It has been nearly 25 years since the multifamily housing industry took notice of the demographic projections that showed what rapidly became known as America’s “age wave.”
Despite all the initial excitement, quite a few developers found out it was much harder to attract older adults than they first thought.
Now properties serving this group are hot once again, and the leading edge of the baby boom generation is approaching traditional retirement age. But how long will it be before large numbers of these boomers start to move into seniors housing, and how much has the industry learned about how to serve the needs of aging Americans? In my view, our industry still has a long way to go.
One of the most promising trends is the idea of encouraging the mixing of generations. This ties into the very old-fashioned notion of extended families. In a few projects, this involves tailoring the property and the services to grandparents caring for grandchildren. In a more mainstream model, we see an increasing number of older adult communities being developed adjacent to college campuses.
The idea of developments on or near college campuses reflects the long-overdue recognition that older adults want to live active, productive, fulfilling lives right up until their health begins to fail. And that means that recreational amenities, whether they’re as modest as shuffleboard or as expensive as an 18-hole golf course, won’t be enough to win their business.
Savvy developers are starting to realize that these people want to learn, and taking college courses is a long-awaited luxury of retirement. But take it one step further. Today’s older adults are just as likely to want to take up a second career teaching college as they are to enroll in a music or cooking class.
Developers are coming up with other innovations as well, and the investment community is backing them up with plenty of capital. In many cases, these developers are using the capital to buy up existing projects and turn them around. (See stories starting on page 28.)
Obviously, older adults are a potentially lucrative market. But a few developers are doing pioneering work on the other end of the economic spectrum. They are working to find ways to develop rental housing affordable to moderate-income households.
One of the leaders in this effort is David Hill, CEO of Kimball Hill Homes in Chicago. His firm is one of the nation’s largest builders of market-rate for-sale homes, but Hill believes the firm can make a profit and do something good for the communities it serves by appealing to households with a wide range of incomes, not just the upper end or the upper-middle tier.
It’s been several years since Hill started a subsidiary to build mixed-income housing, including two developments on the site of former public housing projects in Chicago. The jury is out on the economics of the deals, since the first one is still under construction. But Hill says sales of ownership units are proceeding nicely and that his pro formas look good. By next winter, he added, he thinks he will be able to show his fellow builders that he can indeed do well while doing good.
Hill is also working to get corporate America more involved in helping find solutions to the workforce housing problem by serving on the board of Homes for Working Families, a national nonprofit organization that works with business representatives, civic leaders, and policy makers on the affordable housing issue. The group recently highlighted four programs and 11 projects that are making a difference in the lives of teachers, firefighters, and other working families. The report, Solving America’s Shortage of Homes Working Families Can Afford: Fifteen Success Stories, can be found at www.homesforworkingfamilies.org.