The pandemic has crushed the luxury housing market, slashing occupancy rates and stalling construction. Now, as the market begins to recover unevenly, developers are adapting to the upcoming wave of baby boomers with a burst of new life developments.
Specialized housing for older Americans has been around for decades. But demographic shifts are forcing the industry to diversify more rapidly in rates and services, bringing increasingly lavish accommodations to high-income Americans and a growing number of models. affordable housing.
For example, the Trillium, a high-rise under construction 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 keep costs down.
Developers are also experimenting with non-traditional models. In Loveland, Colo., Kallimos Communities is planning a multi-generational development with 100 subsidized rental homes centered around communal green spaces and providing dining, arts and wellness opportunities .
“The aging of more and more baby boomers (estimated at 65 million people) is creating,” said Beth Mace, chief economist at the National Investment Center for Aged Care & Housing. “a big surge”. .
Other changes are reshaping housing, from safety concerns caused by the pandemic and labor shortages to a preference for more personalized and community-based solutions. Housing for older Americans offers three general options: independent living, for an active lifestyle; assisted living, including some medical care; and memory care. (Nursing homes provide nursing care and are not usually part of the elderly housing category.)
“People are trying to find the secret sauce – what luxury housing consumers want,” Ms. Mace said. “Bottom line: You’ll see a lot of options.”
The developers are convinced that if they build enough diversity, they will be able to appeal to the next generation of older Americans.
“We had to design communities that cater to what boomers want, and that’s different,” said Bobby Zeiller, vice president and co-CEO of Silverstone Senior Living, the developer behind. Distinguish between luxury housing today and housing developed 10 or 20 years ago. Trillium.
After focusing on suburban-style upscale communities, Silverstone is expanding into urban environments, Mr. Zeiller said. The industry is “growing very fast,” he said.
The average occupancy rate of the nation’s 31 largest luxury housing markets was 81% in the first quarter of 2022, up from a low of 78% in the first quarter of 2021 but below pre-pandemic levels of 87 % in 2020, Ms. Mace said.
According to data from the National Investment Center, the numbers are starting to rise in select markets. In Miami, for example, construction inventory’s share amounted to 11% in the first quarter of 2022, the second-highest ever. But at the other end of the spectrum is Sacramento, where construction is down about 1%, down from 17% in 2019.
Even before the pandemic, only about 11 percent of Americans over the age of 75 lived in seniors’ housing. The strong preference for spot aging is one explanation for this low rate.
High housing costs are also another factor, especially for the eight million middle-income Americans who don’t qualify for benefits but can’t afford it out of pocket. Follow a survey by Genworth, an insurance company. And the average monthly memory care cost is $7,277, according to the National Investment Centre.
Developers of luxury projects are betting on larger units, sophisticated design and amenities, and a strong focus on social interaction and active living.
Coterie Cathedral Hill, a 208-apartment project that opened in San Francisco in April, features five restaurants, an outdoor swimming pool, and landscaped courtyards and terraces. Healthcare staff trained through the Mayo Clinic and on-site care coordinators help residents meet a variety of mental, emotional, and physical health goals, including supporting social goals and charity.
A joint venture between property developer Related Company and Atria Senior Living, one of the nation’s largest providers of luxury living, Coterie focuses on affluent urban dwellers who looking for “consistency between the lifestyles they are used to living in a traditional upscale area Joanna Mansfield, general manager of Coterie Hudson Yards, a second project opening this fall in New York for know.
At Coterie Cathedral Hill, monthly rents range from $7,900 for a studio to $16,660 and higher for a two-bedroom apartment.
A series of new thrift business models focused on middle-income Americans. Opus Newton, for example, will ask residents to volunteer 10 hours a week, giving them a stronger sense of purpose and community while “dramatically reducing staff costs,” said Amy Schectman, president and chief executive officer of 2Life Communities, a nonprofit organization. project is developing.
Other cost savings include outsourcing care and offering discounted membership services at the nearby Jewish Community Center, eliminating the need for indoor recreational facilities.
Ms. Schectman expressed confidence in the future of senior community life, despite lingering concerns about the pandemic.
“Coronavirus has revealed an epidemic of loneliness and isolation,” she said. “Aging in place harms society by presenting the choice to live with others as a failure. We are creatures of the community. “
Upfront costs for 174 Opus Newton units start at $391,000, a fee many residents will pay when selling their home.
Replacing existing buildings is key to solving the mid-market challenge, said Fee Stubblefield, chief executive officer of The Springs Living, a developer in Portland, Ore..
Springs Living has two luxury projects under construction, including a high-rise on the Columbia River in Vancouver, Wash. The assets will include firewalls to force floors in the event of an outbreak, and they will be certified to meet the new health and health standards related to design and operation.
Starting rents in new buildings range from $3,700 to $10,000 per month.
There are two types of senior housing residents, Mr. Stubblefield said: those who want to live there and those who are forced to. Those who want the high life are “a big part of our society,” he said. “The social and health composition has not been properly constructed for that population.”
Labor shortages add to the economic challenges facing luxury housing developers. Employment in the long-term care sector fell 6.7% from February 2020 to December 2021, according to a report recent analysis data from the Bureau of Labor Statistics.
“Workforce stability is the most important factor in the future of housing and services for older adults,” said Mr. Stubblefield, adding that operators have an “obligation.” creating career paths for senior employees who sustain the industry.
Bill Thomas, co-founder of Kallimos Communities, offers another solution to the various challenges associated with the future of aging and retirement in the United States. “The best thing you can have to help you live independently is damn good neighbors,” he said.
The first Kallimos community, a partnership with the Loveland Housing Authority, was rooted in the idea that elderly Americans could be supported in homes designed for seniors living in neighborhoods. community-oriented mixed-age residence.
“Young people and older people have lived together and supported each other for millennia,” said Mr. Thomas. “The idea that we’ve strayed into a late period of history where young people don’t see any benefit in being around older people is just plain wrong.”
