What baby boomers want (options!), senior housing delivers
What baby boomers want (options!), senior housing delivers
The pandemic crushed the senior housing market, cutting occupancy rates and stalling construction. Now, as the market begins an uneven rebound, developers are adapting to the coming wave of aging baby boomers with a new crop of living developments.
Specialized housing for older Americans has been around for decades. But shifting demographics are forcing the industry to diversify more rapidly across rates and services, yielding increasingly lavish residences for upper-income Americans as well as a growing number of affordable housing models.
For example, Trillium, a high-rise under construction in Northern Virginia near Washington, features restaurants, a wellness spa and other boutique-hotel-style amenities and finishes. And in the Boston area, Opus Newton, a more modest development, will rely on resident volunteers to help reduce costs.
Developers are also experimenting with nontraditional models. In Loveland, Colorado, Kallimos Communities plans a multigenerational development featuring 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 in total) is creating “a big surge,” said Beth Mace, chief economist for the National Investment Center for Seniors Housing & Care, a data service provider for the elder care industry.
Other changes are reshaping housing, from pandemic-fueled safety concerns and labor shortages to trends favoring more personalized and community-based solutions. Housing for older Americans offers three general options: independent living, for active lifestyles; assisted living, which includes some medical care; and memory care. (Nursing homes provide nursing care and typically do not fall under the category of senior housing.)
“Everybody is trying to figure out the secret sauce — what the senior housing consumer wants,” Mace said. “Bottom line: You’re going to see a lot of options.”
Developers are banking on the fact that if they build enough variety, they will be able to draw the next generation of aging Americans.
“We have to design communities that cater to what boomers want, and that’s a difference between senior housing today and housing developed 10 or 20 years ago,” said Bobby Zeiller, vice chair and co-CEO of Silverstone Senior Living, the developer behind the Trillium.
After focusing on suburban-style senior communities, Silverstone is expanding into urban environments, Zeiller said. The industry, he said, “is evolving very fast.”
The average occupancy rate for the nation’s 31 largest senior housing markets was 81% in the first quarter of 2022, up from a low of 78% in the first quarter of 2021 but below the pre-pandemic level of 87% in 2020, Mace said.
The numbers are starting to tick up in select markets, according to data from the National Investment Center. In Miami, for example, construction as a share of inventory amounted to 11% in the first quarter of 2022, the second-highest level ever. But at the other end of the spectrum is Sacramento, California, where construction fell to about 1%, down from 17% in 2019.
