The senior housing market can be compared with a train, says developer Stephen Wright: "We can see the freight train coming down the track traveling at a constant speed. It may have different buying preferences, but we know how big it is and when it's going to arrive."
As a matter of fact, that train is projected to bring in a staggering 63 million American seniors, aged 65 and older, by 2025. In the meantime, the current older adult population is already 25 million, accounting for 13 percent of the U.S. population.
While the numbers are predictable, the market preferences of today and tomorrow's seniors haven't quite been nailed down. But judging from the innovative housing options springing up today, industry developers have most certainly been doing their homework.
Larger spaces, a more residential feel and a greater selection of amenities are features now headlining the marketing brochures of assisted-living facilities, continuing-care retirement communities (CCRCs) and independent senior housing facilities. The market is changing and savvy developers are working diligently to predict the trends.
Enter a new generation
Not too long ago, senior housing facilities mostly hosted a generation who grew up during the Depression, rarely went out to dinner and insisted on mowing their own lawn. Consequently, this group never saw themselves as buyers of such "extraneous" services as dining, transportation and laundry, according to Wright, chairman of UNICUS Inc., Northfield, Ill., a developer of senior residential communities. But with this population now becoming the minority within the next generation of seniors, the new consumer is a much more discriminating one.
"We are in the middle of a revolution in the needs and requirements of elder care consumers," declares Martin Valins, director of senior living for the Phoenix, Ariz., office of Chicago-based OWP&P Architects.
Today's seniors are no longer accepting the traditional definition of retirement. As the healthiest and fittest retirees in all of history, they are not interested in choosing between chicken and fish in the same dining room every night. As a result, retirement communities are starting to offer carryout, cafes and bistros to supplement the formal dining option, according to Valins' OWP&P colleague Joseph Hassel. In the trendier facilities, programming boards are displaying pottery, painting, book clubs and Wall Street Journal discussions in place of the traditional bingo and movie nights.
From a design standpoint, senior-housing developments have also begun transforming the "health-care" elements in their communities to become less pronounced.
"Yes, these seniors know they're going to get old, but they don't want that to be the visible symbol of the community they move into," explains Bill Witte, president of THW Design, whose Atlanta-based firm specializes in health-care design.
For example, a typical CCRC, which offers a continuum of care ranging from independent congregate living to skilled nursing, now has its medical buildings strategically tucked away in the background. Inside its health-care facilities, the centralized nurse's stations are being redesigned, and the hallways and private areas are being refurnished with floor coverings and residential-looking furniture.
The size and shape of CCRCs is also changing as developers heed the call of consumers for more room and amenities.
"Whether it's cottages or apartments, we're seeing the square footage increase," explains John Nicolay, executive vice president of Bovis Lend Lease, a New York City-based contracting firm that builds senior housing.
Even though seniors downsize when they move into their retirement homes, they still want their space. Consequently, the typical 900- to 1,000-sq.-ft. dwelling with one bedroom and a living room has been upgraded to between 1,200 and 1,800 square feet with two bedrooms, a living room, a dining room and perhaps even a den, says Nicolay.
In addition, the programming area within these developments has doubled to about 45,000 square feet to accommodate libraries, computer rooms, beauty salons, craft rooms, wellness facilities and the like.
"CCRCs used to be apartments and nursing homes," says Jim Boniface, a vice president with A/E FreemanWhite, Charlotte, N.C., who heads up the firm's senior living group. "Today they are complexes with pools, massage parlors, a concierge, travel agency, business center, fitness center and in a few years, maybe even a branch bank."
Consequently, the infrastructure to support all these amenities is also changing.
"We are running category-5 lines to all rooms because if the residents are not e-mailing their grandchildren, they may be taking a course or running a business online," notes Boniface.
In turn, M/E engineers are stepping up to the plate, not only providing residents with temperature and lighting control, but also employing innovative engineering strategies to enhance the ambience in these facilities.
"We're learning how to light cafes and restaurants like they strategically do in grocery stores to make the food look more appealing," explains Hassel, a senior living design director for OWP&P. "By controlling the ventilation, we can bring in the smells of roast beef and baking bread from the kitchen into the dining room."
On a more practical level, Fred Lindenmuth, a senior engineering manager in OWP&P's Phoenix office, notes that senior facility electrical designs are taking into account utility industry deregulation.
On-site power and diesel generators have gained popularity, and designers are building in more flexibility so that owners can run their systems using either electricity, natural gas or both.
Overall, engineers, contractors, architects and interior designers have their hands full with 30 to 40 CCRCs being built yearly, according to Nicolay, and 300 to 400 free-standing assisted-living facilities springing up annually.
The assisted-living option
While not a new concept, assisted-living facilities are enabling seniors who can still manage certain daily living skills to avoid the skilled-nursing option. As a radical departure from the institutional setting of traditional nursing homes, assisted-living facilities have been grabbing a healthy market share for the past several years.
"Wall Street and others became enamored with the product we call assisted living, as it can be standardized and stamped out," says Wright.
However, some developers complain that these facilities are too driven by corporate objectives in a market that was formerly characterized by nonprofits, religious and social service groups. In addition, Wall Street is no longer supplying the funding hand over fist to a market that is perhaps oversaturated. On the other hand, Wright notes that some economists are saying the facilities must continue to be developed in order to meet the needs of the rapidly growing senior population, which includes increasing numbers of seniors with some form of dementia — currently, one-fifth of all seniors over 80.
In response to this increasing population of seniors with mental impediments, many of whom have retained their physical abilities, a new flavor of assisted-living was added a couple of years ago to the growing selection of senior-housing options: Alzheimer's facilities.
What's unusual about many of the trendier assisted-living and Alzheimer's facilities is that they are "built to look and feel like a house, but structured like a hospital," according to Dr. Victor Regnier, a professor of architecture and gerontology at the University of Southern California, Los Angeles.
Regnier, who also moonlights as a design consultant for Sunrise Assisted Living, Maclean, Va., explains that a number of these facilities have the fire- and life-safety specifications of a medical building, but are furnished to look like a home, even down to a pet dog.
The consultant also notes a number of creative design strategies developers are applying to make these environments more functional, particularly for dementia-challenged seniors:
Graduated clothing closets are designed to layer clothing in the order of dress so that residents can take out and put on one piece of clothing at a time.
By painting the bathroom wall a contrasting color, the commode stands out as a reminder to seniors to use the facilities.
Half-walls and freestanding windows help residents navigate from room to room.
Open kitchens enable seniors to participate in setting up for meals.
Although designers and developers have been working wonders to create ideal living environments for seniors, the down side is the price tag.
"It's great if you can afford it, but unfortunately, only about 5 percent of the senior population can avail themselves of the best product," notes Witte. "The real question is what are we going to do with the rest of the population, especially as the baby boomers age?"
Europe's system a prototype
According to Valins, Europe is managing this challenge rather well, thanks to a more socialized medical system. Thus the question is posed: Should U.S. municipalities play a more active role in creating affordable housing options for seniors?
In some cases — as in Highland Park, Ill. — they are. In this upscale Chicago suburb, property taxes and rents have increased so much that seniors on a fixed income can no longer afford to live there. As a result, the Highland Park Housing Commission recently donated land to be developed into an affordable retirement community, offering subsidized housing at 50 percent below market prices, according to David Brint, CEO of Brinshore Development, whose Northbrook, Ill.-based company is building this project.
Other attempts include increasing the size of senior communities so that economies of scale kick in, says Glen A. Tipton, a senior vice president with Cochran Stephenson & Donkervoet, an architecture and interior design firm in Baltimore.
But overall, developers admit to being rather stumped by the challenge. "It's something we're all struggling to find an answer to," Tipton concludes.
Another key struggle has been that of the nation's skilled-nursing facilities, battling to stay afloat among a sea of competing senior housing options. Compounding the challenge are regulations and connotations associated with traditional nursing homes.
"In many cases we have been classified and perceived in terms of the disabilities of the people we care for instead of the services we provide," says Kenneth Durand, president and CEO of C.C. Young Retirement Community, a development in Dallas offering independent, assisted-living and skilled-nursing housing.
With 25 to 30 percent of all skilled-nursing chains in some form of bankruptcy, Durand compares the situation with debtor's prison. "[Skilled-nursing facilities] already have inadequate resources and then we tell them they are providing substandard care, so we fine them and take more money away."
On the horizon
Durand suggests redefining the focus of what a senior-housing facility does by building up its outreach services to become a continuum that extends into the larger community. This way the facility can ultimately work as a resource to help keep seniors in their homes, says Durand. For example, by allocating more resources to home health care and community centers, for example, more seniors could potentially postpone a move into a senior facility.
Witte identifies a similar trend — naturally occurring retirement communities — where seniors naturally congregate, attracting retail establishments, doctors' offices and pharmacies to the neighborhood.
Witte is also involved with the development of a trendy new retirement community designed to look like a European village with cottages surrounding a plaza/town square as the center of dining and shopping activity (see "New development simulates European village," page 28).
Tipton concurs that in the future, more developers will build retirement communities with a Main Street theme.
In fact, such a marketplace of activity encourages seniors to be more active themselves. "A place that is stimulating and exciting keeps seniors moving, and that's the best thing they can do," says Witte.
Yet another up-and-coming trend is building communities near college campuses for alumni and retired faculty, says Valins. Because seniors have an interest in retiring to college campuses in order to avail themselves of the opportunity to consult, study or teach, developers are now building senior housing in college towns.
Whether it's future developments or current projects, the senior housing market is hopping. Despite the increasing senior population, developers who wish to fill their occupancy quotas must understand the changing marketplace. As Boniface concludes, "Success is not where the puck is, but where the puck is going."