The “Silver Tsunami” is coming by 2030 and in some places, it has already begun. Americans born during and directly following the end of WWII, commonly referred to as Baby Boomers, represent the second largest age demographic group in the U.S. behind millennials. As this massive group moves toward retirement, it is signaling big changes for multi-family buildings of the future.
By the Numbers
There are an estimated 70K Americans turning 65 every week. By 2030, the number of Americans age 65 or older is going to climb above 75 million and over 83 million by 2050. For those in the multi-family sector, trying to meet the needs of this generation is going to take some new ways of thinking about multifamily housing.
Take for instance the fact that most people in this group are experiencing way more financial insecurity than their parents did at this stage in their lives. Most retirees will not have a pension to rely on but instead will depend largely on social security to survive – and some political moves in the works further threaten that safety net.
One survey conducted last year showed that approximately 60% of Boomers have little savings to cover any financial shortfalls, holding onto $10K in savings or less on average and about 30% have no savings to fall back on at all. Many are delaying retirement in an effort to try to quickly build up their own private safety net before they are forced to retire.
What it Means for Multi-family
Unlike the generations coming up behind Boomers, a lot of them have one thing going for them to help shore up gaps in their retirement income – many still own their own homes. Over the last several years, retirees and those approaching retirement age have been downsizing and putting the profits in the bank to help fund their retirement while opting to become long term renters instead of homeowners.
For those in the multi-family sector, there are clear opportunities to provide for this wave of Boomers looking for affordable housing options. One big change is going to be the blurring of the lines between senior care facilities, active adult communities, and assisted living.
Retirement homes of old made up of sterile, hospital-like rooms that signal the end of life for seniors who are still active have become a thing of the past. The types of multi-family options for Baby Boomers today are going to be loaded with amenities like:
· On-site or nearby health care facilities
· Age-in-place options from active to assisted living
· Health and wellness options like therapy pools and brain stimulation therapies
· Active adult activities like on-site golf courses, pool halls, and bars
Designed more like high-end luxury hotels and apartments, the future of multi-family housing is going to have to cater to a generation that will remain much more active for a lot longer than previous generations. Because of that, developers are targeting urban centers to build where seniors are not isolated from younger adults but rather share an active lifestyle outside of their senior communities as well as at home.
Nationally, multi-family units being built to provide for Boomers retiring en masse have increased by 6% since 2015. In California, the CalPERS state pension system has become an institutional investor in these future facilities along with some of the biggest real estate investment trusts in the country. Since Boomers are expected to age-in-place in these new facilities, builders will need to harness technology to allow for remote monitoring, automated services, and other tools to allow Boomers to stay in one place from retirement all the way until end of life care is needed.