Making senior housing affordable is the biggest challenge the sector faces, experts agreed at the Senior Living – What We Can Learn From The US Market briefing, organised by the Senior Housing and Healthcare Association (SHHA), which took place online this week on Real Asset Live.
“There’s a forgotten ‘middle’ in the US,” said Elizabeth White, founder, NUUAge Coliving. “Millions of Americans cannot afford market-rate senior housing, but they don’t qualify for government assistance. We’re facing a retirement income crisis, as people live longer lives but have smaller nest eggs.”
Many middle-class Americans find they cannot maintain their standard of living when they retire, and staying in their home can be unaffordable as well as being unsafe.
“Only 4% of US housing stock has age-friendly features that allow people to live at home safely, yet the largest household group in the US now is older people living alone, not families with children anymore,” said White.
The current situation leads to a double crisis, of affordability and of social isolation. White noticed that there are many co-living solutions for millennials, students and young professionals, but not for older adults.
“We thought that shared housing or co-living would allow seniors to spend less and to have company, addressing both the affordability and the loneliness issues,” she said. “If you can’t age at home, at least you can age in a community.”
Older residents have their own private space, like a bedroom, but they share communal spaces like a kitchen and sitting room, which encourages conversation.
Some innovative solutions are emerging. In Newton, Massachusetts, the Opus retirement village has successfully experimented with a new model: when they move in people agree they will engage in some activity, such as gardening.
By signing up to making an active contribution to the community, residents are brought together and at the same time costs are kept low.
“We need to be open to innovation and have a proactive, rather than a reactive approach to ensure people can live a better and fuller, as well as a longer, life,” said Jennifer Dixon, founder and CEO, JD Solutions Group. “Access to capital is crucial, so the more investors we can attract to this space the better.”
The situation is not very different in Europe, which also has a ‘forgotten middle’ as many older people face some kind of financial difficulty.
“In Europe, and especially in the UK, there has been a real focus on the top end of the market and there isn’t enough affordable product,” said Caryn Donahue, head of senior housing transactions, healthcare and senior living, Savills. “It’s a shift that still needs to happen.”
In the UK, some operators have shifted to shared ownership and the rental model. In Europe, some forms of co-living are emerging, but the US experience shows how difficult tackling this issue can be.
“The problem hasn’t been solved in the US, which is 20 years ahead of Europe, so clearly there’s a long way to go,” said Donahue. “So far there’s been a focus on development but now we need to activate communities.”
On both sides of the Atlantic Ocean what is needed is more awareness of the demographic challenge, at government, investor and community level, and more action on finding possible solutions.
“We should think more and more strategically about what’s coming,” said White. “Longevity is right up there with climate change as a major challenge.”