ Khan says.
But ‘‘you could make that same argument for a married couple’’, he says.
‘‘The bank manager herself was quite annoyed by the whole thing.’’
Because they needed a large house, his income alone was not enough.
Mark Collins from Mike Pero said would-be borrowers rejected by their bank should not consider it a final answer.
Expert brokers can often get deals done in cases where people might struggle on their own, particularly as banks have tightened up their lending criteria.
Khan was raised in Papatoetoe, but his father came from Pakistan, and having lived through the bloody separation from India, values family stability highly.
Multiple generations living together is a cultural norm in Pakistan.
‘‘There’s the cultural expectation that the eldest son takes care of the parents,’’ Khan says, something he was happy to do, prompting him to return from working in Australia.
Living his culture, and keeping his children involved with their grandparents, is important to him.
But MGHis not limited to distinct minority cultures.
The practice was once commonplace in Western societies, but by the latter part of the 20h century it was unusual, particularly for Pa¯keha families, researchers funded by building research agency BRANZ found.
But today, once again, it is a significant, and growing, part of the way people from a variety of backgrounds live, and not only here.
In the US, 57 million lived in MGHs in 2012. In 2011 about 4.3m Australians were MGHliving.
Census data shows a 49 per cent increase in the number of occupants living in extended family households between 1996 and 2013, from 333,468 to 496,383.
That equates roughly to the population of the Wellington region.
A variety of factors are driving its rise.
Later first marriage, immigrant cultural traditions, longer time spent in tertiary education (and its cost), globetrotters coming ‘‘home’’ after OEs, and the rise in relationship failures creating a ‘‘boomerang’’ generation that heads back to their parents, are all feeding the MGHboom.
And then there are economic factors such as urbanisation and the rise of dwelling prices, and rents.
Financial crisis can increase MGH. Sharing accommodation costs is an economic survival strategy for some families.
There are some cultures within our society with a greater tendency for multiple generations to live together, but the BRANZ researchers found there were far more Pa¯keha individuals in MGH living situations than any other ethnic group.
Money plays a big part in MGH thinking. Occasionally these arrangements are temporary, such as adult boomerang-ers saving for house deposits. Some families see it as the foundation of family strategic wealth generation.
‘‘The most commonly cited advantages of MGHliving were financial benefits, care of the elderly and young children, strengthening family bonds across generations, companionship, and practical help with everyday activities and chores,’’ BRANZ’s researchers reported.
In its direct interviews with MGHs, researchers found: ‘‘For others MGHliving was part of a familial economic strategy. For one participant the strategy was between a son and his parents who, after deciding to buy their first house together ‘kept buying houses together’.’’
‘‘For some Chinese families in the sample, who had many more household members, buying and/ or extending houses, adding to the family portfolio and building new, purpose-built multi-generational housing was part of a larger-scale family strategy.’’
The Khan family home is owned in a trust, which is a part of the family’s determination for it to be a family home for more than just the current generations living there.
There will be other tangible financial benefits.
Living in one property means Khan’s parents get income from their previous home, and can use the equity in it to guarantee the BNZ mortgage.
Having the grandparents at home means that in a few years, when both children are school-age, Khan’s wife would be able to return to her job as a teacher, knowing there’s someone to pick the kids up from school.
The children will one day use it as a base for uni studies, Khan hopes, keeping their costs down.
As a result of the focus on independent living, current housing stock does not cater well to MGH, the researchers found, especially for Ma¯ori and Pasifika families. The densification of Auckland, with smaller properties being developed, appears to be driven by assumptions of independent living. It could result in overcrowding. During their interviews, the researchers found examples of overcrowding including: ‘‘the grandmother who shared a bedroom with her granddaughter; parents who slept in the living room; an uncle who slept in the garage; children who did not have a place to study; the family who ate in shifts because the kitchen/ house was too small; and the need for regimented showers so there would be enough hot water so everyone in the house could shower every day.’’
Overcrowding and lack of privacy could lead to considerable household tension.
Not all MGHs are by formed by choice, and not all are safe for everyone in the home.
The researchers found people were forced by dysfunction and poverty to cohabit with multigenerations of their family, and this could expose individuals to drugs, alcohol, violence and elder abuse.