Insights

Baby Boomers See More Appeal for Urban Housing: Here's What They Want

January 09, 2019

It's not just the young who want to live in amenity-rich buildings in close proximity to urban centers with parks, museums and cultural activities. The baby-boomer generation is downsizing and ready to take up residence in these types of locations, too.

“They seem to be looking for walkability and access to local businesses and restaurants, so a more convenient lifestyle than they had in their suburban homes where many raised their kids," Rick Haughey, a vice president at the National Multifamily Housing Council (NMHC) told Greystone.

The sheer size of the baby boomer generation underscores their potential impact on the multifamily market. “For example, a one percent change in their preference for renting creates demand for 700,000 apartments," Haughey said.

Developers are paying attention to the trend with more multifamily buildings now catering to demands from a new crop of demographic groups.

Walkability Proves Key

Millennials have a lot in common with their mature counterparts, the baby boomer generation, including the desire for walkable neighborhoods. Research from Multi-Housing News shows that in recent years the proximity to everyday conveniences is a “major factor” when both groups look for a place to call home.

“Both millennials and boomers value the ability to walk to a restaurant, neighborhood market or coffee shop,” notes MHN.

As a result, boomers are opting to trade in their sprawling suburban homes in favor of renting and enjoying a low-maintenance lifestyle. The community features they want include well-maintained streets and sidewalks and safe parks, according to AARP.

And while many baby boomers are still active, as the population ages, the need for regular healthcare appointments is inevitable. As a result, AARP notes that apartment-dwelling boomers also look for convenient access to hospitals and healthcare facilities, often a feature of densely-populated areas like cities.

Baby Boomers Could Re-Shape Housing

The number of Americans who are 65 and up by 2060 is set to increase by more than 100 percent to nearly 100 million, and nearly one in four Americans will be part of this demographic, compared with 15 percent today, according to the Population Reference Bureau.

AARP's survey on home and community preferences showed that 60 percent of older adults ranked transportation for people with special needs and job training and flexibility as keys to choosing a community.

Moreover, about half also said having easy access to local volunteer opportunities, activities and training was extremely or very important in a community.

“City dwellers want the urban experience for their 80+ year-old selves – places to gather with friends, scenic areas, outdoor recreation and shopping, cultural experiences, farmers' markets, etc.,” according to a 2017 Aging in Cities Survey.

What Are Most Popular Amenities?

While boomers share millennials' interest in a fitness center, pool and screening room, they also expect more in the way of planned social activities, the NMHC found.

“We've heard that some apartment communities have been developed for millennials, and the owners found that boomers ended up being attracted to the development," said Haughey.

Unlike millennials, many boomers only work part-time because they're retired, so they look for organized programming to fill up their calendars. The NMHC said that multifamily developers need to think cooking classes, bocce leagues and happy hours for residents, as well as for their canine companions.

Boomers also look for larger apartment units with more storage than their younger counterparts, and many value aging-in-place services.

The Affordability Factor

The NMHC is seeing a rising preference for apartments in urbanizing suburbs that offer some of the amenities offered in the city, “but at a more affordable level and often with parking," Haughey said.

RENTCafé agreed that one of the biggest game changers in the rental market seems to be “older, highly-educated renters.”

The national stats revealed that, between 2009 and 2015, the biggest changes in the renting population came from seniors aged 55 or over (up by 28%), compared to only a 3% increase in renters 34 or younger. By education, the highest increases were in renters holding a bachelor's degree or higher (up by 23%), and by family type, in families with no minor children (up by 21%).

What do these three categories have in common? They all point to one group: empty-nest baby boomers. Whether driven by a change in lifestyle, a consequence of the housing crash, or an inability to find affordable homes to downsize, senior households are embracing renting in droves.