|
Renter Households |
Distribution |
|
Under 25 |
12.7% |
|
25-34 |
27.9% |
|
35-44 |
22.7% |
|
45-54 |
15.0% |
|
55-64 |
8.1% |
|
65-74 |
6.0% |
|
75 and over |
7.5% |
The general size of the age-qualified housing market.
Over the next five years, the 55+ population is projected to grow by 13.2%. Over the next decade (by July 2013) that total is expected to increase by 29.5%.
U. S. Population Projections — Middle Series
Source: U.S. Census Bureau (numbers in thousands)
|
Age Group |
July 1, 2003 |
July 1, 2008 |
July 1, 2013 |
|
55 and older |
62,962 |
71,248 |
81,544 |
|
Figures taken from the "middle series" of a three-part set of projections that include "low," "middle" and "high for population estimates across the country. |
The age-qualified rental housing market should grow at approximately the same rate as the U.S. senior population — roughly 30%. What’s more, actual development opportunities far exceed the growth rate.
It’s a dilemma for seniors in search of rental communities, but it’s an exciting challenge for builders, developers and others in the seniors rental housing industry.
Sizing Up Income
2000 Census income data for renter households by age of head of household is not yet available, but late last year the Census Bureau did release income data for all households (including owners and renters). Although median incomes for renter households are likely to be lower than for total households, the overall pattern should be the same.
As a rule, income levels peak in the 45-54 age bracket, then begin to trail off. Households in the 55-75 age group should boast higher incomes than all other renter households and can afford to pay rents above the median rent levels in a local market.
Median Household Income by Age
Source: 2000 U.S. Census
|
Households by Age |
Median Income |
|
Under 25 |
$22,679 |
|
25-34 |
$41,414 |
|
35-44 |
$50,654 |
|
45-54 |
$56,300 |
|
55-64 |
$47,447 |
|
65-74 |
$31,368 |
|
75 and older |
$22,259 |
Research the Local Market
While national trends may be favorable for age-qualified, market-rate rental developments, local market conditions vary significantly. With careful research, it will be possible to find underserved age-qualified markets that are ripe for new rental housing development.
There are several ways to identify attainable rent levels for a market-rate age-qualified community in your area. First, identify several high-end, walk-up apartment developments in your local market. Often, these developments draw high-income 55+ residents because of their quality.
Cross-reference the street address of the development to access the 2000 Census for that census block. Many times, the building will be the only apartment development in that particular census block. From the 2000 Census, you will be able to identify the number of renter households in the building by age group.
Determine Market Value
Typically, street access to these buildings is not secure. They feature walk-up units, so residents with mobility problems must choose ground-floor units, the least secure units on-site. If average monthly rent levels are $750 for a one-bedroom unit and $1,000 for a two-bedroom unit, it is possible for rents in a controlled-access, elevator building to be as much as one-third higher.
To verify your findings, search out market-rate rental buildings that offer a range of services, such as meals, to seniors who are 75 and older. These developments also have controlled access and include elevators. Ideally, apartment owners offer basic shelter, plus on-site services such as housekeeping and meals on an a-la-carte basis. A fully, unbundled basic rent in a seniors building offering these services should be equal to the attainable rent levels for a market-rate, age-restricted rental development. In our example, the basic rent for a one-bedroom unit would be close to $1,000 per month, while the two-bedroom basic rent would be nearly $1,400 per month.
Look for Development Opportunities
In many suburban markets, virtually all apartment developments are two- and three-story walk-up buildings. There may be an obvious market opportunity in your suburban area. Other possibilities include college towns. Students often dominate the rental housing market, but there are few rental-housing alternatives for mature adults. Consider building a market-rate rental seniors housing community — the numbers clearly are in your favor.
This article appeared in the Summer 2003 issue of Seniors’ Housing News, a quarterly magazine of the NAHB Seniors Housing Council. Author Gilbert Till is president of Urbek®, an economic consulting firm based in Seattle. Urbek® specializes in comprehensive site-specific housing market studies nationwide and has provided market analysis since 1980. Till also is a member of the NAHB Seniors Housing Council. He can be reached at 206-282-9300 or gtill@urbek.com.
Learn More About Seniors Housing Through the Seniors Housing Council
To learn more about seniors housing or boomers, join the NAHB Seniors Housing Council. The council provides information, education, networking and recognition opportunities for its members and represents NAHB on seniors housing issues. For more details, e-mail Jeff Jenkins or call him at 800-368-5242 x8292.
BuilderBooks.com Has Publications About Seniors Housing
BuilderBooks.com offers a variety of publications about the seniors housing market. To view or purchase these publications, click here and type “seniors” in the search engine.
2004 Seniors Housing Symposium
To learn more about the seniors housing market, plan to attend the 2004 Seniors Housing Symposium, Building for Boomers & Beyond in Chicago from April 14-16. The symposium will focus on the lifestyle component of 50+ seniors housing.
University of Housing Offers CAPS Designation Program
The NAHB University of Housing offers the Certified Aging-in-Place Specialist (CAPS) designation program that teaches the technical, business management and customer service skills essential to competing in the fastest growing segment of the residential remodeling industry: home modifications for the aging-in-place. For a complete list of current offerings, click here.
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