Aging populations, housing, and related economic opportunities

International research reveals some fundamental similarities in issues surrounding aging populations  and housing, including: 

1)  most older people want to age in place;

2) many aging residents would  prefer lower maintenance (and smaller, one-story) housing than their current dwelling requires;

3) as they age, people become less mobile and more dependent on walking and public transportation  to connect with their community; and

4) homebuilders tend to be conservative and replicate  existing designs unless they are incentified to change.

Researchers in Portugal and Spain can build  upon existing knowledge to address important elderly housing issues in the region. The overarching  issue is how to provide housing within the community that enables aging residents to enjoy a high  quality of life.

La cuestión general es cómo proporcionar una vivienda dentro de la comunidad que permita a los residentes de edad avanzada disfrutar de una alta calidad de vida.

 We know that elderly residents generally would like low maintenance houses, but  beyond that elderly consumers are just as heterogeneous as younger residents, so one key issue is to  understand diverse elderly housing needs and preferences.

Los consumidores de edad avanzada son tan heterogéneos como los residentes más jóvenes, por lo que una cuestión clave es comprender las diversas necesidades y preferencias de los mayores en materia de vivienda.

Because income is often lower in retirement while longevity has increased, a second key issue is to quantify housing affordability for  older residents.

A third issue is to identify how the current housing stock and new construction can be  improved to meet the needs of elderly residents. A framework for studying housing can be built upon  three dimensions:

Una cuestión importante consiste en determinar cómo se puede mejorar el stock de viviendas actuales y las nuevas construcciones para satisfacer las necesidades de los residentes de edad avanzada.

1) physical (structure, neighborhood, linkages),

2)  financial (asset, liability,  operating cost)), and

3) psychological (self-image, well-being), recognizing that housing must be  integrated with services and that the housing market operates within a regulatory environment with  government fiscal requirements and limitations.  

Physical

El stock de viviendas existente en gran parte de las comunidades se diseñó para la mayoría de los compradores e inquilinos de viviendas -jóvenes adultos sanos- no para el envejecimiento en el lugar.

The existing housing stock in most communities was designed for the majority of house  buyers and renters—young, healthy adults—not for aging in place. By its very nature, the typology of  the housing stock changes slowly. Thus, most elderly residents must either adjust their physical  environment to fit their life or adjust their life to fit their physical environment. Elderly residents tend to live in older houses because they inherited, purchased, or leased the units in young  adulthood and have not moved. The houses may not be accessible or designed to safely  accommodate elderly residents. Many contain stairs (without handrails), bathtubs, uneven flooring  and tall counters, shelves, and cabinets. Large family houses require resources for ongoing  maintenance, so older houses are more likely to suffer from disrepair.

Un estudio indica que la mayoría de los propietarios españoles de edad avanzada no están dispuestos a hacer mejoras estructurales para mejorar sus condiciones de vivienda, a pesar de que prefieren envejecer en el lugar.

One study indicates that a majority of older Spanish homeowners are unwilling to make structural  improvements to enhance their housing conditions despite their preference to age in place. The  reasons are unknown. Do they think they do not need the improvements? Do they not have the  money? Do they not know who to trust to make repairs? Or are they comfortable with the situation  because it is familiar, and change brings risk? Research is needed to determine attitudes about  current housing environments and possible retrofits to develop retrofit plans and educational  campaigns. This could provide substantial economic opportunity for the remodeling industry,  creating demand for design services, materials, and construction.  

New construction offers an easier opportunity to design and build houses that accommodate aging  in place. One approach is to provide housing that provides safe and suitable accommodation for  residents of all ages, known as universal design, lifetime design, inclusive design, life span housing or lifecycle housing. A related approach is adaptable design, which incorporates features that are  adjustable or capable of being easily added or removed as needed to accommodate aging or  disability. The few builders who are informed about these designs have resisted incorporating  universal features in houses, complaining of increased cost and lack of consumer demand. Research  is needed about how to either camouflage universal design or educate and create demand among  younger as well as older buyers. Such an approach could help maintain the tradition of family care  and multigenerational households. Universal design standards can be promoted either through industry bodies or implemented by regulation and incentives, offering economic opportunities for  innovative design and construction. 

Another alternative is to build housing specifically for older residents either through new  construction or adaptive reuse of existing buildings. The lack of standardization of terms in the  seniors housing industry has created confusion for consumers. Active adult independent living or  retirement communities target residents in their 50s and older, promising low housing maintenance  coupled with leisure activities. These communities are likely to appeal to retiree destination  migrants, including international immigrants, whose flow to southern Europe has fallen since the  start of the Great Recession and again with Brexit. Although these immigrant flows have attracted  substantial research, significant gaps still exist in understanding housing preferences and decision  making. Little is known about whether these aging immigrants will move again or age in place,  turning active adult communities into inactive adult communities. One type of specialized housing that attracts the young-old is the golf course community. These developments impose a large  physical footprint on the land, require a substantial amount of water and generate pollution through  chemical runoff. Studies indicate that house buyers often choose a golf course community for open  space rather than for playing golf, so alternative development designs incorporating less costly and  damaging open space may be just as attractive to buyers. Cost-benefit analyses of these types of  communities are rare. 

La resistencia a mudarse a cualquier vivienda colectiva que ofrezca servicios se basa en parte en el aspecto institucional y el funcionamiento de muchas de estas instalaciones.

Assisted living and congregate care units are usually located in multifamily buildings, cater mostly to  single women who need assistance with activities of daily living and attract residents in their 70s and  older. Specialized memory care and nursing care facilities are usually housing of last resort. The  resistance to moving into any group housing that offers services is partially based on the institutional  appearance and operation of many of these facilities. The infection and death rates from the COVID 19 virus revealed one danger of large-scale “warehousing” of the elderly, yet most providers rely on  economies of scale to make the facilities financially feasible. Research is needed to create more  small group housing designs, like The Greenhouse, that can be affordably constructed and operated  yet provide the appearance and atmosphere of a house.  

Research is already underway for supportive technology to improve older residents’ living  environments and enable aging in place with few human service providers. Among the promising,  although still very expensive, products being developed are floors that sense when a person has  fallen and sensors that determine when a person does not move in the house. Opportunities exist  to develop a variety of systems, software, and equipment that can be mass produced and installed in  existing housing, which will create demand for engineers, technicians, and medical specialists. 

The location of the elderly’s housing within the community determines the residents’ access to  transportation and services and, thereby, their ability to live independently. Those who purchase or  lease a house as young adults usually focus on location relative to family, schools, and employment. In later years, they focus on access to social networks, transportation, shopping, and health services. The elderly resident’s ability to age in place, especially in rural areas, is often predicated upon  younger family members living either in the same house or nearby to provide support. The flow of  young people from rural to urban areas for employment opportunities leaves their parents living  alone in sometimes isolated surroundings in economically depressed regions; however, the demand  for transportation and home-delivered services may create economic opportunities in these  communities. There may be a shortage of qualified younger local workers to take advantage of those opportunities, so immigrant flows into these areas may help with resettlement while supporting the  local elderly population. Roommate, cohabitation, or co-housing plans could grow, allowing aging  residents to maintain a traditional residence, but share responsibilities and costs with other seniors  by consolidating their households. One company has started a service in Spain that matches possible senior roommates. A more dispersed approach is cohousing that promotes “active neighboring”  and/or includes professional caregivers living in separate houses in the neighborhood. A variation  could be training and employment of a younger member of the extended family or community who  lives in the area to provide daily support services to a group of elderly residents. 

Site selection for purpose built senior housing has received little research attention. Because of the  scale of many senior housing projects, they are often relegated to sites that limit walking  opportunities for shopping and exercise. Co-location with schools, day care centers or shopping  centers is an innovative option that has not been well explored. Senior developments can provide  amenities (wellness center, dining room, performance and meeting space) accessible to the general  public. Older residents can benefit from interaction with younger people and local businesses and  nonprofit organizations can benefit from the participation of older residents.

Financial. 

El mayor activo que poseen la mayoría de los propietarios de viviendas es su residencia principal.

For countries with high homeownership rates, house values are a key to financial stability  for elderly residents. The largest asset most homeowners possess is their primary residence.  Uncertainty surrounding house values due to economic recessions, political changes such as Brexit and the COVID-19 pandemic directly threatens elderly homeowners’ wealth and security. With slow to negative population growth and reduced immigration and tourist flows, the overall demand for  houses could decline, reducing house values and adding to the current oversupply of houses in some  areas of Spain, but at the same time increasing affordability. 

Well established hedonic models and conjoint analysis can be used to study how consumers value  alternative housing designs, locations, and living arrangements. Quantification of the cost of  retrofits, universal design, adaptive design, and purpose-built seniors housing will enable  researchers to evaluate the cost relative to the value these housing options provide. While one  might expect the resale value of universal design and retrofitted houses to rise with increasing  numbers of elderly potential buyers, the low elderly mobility rate suggests the likelihood of an  elderly person buying a house from another elderly owner is lower than the likelihood of a younger  buyer purchasing the house or a younger relative inheriting the house. The questions surrounding  rental house values are the same. Does the design or retrofit provide a sufficient rate of return on  investment? Does it limit the potential pool of renters, devaluing the property?  

Innovative seniors housing designs will require study to determine how to provide financially  feasible smaller scale, more personal living environments. Financial analysis of different provider  structures, facilities, and service combinations could identify viable alternatives. Alternative  ownership structures, such as cooperatives, which have been used to provide subsidized housing  and seniors housing, in Spain and Portugal, could be expanded. Another question to investigate is  how well the small social rental sector is serving the lowest income elderly residents. 

Private and public financing programs could support alternative housing designs, retrofits, and  service delivery. While the logical source of funds for owner-occupied housing is home equity, there  can be obstacles to accessing this wealth where regulation do not allow reverse mortgages as well as in countries like Spain where the legal framework exists, including lack of lenders, high loan fees,  depressed values of neglected houses, the desire to save housing wealth for a bequest, aversion to  debt, necessity to retain housing wealth to finance future long-term care needs, and concerns about consumer protections. The role of lenders and governmental agencies in the reverse mortgage  market has attracted researchers focusing on the rate of return, pricing, and default. Little research  examines the subject from the borrower’s point of view.  

Any housing that offers services tends to be expensive. Government benefits are insufficient to pay  the high cost of long-term nursing home stays unless a subsidized room is available. Middle-class residents often cannot afford the cost and must rely on family for financial support or else settle for  low quality facilities and care. Small-scale affordable alternatives are needed to incorporate housing  for elderly residents into residential communities; however, research is needed on how to integrate 

these facilities without detrimental effects on surrounding neighborhood atmosphere and house  values.  

The continuing care retirement community is an attractive concept to elderly residents who want to  live independently because it entails just one move, then planned aging in place. The financial  structure of these communities has proved to be a challenge as residents tend to live longer than  the developers expect. The result is that most are priced as luxury communities that only the  wealthy can afford. Developing an affordable CCRC concept would satisfy multiple demands from  the aging population. One proposal that warrants research is a scattered CCRC in which the  components of independent living, assisted living, and nursing care are scattered within a  neighborhood so that residents can age in the neighborhood as they move from one level of  supportive housing to another. The regulatory, design, and financial aspects need further research  along with understanding of younger residents’ attitudes about such housing being integrated in  their neighborhood and, therefore, the impact on property values. 

Psychological.

Emotional and psychological benefits make a house a home. It can denote success  and status, one’s position in the family and society. It can provide security and comfort. The house  and the possessions it contains evoke memories and emotions that are important to older residents  who spend more time looking backward than forward. Residents also express their personality  through architectural design, interior decorating, and landscaping. Residents derive aspects of their  identity, self-esteem, and well-being from their home. Previous research has established that these  relationships exist yet few discussions of providing alternative physical and financial housing options  incorporate their implications. Attachment to place can lead to reluctance to change or leave a  house even if it could improve quality of life. Criticism of the condition of one’s house may be taken  as a personal afront. Rational economic arguments may not persuade aging residents that housing  changes are in their best interest. 

El desarrollo de opciones de vivienda atractivas requiere la investigación de los estilos de vida de los adultos mayores y la creación de entornos que permitan a los residentes llevar el sentido de hogar a una nueva casa.

The house and its location enable the residents’ chosen lifestyle. Alternative housing is only  attractive if it allows participating in preferred activities and maintaining social contacts. Developing  attractive housing options requires investigation of elderly lifestyles and creation of settings that  allow residents to bring the sense of home into a new house. Ensuring that aging residents can  maintain their independence and sense of control are important considerations in housing design  and location. Family education and inclusion in housing decisions is also important so that children  recognize the psychological as well as financial and physical considerations in determining  appropriate housing for aging parents. It is easy for parents to feel selfish and ashamed if they want  to give up maintaining a large, isolated family home and choose a smaller and better located  residence, rather than passing its memories, traditions, and financial value to future generations.

El alto nivel de propiedad de viviendas entre las personas mayores de España y Portugal, junto con el creciente porcentaje de residentes de edad avanzada que viven solos o en pareja, sugieren que los problemas de vivienda deberían ser una preocupación importante.

The high level of homeownership among the elderly in Spain and Portugal along with the growing  percentage of aging residents who live either alone or as a couple suggest that housing issues should  be significant concerns. Addressing the issues surrounding housing and the aging population will create a variety of economic opportunities. Provision of an array of housing options for older  residents will depend on cross-sector collaboration to coordinate housing and support services as  well as involvement of the building industry, housing sector, government regulators, and older  residents themselves. The goal should be to develop a range of products and services to align  housing needs, demand and supply. The heterogeneous nature of the population and its physical  dispersal mean that there is not a single solution to the housing challenges this demographic change  creates for the region.