As baby boomers age, developers explore housing options for them

The pandemic has crushed the senior housing market, lowering occupancy rates and stalling construction. Now, as the market begins an uneven rally, developers are accommodating the next wave of aging baby boomers with a new generation of residential development.

Specialized housing for older Americans has been around for decades. But changing demographics are forcing the industry to diversify more quickly in terms of rates and services, leading to ever more luxurious residences for high-income Americans, as well as a growing number of affordable housing models.

For example, Trillium, a skyscraper under construction near Washington, boasts restaurants, a wellness spa, and other boutique-style amenities and finishes. And in the Boston area, Opus Newton, a more modest development, will rely on resident volunteers to help cut costs.

Developers are also experimenting with non-traditional models. In Loveland, Colo., Kallimos Communities is planning a multi-generational development with 100 subsidized rental homes clustered around shared green spaces and offering dining, arts and wellness opportunities.

The aging of more and more baby boomers — an estimated 65 million total — is creating “a big spike,” said Beth Mace, chief economist at the National Investment Center for Senior Housing and Care, a provider of data services to the eldercare industry. .

Other changes are reshaping housing, from pandemic-fueled safety concerns and labor shortages to trends favoring more personalized, community-based solutions. Housing for older Americans offers three general options: independent living, for active lifestyles; assisted living, which includes certain medical care; and memory care. (Nursing homes provide nursing care and are generally not included in the category of housing for the elderly.)

“Everyone is trying to figure out the secret ingredient: what the senior housing consumer wants,” Ms. Mace said. “Conclusion: you are going to see many options.”

The developers are banking on the fact that if they build enough variety, they will be able to appeal to the next generation of older Americans.

“We have to design communities that meet what boomers want, and that’s the difference between senior housing today and housing developed 10 or 20 years ago,” said Bobby Zeiller, vice president and co-CEO of Silverstone Senior Living, the developer behind the Trillium.

After focusing on suburban-style senior communities, Silverstone is expanding into urban settings, Zeiller said. The industry, he said, “is evolving very fast.”

The average occupancy rate for the 31 largest senior housing markets in the country was 81% in the first quarter of 2022, up from the low of 78% in the first quarter of 2021, but below the level prior to the pandemic 87% in 2020, Mace said. .

The numbers are beginning to climb in select markets, according to data from the National Investment Center. In Miami, for example, construction as part of inventory rose to 11 percent in the first quarter of 2022, the second highest level on record. But at the other end of the spectrum is Sacramento, where construction fell to about 1 percent, down from 17 percent in 2019.

Even before the pandemic, only about 11 percent of Americans over the age of 75 lived in senior housing. Strong preferences for aging in place are one reason for the low rate.

The high cost of housing is another factor, especially for the eight million middle-income Americans who don’t qualify for subsidies but can’t pay out of pocket. The national median monthly rate for assisted living was $4,300 in 2021, according to a survey by Genworth, an insurance company. And the average monthly cost of memory care is $7,277, according to the National Investment Center.

Luxury project developers are betting on larger units, sophisticated design and amenities, and a greater focus on social engagement and active living.

Coterie Cathedral Hill, a 208-unit development that opened in San Francisco in April, features five restaurants, an outdoor pool, and landscaped patios and terraces. Wellness staff receive training through Mayo Clinic, and an on-site care coordinator helps residents achieve a wide range of mental, emotional and physical health goals, including assistance with social and philanthropic goals.

Coterie, a joint venture between real estate developer Related Companies and Atria Senior Living, one of the nation’s largest providers of senior housing, targets affluent urbanites seeking “coherence between the lifestyle they they were used to when they lived in traditional high rise,” said Joanna Mansfield, general manager of Coterie Hudson Yards, a second development opening this fall in New York.

At Coterie Cathedral Hill, monthly rental rates range from $7,900 for a studio to $16,660 and up for two-bedroom residences.

A new wave of thrifty business models is targeting middle-income Americans. Opus Newton, for example, will require residents to volunteer 10 hours a week, giving them a greater sense of purpose and community while “significantly lowering overall staffing costs,” said Amy Schectman, president and CEO of 2Life Communities. , a non-profit organization that is developing the project.

Other cost savings include outsourcing of care and provision of discounted memberships at the nearby Jewish Community Center, eliminating the need for in-house recreational facilities.

Ms. Schectman expressed her confidence in the future of the collective life of the elderly, despite the persistent concerns about the pandemic.

“The coronavirus revealed a pandemic of loneliness and isolation,” he said. “Aging at home harms society by presenting the option of living with others as a failure. We are creatures of community.”

Initial costs for Opus Newton’s 174 units start at $391,000, a fee many residents will pay when selling their homes.

Repurposing existing buildings is the key to solving the mid-market challenge, said Fee Stubblefield, CEO of The Springs Living, a developer in Portland, Oregon, with 18 properties serving seniors across the income spectrum.

The Springs Living has two luxury skyscrapers under construction, one on the Columbia River in Vancouver, Washington. The properties will include firebreaks to cordon off floors in the event of a disease outbreak, and will be certified to meet new health and wellness standards. Design and operating standards.

Starting rents on new buildings range from $3,700 to $10,000 per month.

There are two types of senior housing residents, Stubblefield said: those who want to live there and those who have to. Those who want to live for seniors are “a big part of our society,” she said. “The social and welfare component is not built for that population.”

The labor shortage adds to the economic challenges facing senior housing developers. Long-term care employment decreased 6.7 percent from February 2020 to December 2021, according to a recent analysis of data from the Bureau of Labor Statistics.

“Workforce stability is the single most important factor in the future of senior housing and service,” said Mr. Stubblefield, adding that operators have an “obligation” to create career paths for senior staff. initial level that supports the industry.

Bill Thomas, co-founder of Kallimos Communities, offers another solution to the many challenges surrounding the future of aging and retirement in America. “The best thing you can have to help you stay independent is good neighbors,” he said.

Kallimos First Community, a partnership with the Loveland Housing Authority, is rooted in the idea that older Americans can be supported in homes designed for seniors living in community-oriented, mixed-age neighborhoods.

“The young and the old have been living together and supporting each other for many millennia,” said Mr. Thomas. “The idea that we have entered a dead end of history where young people see no merit in being around older people is simply wrong.”

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