Addressing the Needs of Middle-Income Seniors


To build long-term, sustainable businesses, home builders and developers need to forecast the future of our industry. And nothing is more important for that than understanding population trends, especially for seniors.

One thing we know is that the number of seniors in the United States is growing dramatically. According to the Population Reference Bureau, an estimated 47 million Americans are over the age of 65. That is expected to double to 100 million in the coming decades, with particularly high growth in the 75-85 age group by 2029.

So how does our industry provide the kind of housing this population wants and needs?

On one hand, high-income seniors have done well; the recent Survey of Consumer Finances by the Federal Reserve indicates that the average total assets among retirees has doubled from 1989 to 2016. Those seniors have many housing choices. On the other hand, for very low-income seniors, substantial government programs such as Section 8 and Medicaid are available to support decent housing choices.

But there is a group of seniors who don't fall under either of those categories; they constitute the "missing middle" of seniors. They have too much income to qualify for public assistance, but they are not affluent enough to access different housing choices or personal services.

Fortunately, new research into the "missing middle" is shedding light onto this important and growing group, including:

  • "The Forgotten Middle: Many Middle-Income Seniors Will Have Insufficient Resources for Housing and Health Care," a report from nonpartisan, objective research organization NORC at the University of Chicago
  • "What Can Be Done to Better Support Older Adults to Age Successfully in their Homes and Communities," a study issued by the Harvard Joint Center for Housing Studies

According to the NORC report, as of 2014, there were 5.57 million middle-income seniors aged 75-84, and that is projected to almost double to 10.81 million by 2029. With advancing age comes increased health limitations, and NORC estimates that 60% of middle-income seniors will face mobility restrictions, and 20% will have "high health care and functional needs."

NORC calculates that average income must be $62,000 per year for seniors to afford normal assisted living and medical out-of-pocket spending. More than half (54%) of seniors will have annual financial resources of $60,000 or less. So these seniors effectively can't afford assisted living or live-in care, and they have no access to public resources. It's a huge gap. And many seniors can't easily rely on family for help.

The important takeaway of the Harvard report is that when it comes to well-being, housing is critical, but it must be considered in the context of integrated services, the variety and the breadth of which is tailored to the individual's needs, from either public or private sources. According to the study, "policies are needed to provide the financial and advisory supports to modify homes, provide supportive services in the home and community, and maintain social connections, and support caregivers."

So how do we take care of our middle-income seniors, so that they can live their remaining days with dignity and good health? The answer lies in a multifaceted approach that includes both new and existing housing choices combined with services, which will depend on public/private partnerships that are innovative and entrepreneurial.

The first thing we should do as builders is to find ways to produce decent housing that middle-income seniors can afford, whether for sale or rental. In order to start making progress in this area, we need to:

  • Find land somehow that is reasonably priced and near some public services, such as senior centers and shopping.
  • Work with local officials to speed the entitlement process for this kind of housing. After all, age-restricted communities are not a burden on school systems, and they generate significant property tax revenue.
  • Find ways to bring construction costs down, whether by architecture that emphasizes very simple rooflines and layouts, or via innovations such as panelization or modular manufacturing.

When it comes to layouts and interiors, single-floor living is a must, as are elevators for multifamily, and if possible, in-unit washers and dryers. Other key features include:

  • Wide doorways and turnarounds
  • Easy access, and if possible, no threshold
  • Smaller overall dwelling sizes
  • Solid but basic finishes
  • Good value appliances
  • Garages if at all possible, especially in cold weather climates

But as noted by the Harvard study, a community needs more than solid buildings and must also include additional support for seniors at an affordable price. We must find a way to work with different organizations and create win-win scenarios to keep costs down.

This demographic "storm" rolling in for middle-income seniors will hit our shores in the next 10 years. How we as builders work with public and private resources will determine if can we navigate this turbulence, and if we can help our seniors live lives of dignity and health.

The full article, written by Gary Campbell, originally appeared in 55+ Housing Magazine.

Gary Campbell is chief executive officer of Gilbert Campbell Real Estate and oversees the management and development of 2,000 units of apartments in New Hampshire and Massachusetts. He has served on the NAHB 55+ Council Board of Trustees, and recently finished a term as chair of the NAHB’s Multifamily Council Board of Trustees.

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