Senior living will continue to play a large role in housing options for older Americans even as the number of baby boomers moving into retirement skyrockets in the next decade. However, major questions remain as to the availability and affordability of senior living in the future, according to a report released Tuesday Dec. 13 by the Harvard Joint Center for Housing Studies.
The number of Americans aged 65 and older is expected to grow from 48 million to 79 million by 2035, the report states. By 2035, one in five people in the country will be 65 or older.
Three topics covered in the report that could be of interest to senior housing providers include the need for housing in small towns, the role of home equity in financing, and trends in dementia.
Small town opportunity
Though a majority of older adults wish to age in place, a significant portion of seniors just wish to stay in the community they know and love.
The desire to remain in one’s home town should be looked at as an opportunity for the private sector and, more specifically, the senior housing industry, Jennifer Molinsky, senior research associate at the Harvard Joint Center for Housing Studies and lead author of the report, told Senior Housing News.
While many high-profile senior housing deals and development projects are in high barrier-to-entry, dense urban markets, future housing needs will increase substantially in other areas.
“Nearly half of older adults are aging in low density places,” Molinsky said. “If we think of small towns as an opportunity to build housing for older adults it will let them live where they want to live and have the option to downsize as well as be a great opportunity for the private sector.”
One issue that is often brought up when older adults move into senior housing is affordability. For homeowners, selling their home can help cover the costs of senior living communities but seniors who still rent their home may not have as many options.
For many homeowners, the average cost on a monthly basis for an assisted living facility, which is $3,500 is not a viable option. Based on the average cost, homeowners who only tap into their savings or other non-home equity resources to pay for assisted living will be able to pay for 29 months living in assisted living, the report found.
If a homeowner taps into their home equity however, such as by either selling their home or taking out a home equity line of credit, they could afford to live for 74 months in an assisted living facility.
The typical older homeowner has 42 times more wealth than that of the typical older renter, so for renters, this may be tough. Renters would only be able to afford two months in assisted living, according to the report.
Dementia in 2035
Along with the increase of older Americans, the number of people with dementia will rise by 2035, even if incidence continues to fall, according to the report.
“The Joint Center’s projections estimate that if dementia rates continue to decline at the rate they have from 2000-2010, by 2035 the number of adults aged 65 and older with dementia may reach 6 million, with another 13.9 million having some form of cognitive impairment that does not meet the criteria for dementia,” the report said.
One of the main reasons the U.S. will see a rise in people with dementia is due to the bulge of baby boomers reaching old age. But right now, dementia risk is declining.
The comprehensive 98-page report also brings up the following topics:
-The growth of low-income adults
-Trends in the numbers of households with disabilities
-How obesity, diabetes and arthritis could impact aging baby boomers.
Written by Alana Stramowski