Saturday, January 18, 2014

When I Get Older, Losing My Hair . . . .

When I'm Sixty-four!
Baby boomers are facing a big, and I mean very big, problem during the next thirty years: a serious lack of housing. When we reach a certain age we tend to have difficulties with the usual issues of home maintenance and care. We all have to face the fact that we just can’t do a lot of the things we liked to do once upon a time. And now we're looking at the clock a lot more and the bucket list and the whole issue of stairs and darker rooms, and seeing the buttons of the remote, and your kids saying things like, "Why do you have the TV so loud?"

To most of us the biggest issues are health, mobility, safety, and money. The usual course for most of us is to age in place, assuming that stairs are not a problem, you can afford trustworthy in-house health professionals, maybe a maid or a cook, and once in a while a chauffeur. Most of us aren't blessed this way and the kids have their own families to deal with. And besides, your preference isn’t to have them take care of you anyway.

More than fifty years ago Del Web built the first of the Sun City retirement communities, they became the model on which hundreds of other like communities and senior/active adult villages were built. Due to changes in the federal laws which allowed legalized discrimination based on age, these communities have continued to age, like boomers, in place. Many of these communities are now old and dated, the houses show the wear and tear of time and the facilities are too costly to maintain. And the new recruits – the Boomers - are now looking for something different.

By 2050 the number of Americans over the age of 65 will double from 40 million to more than 80 million. This age group is now about one in eight; in 35 years it will be one in five. Every year more people live to past 85 and there are more over the age of one hundred than anytime in our history. Other countries, such as Japan, are even worse.

Where will you live when you "retire?" In your current home? In a high-end retirement community? In a subsidized senior housing project? With you kids? There will be serious consequences to your family, your finances, your health, if you make the wrong choice. The biggest problems, right now, are the lack of choices with respect to housing – the retiree's biggest cost. It will soon become a buyers market, those with money will determine the market.

Believe it or not, one positive out of all this is that if significant numbers of homes and apartments can be built for this Boomer market, large numbers of existing homes become available to the marketplace. This is definitely a trickle-up scenario. Each year millions of Boomer residents will sell and move – freeing up housing. The problem right now is where can they buy/rent/co-own and move?

The over 65 market is growing and their need for housing is growing. The opportunities are huge but the development community is slow to the table. This housing model is different; the Boomer customer is more demanding, is better educated, more experienced, and is wealthier. It's a market not understood to many in publicly traded development companies. We all need a place to be happy and grow old and our expectations are not currently being met by the marketplace. And besides not everyone wants to move to Florida or Arizona.

This niche of housing requires land near population centers, high quality construction, facilities, recreation, and above all experienced management. It also requires new financing/cost models that allow this market to protect their equity and preserve their dignity. This cadre's biggest fear is that they will have more years left than money. Development companies that can create quality projects with long term guaranteed benefits and security will be the winners. City and towns will have to find ways of adjusting their fee structures, zoning and approval procedures to help move the project forward. We will need millions of these units over the next ten years and they need to be started now.

Stay Tuned . . . . . . .

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