A senior housing crisis is on the horizon. The senior housing market is seeing more demand than ever as supply dwindles and generations age. The oldest baby boomers are turning 80 this year, and the generation is expected to be over 85 million strong in 2025. This year, we attended the 2024 InterFace Active Adult Conference in Dallas to learn about a senior housing option experiencing exponential growth in development and resident demand: Active Adult communities. This product type was once challenging to finance. However, banks and lenders have become more familiar with the product, making it easier to finance. This exciting community type could play a part in changing Baby Boomers’ point of view on senior housing and has enormous potential in the market.
What is an Active Adult Community?
As the name implies, active adult communities are intended for physically and mentally active older adults who need little to no assistance completing daily activities. There is often confusion between independent living communities and active adult communities, and the key differentiators are:
The Active Adult Resident & Lifestyles
Residents who choose to live in these communities are younger than those in independent living, averaging around 73 years old. Active Adult community residents often stay in their communities longer, with an average turnover rate of 20%, compared to multifamily, where resident turnover rate is 50%. Active adult residents are looking for a place to age with a community. We learned at the conference that residents choose to live in these communities for several reasons, including:
- Desire to downsize from a large single-family home with less maintenance responsibilities
- Wanting to stay active and socialize with peers in a community tailored for independent older adults
- Easier living arrangements that still allow flexibility compared to a traditional apartment
- Ability to age in place within the same community if future assisted living is needed
- Hospitality-focused services that make daily life more convenient
- Proximity to existing community ties like family, friends, and stores
- Amenities and programming that support health, wellness, and social interests
Programming and design elements that make Active Adult communities attractive to these residents are:
A Popular Senior Living Option
The product type is gaining more popularity, especially for developers, as there is an immediate demand pool for active adult communities. There is also no required healthcare licensure, less operational and nurse-level staffing costs, potential rent premiums, and there are longer residential lengths of stay.
As the most senior group of Gen Xers enter their 60s next year and their predecessors enter their 80s, this could be a popular option as there is an immediate demand for more senior housing. Many of the elements that set these communities apart start in their design. Using our decades of experience with this product type and new knowledge from the InterFace Active Adult Conference, we can implement many design elements catering to the next generation of senior living. If you want to pursue an active adult community, call us at 303.832.4474.
