'Behavioral changes, initially motivated by economic conditions, could become ingrained'
I'm 21, live in New York City, and let my driver's license lapse over a year ago. I don't plan on owning a house, preferring to drive my surplus wealth into assets I understand better and which don't restrict my mobility, and don't care to own a car.
This is not economically motivated - I have comfortable free cash flow and a healthy balance sheet free of personal debt. I pay for a car service and take taxis more than public transportation and pay more than the average U.S. homeowner's mortgage payment in rent. I also spend a great deal more than my parents, who find my behaviour and preferences baffling, on travel and technology.
I won't disagree that a significant fraction of decreasing home and car ownership may be explained by economic factors, but would caution that (a) there is a significant minority that is making these choices as a matter of preference, and, (b) for the rest, these behavioural changes, initially motivated by economic conditions, could become ingrained to where they persist beyond economic weakness. With the second point I'm not saying we will be a "cheap" generation, just cheap traditionally, as we spend in categories we value more than piles of sticks and little steel boxes propelled along asphalt by exploding chemicals.
'I live in NYC because I
don't like driving and hate commuting. If I was into cars and houses, I
would live in California or Texas.'
'We don't want to be reliant on a car'
Wanting to not be reliant on a car is a big part of the reason I moved into the city in the first place. I did the calculation many years ago, and figured out that even from a purely financial perspective it's better - the rent's higher, but cars are impressively expensive to own, fuel, and maintain. And there are a bunch of other financial perks. Living within walking distance of numerous bars saves a mint in cab fares, for example. (Not to mention that suburban taxi service tends to be an enormous PITA.) Living or working in the 'burbs is absolutely not an option for our household. The reason is quite directly that we don't want to be reliant on a car. - bunderbunder
'I could afford a new car if I wanted one'
I get around by bike and don't own a car, but could afford a new car if I wanted one, and this is true of many of my friends. Ideas stemming from New Urbanism are a pretty big deal in at least a certain sector of our generation; we're much more likely to consciously decide to prioritize proximity to things over cars, and even if we can afford cars, we're (I'd like to think) more mindful of the sustainability consequences of the modes of transportation that we choose than our parents' generation was; further, I have a fifteen-minute commute and don't have to worry about traffic or parking, and it would take a lot for me to be willing to give that up. This is in Washington, DC, but I know people in similar situations in New York, San Francisco, Portland, and Seattle. -- apendleton
'The car has ceased being a vital communication tool'
In the age of smart phones, the car has ceased being a vital communication tool for young people. There's no need to drive to the mall to see if Paul is there hanging out. A text will let me know that he's at Joel's party instead. Another text and Steve will swing by in his car.
The housing situation is another matter. There's a glut. Credit is tight. Jobs are scarce. And housing prices are going down. Millenials aren't stupid. -- brudgers
'Young people do aspire to walk and bike everywhere'
Those few places in the US that do have great walkability/bikeability/public transit are booming and in huge demand.
I think many young people do aspire to walk and bike everywhere, which is why they aspire to be able to live in vibrant, much-denser-than-suburban environments. That this is true is obvious when you compare housing prices. People pay a huge premium for it.
Biking almost everywhere is awesome if you're fortunate enough to live in a place that makes it safe and convenient to do so. I take trips by bike at least four times more often than by car, purely by choice since I own both.
When we visit family out in more typical America, my young son gets frustrated by so much time spent in a car seat. He's "spoiled" by always being able to interact much more with his surroundings, whether walking, in his stroller, or on my bike with me. -- ef4
THE 7 MOST IMPORTANT FACTORS
Late 20's/early 30's here. There are a couple reasons, primarily economic in nature, but also significant secondary cultural reasons.
1. Job mobility. Confining your career to one city, especially in its early years, seems foolhardy. Given the very large transaction costs of buying/selling and owning real-estate, renting seems more prudent.
2. Lack of capital. Student debts, unemployment, economic depression, boomerang generation, et cetera.
3. Housing market volatility, and lack of home equity appreciation. Housing was a reliable investment for 40 years, from the widespread adoption of the 30-year loan to about 2006. Now, there seems to be little reason to believe that housing is an attractive investment. It's certainly risky from a diversification standpoint to put so much of one's money into a single asset. Secondly, the housing market is in a state of unprecedented regulatory uncertainty. Who knows what the future regulations on mortgages will be? This could either turbocharge or crash the housing market. Best just to stay away.
1. Urban gentrification, and the rise of, for lack of a better term, "ghetto chic", such as warehouse lofts and such. Popular culture, which serves as an aspirational barometer, portrays the suburbs as stuffy and desperately boring, while the city is exciting and fashionable.
2. The supremacy of the internet as a cultural common and electronic entertainment. Where once teenagers spent considerable effort decorating their room and plastering their walls with posters, now that effort is spent crafting their Facebook pages just so, making sure their walls, status updates, and photos reflect their ideal self. The more time you spend looking at a glowing screen of some kind, the less you care about the environment around it. Translate that attitude into your 20's and 30's, and you have people who are willing to live in a small, barren apartment with IKEA furniture, but will take trips to Bali and $100 restaurants. All documented for their flickr page, of course.
3. Demotion of home and car ownership as status symbols. Either by cultural shift or economic necessity, these things just don't factor greatly among the urban class at this age.
4. Late family formation. The primary reason to move to the suburbs is for space to raise children and good schools. If you aren't getting married and having kids, the move to the big house is basically an academic discussion. Without a house in the suburbs, why buy a car? -- A_Lee
'The car market just evolved itself out of the reach of many young people.'
You're probably right, but that doesn't lead to a conclusion that the effect is caused by the economy.
In absolute dollars, cars are more expensive than they used to be, but for your dollar, you get much more car. That is, there are more features (stereo, A/C, power everything), more safety (both structurally as well as ABS, better restraints, etc.), more reliability, and much greater life expectancy  from a modern car. In short, it's a better investment.
If you've got enough money to meet the minimum threshold for buying a new car, you're going to get more for your money than you did in 1980. But that minimum threshold has definitely been raised. Part of this is from consumer demand; part of it (particularly in areas related to safety or emissions) is government mandated.
So it looks to me like the car market just evolved itself out of the reach of many young people.
 We just got a new car for the wife, trading in her old car at 200,000 miles. My car has 128,000 and is still running strong. In this age those numbers are expected; back then, a 200K mile car would be a minor miracle. -- CWuestefeld
'A drastic lack of desire of my generation to own a house or a car vs. earlier ones'
I'm not American, but I also mention a drastic lack of desire of my generation (late X or early Y depending on who you ask) to own a house or a car vs. earlier ones. I bought an apartment only when i could save of one in one year and buy in cash, and only recently bought a car (also within a couple months of income) only because of moving to a place with little public transport. This has nothing to do with economy, this is behavioral change. Freedom in all forms is the thing we value most of all and ready to spend a lot of money for, and houses and cars have negative value in this respect, they bind you.
THE DREAM OF NEW URBANISM IS ALIVE IN PORTLAND
I live in Portland and use public transit every day. On every article about Trimet on OregonLive, there are people that cite the same numbers you do, that say that these services are useless and that nobody uses them. Until you do use them, and you realize that every bus is full, every Max car is standing room only and for as slow as the streetcar is, it is still packed every time. Considering the growth rate in this city, it isn't surprising that numbers look like they're going down. I complain about the continuously, almost monthly, rising costs of a Trimet pass every month, but $100/mo compared to the $600+ I was paying for insurance and car payments (and not even including maintenance) has allowed me to live a more comfortable lifestyle. Forcing me to get a bike and living in a city that embraces its bicyclists has even made it a more healthy lifestyle as well.
'Our country has become fat and lazy because of suburban
sprawling, auto-centric lifestyles'
Our generation is tired of watching baby boomers and previous generations abuse this earth with their auto-oriented obsession.... Cars are expensive, and if you don't need one, why should we have one? We live in cities, where you can ride a bike, take the train, or....yes, get this baby boomers...WALK to your destination!! Our country has become so fat and lazy because of suburban sprawling, auto-centric lifestyles, that we don't know anything different. My generation can see the forest through the trees, we can see the wolf in sheep's clothing so to speak. Big companies like Ford are bloated with cash, and are trying to hard to push an ideal that was popular with previous generations on us.... it's not going to work. -- Clayton Jirak
'It's clear there's a shift ... Stop calling me lazy'
It's clear there's a shift. It blows my mind how misinformed baby boomers are about my generation. My parents don't give me anything, I'm completely financially independent, I have a masters degree in business and make crap money because salaries are at their lowest they've been in a long time compared to the cost of living. I live in the city so I don't need a car to get around and it was costing me over $100 a month just to park it so I sold it to save that extra $100.
We want to hear what you think about this article. Submit a letter to the editor or write to firstname.lastname@example.org.