I’ll never forget the day my aunt found my grandmother eating a handful of pills while watching her favorite show on television. She had thought they were M&Ms—the first sign that my grandma was living with dementia. My aunt knew then her move to an assisted living community was imminent. There was simply no way for her to go it alone.
Unfortunately, like so many Baby Boomers, my grandmother did not have a lot of savings. My aunt eventually sold her childhood home to help cover the costs of her care. It’s a story happening every day, all around the country. And it’s a crisis that is only going to increase as we approach the largest demographic shift in history; by 2035, 1 in 3 households will be headed by someone 65+, and the 80+ population will double to 24 million. In the past, many have focused on the overall lack of senior housing to be the major crisis facing our nation. But I’d argue the crisis isn’t just a lack of senior housing; it’s a lack of housing that people can actually afford.
According to A Place for Mom, the average cost nationally for a private assisted living facility is nearly $4,000/month. That cost rises to more than $6,000/month for private nursing home care. Compare those costs with the fact that almost half of adults ages 65+ make just enough to afford basic expenses. According to a study by the Joint Center for Housing Studies and Harvard University, nearly 40 percent of aging homeowners have less than $50,000 in savings, not including the value of their homes. At that rate, paying for a home health aide or assisted living care would exhaust their non-housing their savings within a year. Even more alarming: the typical older renter would exhaust their assets within just two months.
Earlier this year, the New York Times published a story noting quality housing opportunities are plentiful for older people at the highest end of the economic spectrum. But for both the middle class and lower class, it’s a whole different ballgame. Not surprisingly, developers and operators are more focused on high-value communities. The new trend is toward spa-like facilities that offer everything from on-site massage and pet therapy to personal beach access. Jimmy Buffett’s new Margaritaville community in Florida, for instance, comes at an investment price-tag of $1 billion. Unfortunately, this is not where most of our aging family members will be calling home.
Still, public housing is not a likely solution either. In Chicago, the waiting list for public senior housing is more than two years in some areas. In New York, it is more than four. In Philadelphia, the list capped with a waiting list of 104,000. At that rate, many prospective residents will pass away before their name makes it to the top of the waiting list.
So, what can we do? We need to demand better. As the New York Times article noted, we need a new paradigm for caring for our older generations. That means speaking up and demanding more of the following:
Lobby for More Affordable Housing
No new funding has been approved for housing unit construction under HUD Section 202 (support housing for the elderly) since 2011. The organization Leading Age is campaigning to increase Section 202, and to promise affordable housing to every older adult who needs it. Join their fight while also encouraging your local governments to create more tax credits for private investors willing and able to build low-income housing for our aging.
Make Affordable Housing Part of Your Investment Portfolio
Not surprisingly, most facility operators and developers are focusing on building high-end private-pay facilities because that is where the money is. We need to pressure these companies to add affordable housing to their project lists. How? If you have money invested in a REIT or private equity fund focused on senior housing, talk to your fund manager about making affordable housing a part of the portfolio. We need to send a message that investing in senior housing is not just about making money—it’s about making housing accessible for those we love.
Bring Housing to More Livable Markets
According to A Place for Mom, the average cost of a one-bedroom unit in an urban assisted living facility is 15 percent+ more than non-urban areas. Yet developers and operators often focus on primary markets, which are more expensive to rent than secondary and tertiary ones. Dan Brewer, chief fund manager at Senior Living Fund, says these smaller markets tend to perform as well or better than primary markets in terms of investment potential because it’s harder for these communities to find financing. Therefore, there is still tremendous need—and opportunity for operators and developers—to create quality, low-cost housing in these more livable areas.
Get Creative in Your Community
Studies show one of the most important parts of preserving longevity to keep our social lives healthy. One of the best ways to do that is to find creative ways to link our lives with others, such as allowing older homeowners to house local college students, create their own mini-retirement village with friends, or offer their available living space to single parents or other families in need.
Focus on Accessibility
Aging 2.0 has brought a new era of tech awareness to the growing longevity economy. But we need to do even more. We need to invest in creating apps with larger type and louder notifications so our aging family members can call for help or assistance more easily. We also need more apps that will help those with disabilities get the services they need—from meal delivery to compassionate listening services to a simple breath of fresh air. The longevity economy holds tremendous potential—our venture capitalists and angel investors need to take advantage of it.
The crisis in affordable housing is not one that can be fixed by new construction alone. To truly help reduce housing insecurity, we need to focus on building housing that is affordable, accessible, and available when people need it. We need to look past potential profits to see the full end-game. After all, we are all the aging population. We need to treat our older community members exactly as we would want to treat ourselves.