Baby boomers’ constantly changing demands are affecting the formation, location, and types of living communities for seniors in the United States, and a number of trends are already identifiable. For most seniors, independent living tops their list of choices. For those wanting to stay in their homes and age in place, programs are emerging to help link older residents with everything from rides to doctor’s appointments and grocery stores to home repair services, exercise classes, lectures, and cultural activities. A large share of baby boomers—76 percent—intends to keep working after retirement.
Independent living facilities that provide amenities, mobility, and the freedom to maintain an active lifestyle are also an attractive alternative, and a number are being developed all over the country. Hang gliding, skydiving, whitewater rafting, hot air ballooning, skiing, and parachuting are some of the activities being offered. The broad range of tech amenities to meet the expectations of this new tech-savvy generation may include wireless internet access, computer labs with interesting software, and internet cafés. More mobility and affluence are translating into longer life spans and healthier lives in which aging is simply becoming a change in lifestyle.
Florida is no longer the sole destination of choice for seniors. The Carolinas and even Latin America, with their moderate climate and affordable housing, are attracting boomers, while some retirees are moving into downtowns to partake of cultural offerings and a walkable lifestyle.
Cohousing communities, where residents own their own apartment or townhouse and a portion of common areas—including a kitchen, dining and living rooms, and possibly a housekeeper’s apartment—are increasing in popularity as well. Residents share chores, maintenance expenses, and even the cost of a nurse, if needed, in order to take advantage of the opportunity to continue meaningful friendships.
A number of universities and colleges are introducing housing for seniors on campus. University retirement programs emphasize lifelong learning, personal growth, and the benefits of an intergenerational community.
Other trends on the horizon include sustainable and universal design, and at-home services such as tele-caregiving, video monitoring, fall-detection alerts, memory care, web-based education, and virtual villages.
Construction of new seniors’ living projects will start to accelerate during the second half of this year. Increased demand and limited supply also will start to drive seniors’ housing prices up in 2011. The economics of the seniors’ housing solution will continue to expand the notion of multigenerational and small group housing in the coming year. For seniors on fixed incomes, the choices of venue for housing will become crucial.
ULI’s Senior Housing Council members interviewed note that most of the money in this industry is being spent on acquisitions now, but that banks are starting to get back into the lending business. Whereas before, banks were probably lending 65 to 75 percent loan-to-cost, now they can quote loans that are 55 percent loan-to-cost. Also, partnerships with health care–oriented real estate investment trusts (REITs) are setting a new model for financing of housing assets.
For small- and medium-sized operators, government funding is still the cheapest and most attractive source of debt capital in the seniors’ housing market. The role of government financing will take on greater importance this year with the changes rolled out in the Section 202 reform bill passed at the end of last year. The U.S. Department of Housing and Urban Development (HUD) and other federal agencies will continue to pump funding into local organizations that will drive services and offerings to help local markets bloom. Above all, seniors’ housing REITs have consistently been able to get access to the capital markets needed to fuel transactions in the billions of dollars in seniors’ housing this year.