Seniors Make Moves to Beat the Rush for Retirement Housing

And here they come… The most senior boomers will celebrate their 80^th birthdays within a year.

Seniors typically move to retirement living in their mid-80s. Droves of seniors will soon approach that milestone. Can the current system of retirement living in the United States meet Boomer Capacity?

The short answer: No. So here’s what seniors are doing.

Planning Ahead for Off-the-Charts Demand

Senior housing units include active adult housing, independent living, assisted living, and memory care. All of these are in high demand. In the next few years, demand will be off the charts. Today, about 15 million people in the United States are over 80. In just five years, that number will be nearly 19 million.

Given the space still available in senior living communities right now, we’ll need more than a half-million new senior-housing units. At the current rate, not even half that many will be produced.

The upshot? Savvy seniors are putting deposits down before they actually need retirement living. Sites that accept insurance are, of course, the most appealing to many who cannot pay out-of-pocket for the increasingly expensive rates charged by senior-living companies.

Those who “miss out” on safe, financially feasible options when the time comes will mostly stay at home, with the assistance and psychological support of family members. In many families, this will place increasing expectations on adult children — whose own health can suffer on account of the stress.

And of course there’s also the cohort of solo seniors who don’t have kids to rely on in any case.

In-home assistance is a good middle option — but it only goes so far.

Why Senior Communities Can’t Be Created Fast Enough

Builders say this isn’t an easy time to create more senior-specific housing options. They point to:

• Currently elevated interest rates on any funding of projects. The interest rate on a construction loan is now double what it was in pre-pandemic times.

• Tariffs that impact the price of building materials and subcontractor companies. The lack of clarity on future tariffs is also a major factor stalling development.

• Deportations shrinking the size of the construction workforce. The effect makes it harder and more costly to find workers to build new sites or renovate what already exists.

The most expensive projects involve building from the ground up. Builders can work more cost-effectively by revamping and expanding their existing buildings. Indeed, some of these companies are buying up existing senior communities.

Consider Welltower Inc., a real-estate investment trust company. Already, Welltower owns more senior units across the country than any other company. In just the past five years, Welltower has spent above $20 billion to purchase more senior-living properties. Buying up existing senior communities is cheaper for the company than buying land and investing in new developments.

Where Are Seniors Looking Today?

Senior housing units are close to capacity in several major market regions. In highest demand are: Boston (91% filled up), Baltimore (same), and Cincinnati (same).

Across the country’s major metro areas, senior-specific housing under construction is lagging. Building projects are at their lowest level in more than a decade.

The country needs a surge in senior-specific construction. Hotel and office building conversions could help, and so could a focus on enhancing support in multigenerational communities. If the coming shortage is ignored, older adults will still have to find care somewhere. But where? The looming senior-housing shortage will force older adults to move to places they would have never expected to look. 

It might come as some surprise, but there’s more room for retirement living in sun belt cities now. Sites in Miami, Houston, and Atlanta are mostly under 85% full at the time of this writing.

While they study their long-term plans, where are boomers living now? What about over-55 communities or senior co-ops?