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Senior Housing - An Overlooked Opportunity

A Brooke International Report

Most developers take pride in their ability to identify emerging demands and build new facilities to suit them. But as social and demographic trends indicate a latent demand for senior living facilities, nothing seems to be happening in this market segment.

Changing Demographics

As the baby boom becomes an elder boom in coming decades, profound change will occur across India as the elderly become a dominant part of the population. By the year 2050, a fifth of the entire population of India will be grey, says a census report. India is aging and at an amazingly rapid pace though addressing the needs of the greying population in the country is nowhere on the national agenda at present.

The population of those over 60 in India as per the 1991 census was 56.7 million that is 6.76 per cent of the total population. This shows a doubling of the aged population as compared to 1961 when it was 25.6 million. India had an estimated 65 million elderly people in 1996 and the demographic projection forecasts a raise to 177 million by 2015 AD.

Need for Social Security

In the past two decades the social scene, due to a number of factors, had undergone drastic changes with the joint family system breaking down. Today, nuclear families are the norm. Migration to cities in search of better opportunities, migrating overseas and breakdown in relationships etc. also contribute to isolation of the aged. This brings to the fore the need for social security and protection for the aged who becomes more dependent on others for even day to day needs. In this context it is the medical and emotional wants that need more attention.

As is observed in India, very little importance has been given to the housing situation of, and for, the aged. While it is a fact that we have the family-based approach to shelter and housing, it is presumed that this arrangement is satisfactory to all concerned.

Senior Housing Industry

Senior Housing & Care is a big industry in the United States and Europe. The gross capital size of the seniors housing marketplace in USA is estimated to grow from $86 billion in 1996 to $126 billion in 2005. The seniors housing industry is currently one of the most sought-after segments of the real estate market in the US because it is lucrative and its future extends deep into the 21st century.

Housing and long term care are available to senior citizens from the lowest level of care provided-such as a senior apartment-to the highest level of care-a skilled nursing facility. There are four basic models of Senior Housing. They are

1. Assisted Living
2. Independent Living Retirement Communities
3. Nursing Care Facilities
4. Continuing Care Retirement Communities

Assisted Living Communities

Assisted living communities are designed for individuals who cannot function in an independent living environment but do not need nursing care on a daily basis. Assisted living communities usually offer help with bathing, dressing, meals, and housekeeping. The amount of help provided depends on individual need.

Many assisted living facilities also have professional nurses and other health care professionals on staff or available on call should a resident require special care.

Independent Living Retirement Communities

Independent living communities are residential communities for active older adults who want an enjoyable lifestyle free of the worries and trouble of home maintenance.

Many independent living communities provide a full range of activities that promote social contact among residents. Shopping trips, outings to cultural events, and organized gatherings are typical activities. Many independent living communities also have tennis courts, swimming pools, activity rooms, golf course and other amenities. Most offer a variety of meal plans, including the option of preparing meals in your own apartment.

Nursing Care Facilities

Nursing care facilities, or nursing homes, provide care for individuals who need nursing care on a regular basis but do not need to be hospitalized. The care is administered by nursing professionals under the direction of a physician.

Continuing Care Retirement Communities

Continuing care retirement communities (CCRCs) offer seniors long-term contracts that guarantee lifelong shelter and access to specified health care services. CCRC residents enjoy an independent lifestyle with the knowledge that if they become sick or frail, their needs will continue to be met.

Most CCRCs establish minimum requirements for incoming residents based on age, financial assets, income level, and physical health and mobility. In general, residents are expected to move into the community while they are still independent and able to take care of themselves.

Opportunities for Indian Real Estate Market

A study conducted by Technical Committee on Population, Planning Commission shows that 52 percent of elderly people in urban areas are living alone. There is a large segment of active old population who are living alone and on the lookout for relaxed lifestyle. Independent Living Retirement Communities could be an answer to their needs.

"The State of Seniors Housing 1997", a report drafted by the American Seniors Housing Association and Coopers & Lybrand LLP, states that median gross margin for all types of seniors housing is US is nearly 31%.

A dip- stick survey conducted by BII found that the increasing individuals age 60 and above can more easily afford to live in a senior housing community than past generations. BII also found that the concept of seniors housing is experiencing greater awareness and acceptance within this demographic group.

There is a need of joint ventures between for-profit and not-for-profit organizations to develop seniors housing. These "marriages" are ideal. Each player brings a specialty to the project. These partnerships can result in an attractive complement of services and also target various income segments. Hospitals can also provide their own home healthcare services to assisted living and other seniors housing complexes.

Local governments will be required to play a key role in providing impetus and direction to seniors industry in terms of housing regulations, zoning laws, funding, tax credits and myriad other factors. Other variables that will influence the future of seniors housing are the economy in general, financing sources, availability of land and/or existing properties, variety of housing options, affordability issues, services and partnerships.

Seniors housing can be a burgeoning industry on a national scale fueled by demographics, acceptability and financing options. The key to success will be creativity on the part of its developers and owners.

Real Estate

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