The Silver Economy: Downsizers transform US housing landscape
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Phoenix, Arizona, is at the heart of efforts to address the US’s demographic time-bomb.
Three years ago the third-largest US housebuilder, Lennar Corporation, chose Phoenix to launch its new line of multigenerational housing – a product that aims to exploit the shift from nuclear families to a form of shared living that was more the norm 100 years ago.
Lennar’s Next Gen home includes a built-in apartment, designed to allow members of the wider family to live alongside but semi-independently. By far the biggest buyers of the 2,000 Next Gen homes sold to date have been families with grandparents who are still active but want to be closer together, according to Lennar regional president Jeff Roos.
Next Gen is being chosen by about 40 per cent of buyers on the sites where it is being offered as an option, Mr Roos says.
“It really makes sense for people who are either doubling up their households [with their children] or haven’t yet retired,” he says. “The grandparents can downsize and have a much closer relationship with their grandchildren.”
Next Gen is the latest innovation from major US housebuilders that have already built up a substantial customer base of older people through what they dub “active adult” communities – traditionally designed houses with lower age limits on who can buy them, and surrounded by leisure facilities such as golf clubs and restaurants.
US companies such as Lennar and PulteGroup have pioneered these lifestyle-oriented new housing developments aimed at an ageing but fit and active demographic.
This is the part of the housing market that has bounced back most strongly since the financial crisis, according to Sharon Dworkin Bell, a senior vice-president at the US National Association of Home Builders. “Since the start of the year it has really taken off,” she said. “Builders working in this section of the market have never been so busy.”
The message is beginning to percolate through to large-scale housebuilders in other parts of the world that are changing their focus in response, shifting away from young home buyers and towards the older market.
In Britain, Barratt Homes and McCarthy & Stone are both developing new products to target downsizing baby boomers, while New Zealand market leader Ryman Healthcare is expanding its active retirement villages concept into Australia.
“The ‘younger older’ age group of people in their 60s are looking for more freedom to enjoy their leisure years,” says Gary Day, land and planning director at McCarthy & Stone. “It’s a great business opportunity to capture a market that we know is there waiting for us.”
Established builders also face competition from leisure providers, which are seeking to expand into the lifestyle and health end of the older people’s housing market.
For example Japan’s biggest holiday club group, Resorttrust, is adding senior living areas to its developments.
It has launched 500 rooms so far and aims to expand to 2,500 units with a “high-end, hotel-like living environment” for healthy people, and “back-up provided by the group’s healthcare network” for nursing care.
Like other developers Resorttrust is just following the market. Between 2000 and 2050 the number of people in the prime house-buying age group of 20-40 years old is set to fall across developed nations by 4 per cent to 330m, according to OECD forecasts. Meanwhile the number of people aged 60 and over is set to increase by nearly two-thirds, topping 381m.
They will be healthier than any senior cohort before them: more than three-quarters of US citizens aged 65 and over rate their health as either good or excellent, according to figures from the US Department of Health & Human Services. And at age 85 and over, two-thirds of people still report being in good health.
Today’s retirees can expect – with average luck – two decades of life ahead of them. For those who are fit, well and quite possibly still working, the thought of a traditional retirement community may not appeal. But neither does the thought of having to move house each time your health deteriorates, or your support needs increase.
As technology evolves and building design becomes more sophisticated, senior living developers are finding that the answer lies in adaptable homes. As a result specialist housebuilders are creating buildings that a fit, healthy 60-something can stay in for the rest of their lives.
One of the world’s largest senior living providers is Brookdale Senior Living, in the US. Brookdale offers its customers a flexible menu of support options and nursing care, helping people to stay either in their own home or in the same community as they age.
Earlier this year Brookdale announced it was to merge with rival company Emeritus. The reason? It cited opportunities in this “age in place” market as a key rationale.
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