Update: Focusing on the Construction Needs of an Aging Population

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With the leading edge of the Baby Boomer generation already past the age of 70, the next two decades will see a 90% surge in the number of people in this segment of the population.

As the ranks of Baby Boomers residing with their children or remaining independent continue to swell, housing demands are changing. There is a growing need for existing home renovations and new housing that accommodate the needs of this aging population. Where expectant parents baby-proof their homes, many residences now may need to be “senior proofed.” This poses challenges and opportunities for the construction industry.

Harvard University’s Joint Center for Housing Studies (JCHS) issued a report late last year that highlights the issues. The report, Projections and Implications for Housing a Growing Population: Older Adults 2015-2035, indicates that during the next two decades, the number of households headed by a person aged 65 or over will increase by roughly 41% to 41.2 million in 2025 and 60% to 49.6 million by 2035. At that point, 33.3% of U.S. households will be headed by someone aged 65 or older.

From 2015 through 2025, the most rapid growth will occur among households aged 70 to 79. From 2025 to 2035, the fastest growth will occur among households headed by someone who is aged 80 or over. In total, in 2035, the number of households headed by someone aged 70 or older will grow 90%, while those headed by a person 80 or older will more than double to 16.2 million.

Continued advances in medical care may further increase those numbers.

Implications for the Housing Market

Of course not all older adults live, or want to live, independently. Some reside with their adult children, others with relatives or roommates, and still others in group quarters, including nursing homes or similar facilities.

The expansion of older households offers significant opportunities for construction firms to provide the new and modified housing that this group will need. Even for the large share of older adults who plan to stay in place, their housing often isn’t well suited to their needs. By 2035, substantial growth in the need for modifications and technology is expected to enhance safety to allow for greater independence in the home.

Although the share of older adults who move each year is low, the JHCS projects more than “825,000 older households moving into owned homes and 1.6 million older households moving into rented homes in 2035.” Some will want to downsize while others will be looking for more space.

A recent survey by Demand Institute shows that 42% of respondents aged 50 to 69 who plan to move will want smaller homes and 32% will try to upsize. The survey by the independent consumer demand think tank found that the inclination to stay close to family and friends is clear, and most don’t expect to move far from their current neighborhood. That finding reinforced the results of an AARP survey in 2014 that showed that being near friends and family ranked as the top choice of housing preferences for those aged 45 and older.

Keeping Disabilities in Mind

Disabilities that occur more frequently with age can present a housing challenge for older adults, especially for those who want to grow old in their current homes. For example, most U.S. homes are poorly equipped to accommodate extra space for walkers or wheelchairs, require stairs to reach a bath or bedroom or have door and faucet handles that are difficult to manipulate for those with arthritis.
By 2035, 17 million older-adult households will have at least one person with a mobility disability who could be restricted by stairs, narrow corridors, doorways and traditional bathroom layouts. This will mean modifications and new construction will have to meet higher standards of accessibility.

Some individuals may resist modifications if they don’t have disabilities, particularly if they have financial concerns or they anticipate moving to another place as they get older. However, given that disability increases dramatically later in life, planning ahead can make eventual changes easier. For example, homeowners may be encouraged to add accessibility features during a remodel, such as a walk-in showers or bathroom walls reinforced for future installation of grab bars.

Develop Your Plans

It may be time for your firm to develop plans to take advantage of this rapidly growing segment of residential construction. Becoming a go-to contractor for seniors’ needs will likely give your company a competitive edge that may help expand your business. Visit the Certified Aging-in-Place Specialist (CAPS) program at the National Association of Home Builders (NAHB) website for guidance on the business management and customer service skills you will need.

The CAPS designation offers potential clients what they desire the most: assurances that your business can help with accommodations that will allow them to safely and securely remain in their homes. In addition, the CAPS designation makes homes more “visitable.” Even if homeowners don’t think they need additional task lighting, grab bars and other modifications for their own use, family members and others might. CAPS can help your company thrive in this growing remodeling market niche.

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Any accounting, business, or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough analysis of specific issues, nor a substitute for a formal opinion, nor was it written to be used to avoid tax related penalties.