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Senior living operators are building new models geared toward meeting the needs of the baby boomers. If they don’t succeed, the boomers may build those models for themselves.
Last weekend, I read an interesting Wall Street Journal article detailing the ways aging boomers are creating their own destinies with regard to housing. Limited in what they can afford, some boomers in their 60s and 70s are pooling their resources and creating their own senior housing.
That is itself not a new trend, and many older Americans have had the concept of senior cohousing on their minds for decades; one need only consider how “The Golden Girls” depicted older women living together under one roof in the 1980s.
The Wall Street Journal article details stories like that of David and Susan Burwen, who created Mountain View Cohousing Community, a housing complex in California with 19 resident-owned homes and space for dining in groups, exercise, entertainment and crafts. Residents of the community include older adults and younger people, who support one another by serving on volunteer teams handling duties ranging from community culture and social activities to legal and marketing work.
Senior Housing News has in recent years covered the potential threats and opportunities of such models as they’ve simmered in the background and attracted niche audiences. But as the baby boomers grow older, I think more of them will flock to these concepts, especially if the senior living industry fails to create what they want, particularly with regard to middle-market models.
Some operators are using that trend to their advantage. Earlier this week, SHN reporter Andrew Christman detailed how Kendal Corp.’s new “affiliate in development,” Humboldt Commons in McKinleyville, California, is meeting needs for resident-led senior living concepts. The community is unique in that its genesis lies not with Kendal leadership but with a grassroots group of residents who are helping to plan the community, including even by raising funds for it.
In this members-only SHN+ Update, I analyze the Wall Street Journal article and recent Senior Housing News interviews and reporting to bring you the following takeaways:
- Why the boomers are creating their own senior housing communities
- How some senior living operators are putting residents first in operations and growth
- A glimpse into the future of senior living if the boomers can’t find what they want
Boomers building what they want
If senior living operators don’t create communities that boomers can live in, the boomers will try to build it for themselves.
The Burwens’ journey to building a cohousing community started about 20 years ago when they were new empty-nesters. They spent almost a decade looking for land in California’s Silicon Valley, and along the way attracted resident members and even an architect. Construction wrapped up in 2014, and today the community stands as a testament to their vision with 19 homes and about 6,000 square feet of shared indoor and outdoor common space.
Now, the Burwens are in their 80s and setting off to coach other similar groups how to build their own cohousing communities.
“What we did can and is being done around the country,” David Burwen told the Wall Street Journal.
The Burwens’ tale is not exactly unique, and one can find similar stories of baby boomers across the country creating their own retirement communities stretching back a decade or more. It’s almost common knowledge in senior living that the baby boomers desire independence, freedom of choice and a community that’s as close to a perfect fit as possible. And that’s why I think this trend will only continue, and in fact accelerate, if boomers don’t find what they’re looking for in the years to come.
I see two big forces continuing to shape the boomers’ desires. The first and probably biggest to me is affordability, for the simple fact that one can’t move into a community they can’t afford. To that end, there are still millions of older adults who will likely want or need senior living services but won’t have a way to afford it by 2033.
The Wall Street Journal story detailed how one older adult was forced to move when she couldn’t afford a $1,000 monthly HOA fee. Another man in his early 80s had to sell his home after his wife died and couldn’t afford his $3,000 monthly expenses. I think those kinds of stories will become even more common in the coming years.
The other big force driving boomers to create their own senior housing is choice. Entire industries practically moved mountains to accommodate the whims of the baby boomers, and I think the generation will expect similar attention in the future. Whereas yesterday’s senior living was group activities and batch cooking, tomorrow’s senior living will be niche programming and more custom-made spaces.
To their credit, multiple senior living companies and organizations seem to have embraced this lesson in their operations and growth plans.
For example, Kendal Corporation is moving ahead with a new “affiliate in development” in McKinleyville, California, with initial planning led not by Kendal but by the community’s prospective residents. A group called Life Plan Humboldt that organized around the community’s opening and even raised $3.2 million for it is now partnering with Kendal to develop and launch the affiliate community.
Many of Kendal’s previous communities came together under similar arrangements in the 1990s, and the growth strategy is a return to the organization’s roots.
“A lot of the Kendals were developed because there was a local community that wanted to age in place,” Vassar Byrd, Kendal CEO, told SHN. “It’s been a decade or two since we have been able to partner with a local grassroots organization that has that same goal.”
In a similar vein, operators such as Benchmark Senior Living, The Aspenwood Company and Mather are adopting a “yes, and” attitude in resident engagement by organizing activities informed by their preferences. Not long ago, senior living operators tried to get as many similar residents into one room for more efficient activities. Now, they are encouraging residents to gather in smaller groups with a more narrow focus on smaller “micro” activities.
“More ideas in programming equals more good ideas for our organization and the people we serve,” Mather Assistant Vice President of Resident Engagement Caroline Edasis said during a Senior Housing News webinar earlier this month.
In a world where boomers’ niche desires drive their senior housing choices, I think these are sound approaches at building something they will want. Of course, building niche communities and “micro” activities at scale is its own challenge, but it’s something that I believe more operators should explore as they embark on new development projects in the years to come.
A glimpse at a possible future
Just recently, I heard from a senior living operator in Portland, Oregon, RoseVilla, that has a current waitlist of as much as 30 years for new residents. Simply put, I don’t think the boomers will be willing to wait that long for senior living.
Instead, I think they will follow in the footsteps of the Burwens and other older adults who are finding creative ways to age in place without the help of a senior living provider, and in some cases actually building what they want. I agree with Byrd that if the boomers can’t afford senior living or find something they want in existing communities, the industry risks being “disrupted by the outside.”
I also would not be surprised if baby boomers embraced more communities like that of Austin, Texas-based Kindred Uncommon, a company moving forward with a model to build “residential pockets of homes, clustered around beautiful shared spaces.” That is, if such communities get built: high interest rates stymied Kindred Uncommon’s planned construction last year, according to Texas-based publication Community Impact.
RoseVilla is tackling its waitlist by turning prospective residents into members. Last year, the community launched TakeRoot, “a new model that replaces passive waiting with real-time engagement.”
The program offers three tiers under which residents can make a deposit toward their future stay of $3,000, $6,000 or as much as $90,000. The tiers range in services from information and planning resources on the low end to full access to RoseVilla’s 22-acre campus and wellbeing programming and coaching at the high end.
Although I haven’t spoken with RoseVilla leadership about its TakeRoot initiative, I believe the program is aimed at engaging the boomers before they would otherwise find something for themselves. I can see the appeal of using a community for years before actually moving in, and I think boomers will especially value operators that can make them feel like part of a larger group.
Bottom line, I think the industry will have to lean on these and other kinds of models as senior living companies struggle to grow in the meantime, or risk being disrupted from the outside, potentially from their own prospective residents.
