Silver Tsunami

Housing America’s seniors

By Yardi Blog Staff on Aug 10, 2015 in News

America is in the midst of an unprecedented growth of the senior population. By 2030 there will be approximately 132 million individuals over the age of 50, the Joint Center for Housing Studies of Harvard University (JCHS) predicts.

At the same time, one in five Americans will be 65 and over, with the 65-74 age group reaching 38.6 million, nearly double of what their numbers were in 2010. By 2040 every eighth American will be over the age of 75, while currently only one in sixteen is. All in all, in less than 20 years the 50+ generation will increase by 23 million.

While there’s still time to plan for this unprecedented growth, communities, developers and policy makers need to implement long-term plans to safely and equitably accommodate America’s silver Boomers.

The Silver Tsunami

The silver tsunami, as some have dubbed the influx of aging Baby Boomers, started showing its force in the mid-nineties, when the oldest Baby Boomers hit 50. Between 1990 and 2010, the pre-retirement age bracket (50 to 64 years old) swelled from 32.5 million to 58.8 million. With the oldest Boomers steadily crossing 65 now, that growth will feed into the senior demographic, causing an unprecedented growth.

Family makeup impacts senior housing needs. 47 percent of householders under the age of 50 have at least one child living in the home. For those over 50, that number drops to nine percent. The number of people living alone also increases steadily after 50. By age 80, three out of five households consist of a single person, and 75 percent of those are women. This in many cases leaves seniors and pre-retirees in oversized homes, which can be costly to maintain.

Pre-retirees and seniors looking to downsize and/or move into some form of senior housing were hit especially hard during the economic downturn, as their home equity was locked up in a soft housing market. The recovering single-family market however, paired with a strengthening stock market has a lot of seniors feeling safer about their options, Marcus and Millichap found. Freeing home equity has allowed for more seniors to relocate funds towards senior housing such as continued care retirement communities (CCRC).

A more stable economic environment is also allowing younger generations to dedicate funds towards specialized housing for senior parents. As a result, occupancy has grown across all senior housing segments: independent living occupancy is on the rise, and skilled nursing facilities are posting lower vacancies. Growing demand has also pushed up rents. The Affordable Care Act is also expected to help many seniors to access specialized care facilities.

Seeking Senior-Friendly Housing

As financial security and physical and cognitive abilities decrease with age, affordable, accessible and well-located housing becomes of utmost importance. Although quality of life in old age continues to improve, the increase in life expectancy also means that the number of adults living with some form of disability will also grow, at a time when most of the existing housing stock is ill equipped to cater to these needs. This birthed the universal design movement that aims to make built environments accessible and safe to individuals of all ages and abilities and allow for aging in place.

According to JCHS, the five most important features of universal design are no-step entries, single floor living, extra-wide hallways and doors that allow for wheelchair access, switches and outlets reachable at any height and lever-style door and faucet handles. Only 57 percent of the existing housing stock incorporates at least two of these features.

Although multifamily units built after 2000 are significantly more accessible than pre-1940 housing, most still lack the universal design quintuplet. For example, only one in five feature lever handles and only one in six has extra wide hallways and doors.

Most adults over the age of 50 live in single family homes they own. Only a little over 60 percent of senior renter households live in in multifamily units, half of which are located in communities with upwards of 10 units. Only two percent of older adults live in group homes such as skilled nursing facilities. And modifying single family homes with a steep pricetag. According to a 2010 report by MetLife Mature Market Institute, widening one door will cost between $800 and $1,000, while installing wheelchair ramps clocks in at $1,600 to $3,200.

How Government Can Help

According to JCHS, in fiscal 2013 Social Security and Medicare took up 41 percent of federal outlays. Historical housing unaffordability rates paired with the growing number of (low-income) seniors means these expenses will need to increase, to effectively provide housing assistance. Currently only two thirds of eligible renters over the age of 62 receive governmental rental aid.

To effectively and equitably house America’s seniors, more thought needs to be given to urban planning. Expanding mass transit and pedestrian walkways are critical for the mobility of seniors who cannot drive anymore – it also has the added benefit that Gen Y, the next great generation also has a preference for alternative transportation and walkability.

Federal, state and local governments need to ramp up efforts to expand housing options by encouraging and facilitating the development of diverse and flexible housing near services and amenities such as mass transit, parks and health centers. They should also support the development of mixed-income communities that are able to offers health and retail services along with housing, and encourage mixed-age, intergenerational housing and other creative, affordable solutions.