As Boomers Age, Developers Ramp Up for ‘Gray Tsunami’
With all baby boomers reaching age 65 or older by 2030, new housing models are emerging.
Baby boomers have influenced trends for more than seven decades and continue to do so as more enter their senior years. And the impact is significant when it comes to senior living communities.
Born from 1946 to 1964, the oldest of the post-World War II generation is now estimated at about 73 million people in the U.S., with the oldest boomers turning 76 this year, according to the U.S. Census Bureau.
Knowing how many boomers there are — and where they’re located — is important as lawmakers decide how to spend money on public services. It’s also important for companies that develop senior living properties and facility operators to understand what’s ahead so they can plan for it.
But because of COVID-19-driven supply chain issues, labor shortages and rising cost of building materials, developers significantly slowed construction of senior living communities from 2020 to 2021. Seniors also left facilities in droves during the pandemic to avoid contracting the virus, which spreads rapidly in communal settings.
“We’ll start to see the impact of baby boomers in 2027 to 2028,” said John Sweeney Jr., leader of National Senior Housing at CBRE. “We do have some time to prepare for that. But if we don’t build for five or six years, it’s going to be a problem. Demand will ramp up in the latter part of this decade.”
In Colorado, it’s not just people getting older that’s impacting the number of seniors in the state. People moving here to be closer to their children also are driving the number of older adults up. Last year, the Front Range gained 28,000 new residents from in-migration, according to data from the Colorado State Demography office.
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While new senior living projects were on hiatus during the pandemic, developers are starting to ramp up construction. There are 10 projects in the works along Colorado’s Front Range, but challenges such as labor, material and financing costs continue to impact margins, said John Hauber, CEO of Haven Senior Investments.
“Haven Senior Investments continues to get calls from investors around the country inquiring about the senior housing market, and we’ve seen an uptick in the interest in the active adult development environment,” Hauber said. “Developers are adapting to the coming wave of aging baby boomers with a new crop of living developments. Capital providers also are waking up to the varied needs of this cohort.”
But as times change, so do the expectations and tastes of people looking for communities where they can comfortably age.
“Developers are experimenting with nontraditional models such as intergenerational communities. Everybody is trying to figure out the secret sauce — what the senior housing consumer wants now and in the future,” Hauber said. “Developers must design communities that cater to what boomers want. What we believe they want is a sense of community, activities and a feeling that they are living a purposeful life.”
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There are seven types of senior living facilities:
Independent living: Designed for seniors who want the benefits of a community while maintaining freedom.
Residential care homes: For people who don’t need 24-hour assistance but may need some help with daily activities such as transportation or medication distribution.
Respite services: Support for the caregiver whose family member wants to stay in their home.
Assisted living: Provides on-call staff, trained chefs and scheduled activities for people who need a little more help.
Memory care: Round-the-clock care in a safe and secure environment for people with dementia and Alzheimer’s disease.
Skilled nursing: Staffed with in-house nurses, doctors and other medical professionals to provide 24-hour medical care and a high level of assistance for people with medical conditions.
Retirement communities: Vary from age-restricted active adult communities to leisure communities that provide great amenities and social platforms.
The senior housing sector that’s seeing the most activity are active adult communities — a sort of hybrid between multifamily and senior housing.
The U.S. active adult (55+) community market was estimated at $565.3 billion in 2021 and is expected to reach $587.7 billion this year, according to Grand View Research. It’s anticipated it will expand at a compound annual growth rate of 4.01% between 2022 and 2032 because of the increasing demand from baby boomers, reduction in the stigma of retiring and growing interest of investors.
In general, new senior living facilities, whether they’re independent or assisted living, are more modern with higher ceilings and targeted amenities that seniors want, Sweeney said.
Those looking for a senior living community for either themselves or a loved one have a lot to sift through. Do they want independent or assisted living? Memory care or skilled nursing?
Hiring a company like Denver-based Colorado Senior Care Advisors to act as an advocate can help with navigating that process.
While the COVID-19 pandemic saw people pulling back from senior living facilities, Colorado Senior Care owner Rick Bloeman said the industry is bouncing back.
Colorado Senior Care Advisors meets with its clients to perform a physical evaluation and a need assessment, Bloeman said. Things like age, diseases or other vulnerabilities that must be taken care of over the next five to 10 years are part of the equation.
The company also conducts continual evaluations of the communities in metro Denver to provide its clients with the most recent information available. Factors it considers include location, cost, levels of care available, cleanliness, amenities and activities, medical care and caregiver/patient ratios.
“We look at staffing and the health care — you’re going in there for the care,” Bloeman said. “If you have one person trying to take care of 15 to 20 people at night and two need to go to the bathroom at the same time, what are you going to do? People are paying for the help, but they can’t get the care they need.
“Any place can have a beautiful chandelier, but what’s behind the curtains is what counts.”
Caregivers’ compensation and turnover both for caregivers and executive directors should be taken into consideration when evaluating a senior living facility, whether it’s memory care or independent or assisted living.
“The health care is the most important piece of the puzzle,” said Bloeman, who started the company 12 years ago because his sister needed help and he was frustrated with the system.
For some seniors, moving into a retirement community is an option. For others, home care is the solution. Either way, it’s expensive and needs to be part of everybody’s financial plan.
Jody Gastfriend, a principal with national health-care research and consulting firm Health Management Associates, said doing research about what’s available and ways to pay for it before you actually need to move into a senior community is a critical part of ensuring you or your family member is cared for in a stable environment.
“People need to plan ahead financially to pay for long-term care, whether it’s at-home care or in a senior living facility,” said Gastfriend. “Get long-term care insurance or apply for Medicaid or save for it. The sooner you learn about it, the better off you are.”