Baby boomers, those born between 1946 and 1965, have brought both challenges and opportunities to the U.S. economy, infrastructure, and institutions as they have passed through each major stage of life. According to The Population Reference Bureau, the current growth of the population ages 65 and older is one of the most significant demographic trends in the history of the United States— with the baby boomer generation potentially fueling a 75% increase in the number of Americans ages 65 and older1.
As aging baby boomers reshape America’s demographics, the real estate industry must adapt in order to meet the unique preferences and needs of baby boomers— and their ideas of what retirement should look like. With that said, the nature of senior living communities around the world has changed dramatically over the past several years. In the tristate region and across the nation, housing is being designed to appeal to the growing baby boomer population.
The Rise of Active Adult Retirement Communities
Many baby boomers expect to live comfortably on their own, experiencing reasonable heath, for a long time. In response to that expectation, the majority of housing under development in the tristate region will provide independent living facilities. Real estate developers realize the importance of addressing the needs of the aging baby boomer in the creation of unique and specialized housing.
According to Columbia University’s report on senior housing2, the most prevalent development is the “active adult community,” which consists of apartments, homes, condominiums, or cooperatives, restricted to individuals age 55 or over. Many of these facilities include amenities and recreational or social activities, but do not include supportive assistance, personal care or health care. No license is required to build or operate these facilities.
In addition, the website 55places.com reports a total of 60 active adult retirement communities in the New York region: with 17 communities in the Westchester/Carmel region; 31 properties in Eastern Long Island; and 12 communities in Western Long Island. With a total of 237 communities, New Jersey ranks in the number one slot, with the majority of properties located in southern and central New Jersey. The majority of these units are for sale as opposed to being offered for annual or monthly rental.
Tackling the Housing Challenge of Aging Baby Boomers in the New York Region
The New York City Department of Aging estimates that by the year 2030, the city’s population aged 60+ will make up 1 in every 5 New Yorkers3. Despite this projection, the New York City region currently has a limited number of senior living facilities to serve this growing population— fewer than 75 beds in these communities are fully licensed by the New York State Department of Health to provide assisted living and memory care services.
Further, the NYS Department of Health website reports a total of only 13 “continuing care retirement communities” in New York State, with six located in the metropolitan region4. They include:
- Jefferson’s Ferry, South Setauket, New York
- Peconic Landing, Greenport, New York
- The Knolls, a Bethel Community, Valhalla, New York
- Kendal on Hudson, Sleepy Hollow, New York
- The Amsterdam at Harborside, Port Washington, New York
- Fountaingate Gardens, sponsored by Gurwin Jewish, under development, Commack, New York (approved to take priority reservations only)
Continuing care retirement communities (“CCRC”) and fee-for-service continuing care retirement communities (“FFSCCRC”), as defined by the NYS Department of Health, are residential alternatives for adults that offer, under one contract, an independent living unit (an apartment or cottage), residential amenities and access to a continuum of long-term care services, as residents’ health and social needs change over time.
Residence in a CCRC/FFSCCRC requires a significant financial commitment. Cost is based on a variety of factors, including community location, size of apartment chosen and type of resident contract signed. Payments to a CCRC/FFSCCRC consist of two components: an entrance fee, and a monthly fee. Entrance fees begin at approximately $115,000 for a single person independent living unit. Monthly fees begin at approximately $2,100.
To help support the housing needs of the underserved senior population in Manhattan, plans to develop two new “high rise senior living” facilities have recently been announced:
- Maplewood Senior Living and Omega Healthcare Investors (NYSE) recently organized an assemblage of properties where they plan to build a facility5. The facility will be located on 2nd Avenue between 92nd Street and 93rd Street. When completed in early 2019, it will provide 215 luxury apartments offering independent living, assisted living and memory care.
- Last year, Hines and NYSE Welltower, Inc., announced details of their planned Midtown Manhattan senior living community, a 125,000 sq. ft. 15-story building designed to promote wellness for its senior residents in need of high quality assisted living and memory care services in the private pay market6. Welltower has tapped Sunrise Senior Living to operate the community, which will be built at 139 East 56th Street, on the northeast corner of Lexington Avenue. As reported in the Wall Street Journal, certain units in this building may rent for as much as $20,000 per month7.
High rise senior living is a vertical lifestyle solution, most often offered to seniors in an urban marketplace. This form of housing allows seniors to enjoy the benefits of urban living while being close to their adult children (and grandchildren) who often live and work in the city. The concept of high rise senior living may also be an attractive option for baby boomers who previously lived in the suburbs or may have retired to Florida, Arizona, and other states around the nation.
Long Island, with its proximity nearby to New York City, is the site of numerous assisted living complexes in various stages of development. Assisted living facilities provide a wide range of services including housing, supportive services, case management, medication management, monitoring, supervision, personal care and health related care to adult residents.
One of the most active assisted living developers is The Bristal Assisted Living, headquartered in Long Island, with twelve locations throughout the island, two in Westchester County, and one in Woodcliff Lake in Bergen County, New Jersey. The company offers a variety of senior living options including (a) independent living, (b) assisted living, (c) memory care and (d) Alzheimer’s Day Care, a nonresidential program. Earlier this year, The Bristal at Lake Success opened as the first standalone memory care community— in collaboration with the Feinstein Institute for Medical Research, the for-profit research branch of Northwell Health8. It is one of the first assisted living facilities enabling research in a place where people with early stage memory loss live. It is one of the first assisted living facilities enabling research in a place where people with early stage memory loss live.
With the baby boomer generation driving an unprecedented increase in the number of Americans aged 65 and older, it is vital the real estate industry continue to adapt and evolve to sustain the unique housing needs of this growing population.