As the proportion of older people in populations around the world grows, so too does demand for age-appropriate housing. But today’s older generations want and expect more out of life, which creates opportunities for investors that are willing to break with tradition.
In 2016 a UK study found that while many older people want to downsize, they often find they can’t. Of 19.1 million households, 9.2 million had already moved to a smaller home, were currently considering downsizing or were expecting to buy a more modest property in the future. According to the researchers, however, “whatever the pros and cons of moving, staying put can easily become the path of least resistance”. This is due for the most part to a shortage of attractive real estate options for this growing demographic.
What an attractive option looks like depends on whether older couples and individuals are looking for a standalone house, a regular apartment or a place in a cohousing development. What’s clear, though, is that growing legions of older people simply don’t want the same things their parents did. Yesterday’s retirees were content to be segregated from mainstream society – in care homes, retirement complexes or individual homes on the edge of towns and cities – but today’s older people increasingly choose urban over rural, integration over segregation, and activity over endless rest.
This presents the real estate industry with a huge opportunity to use good, contemporary design to transform its offering for older people. Outside the home, urban planners and designers are creating neighbourhoods and infrastructure that enable and encourage walking, cycling, and use of public transport. The American Society of Landscape Architects, for example, has developed a ‘design for active living’ concept called “transit-oriented developments”, and cities around the world are focusing more and more on high-density neighbourhoods, improved pavements and pedestrian crossings, and better access to public transport.
A well-designed ‘downsizer home’ will typically be easily accessible, conveniently located, energy efficient, easier to maintain, and sometimes, but not always, smaller. The UK’s Housing Our Ageing Population: Panel for Innovation group has developed 10 key principles for design of housing for old people, which focus on simple concepts such space and flexibility, natural light, balconies and outdoor space, adaptability, technology-readiness, shared facilities, plants and the natural environment, energy efficiency and sustainable design.
The detailed application of principles like these is producing inspiring designs for communal living complexes and care homes in locations around the world. Among them are Hogeweyk dementia village in the Netherlands, the Kotisatama cohousing project in Finland, and theUnited St Saviour’s almshouses in South London, all referenced in our recent white paper on real estate and the ageing population.
The rise of housing for older people as a pressing issue in countries around the world is driven primarily by demographics. Globally, the number of people aged 60 and over stood at 962 million in 2017, and is predicted to more than double (to 2.1 billion) by 2050 and more than triple (to 3.1 billion) by 2100. As a result, governments around the globe are encouraging active, engaged lifestyles as a way of improving health and wellbeing among older people and reducing pressure on (and the costs of) health and social care. Such initiatives are driving the demographic trend further, since these actions promote longevity.
Just as individual retirees are looking with fresh interest at housing schemes designed with activity in mind, so too are owners and investors in care homes. One emerging solution is modular buildings that are manufactured at scale and then assembled in bespoke configurations on-site. Dr. Bill Thomas, founder of The Green House Project andChangingAging.org, has created Minka houses — dwellings that can be designed, 3D-printed, packed into a cargo container, shipped and assembled, anywhere in the world.
“Tens of millions of people of all ages will find their houses, and housing stock in general, to be too big, too expensive and too hard to maintain,” Thomas said in London earlier this year. “For older people, sustaining a big, unwieldy house can be the thing that tips the scale from independence to dependence. The beauty of Minka is that it can be adapted to suit different age groups, so we can create multi-generational communities.”
It’s clear that innovative thinking is already making a difference in this socially significant sector. Investors and developers who are willing to rethink the traditional approach to housing for older people will find a ready market: the challenge is to use design and technology to create housing that promotes activity, independence, and integration. If the real estate sector can deliver on those criteria, the downsizers of tomorrow will have the perfect places to go.
Download our latest white paper, Real Estate and the Ageing Population, for more insights and analysis.
About Dominic Wilson:
Dominic is co-founder and managing partner at Pi Labs. He leads the firm with a specific focus on investments and investors. He also sits on the boards of Brolly, FalconDHQ and Office App. Dominic has a wide background in Private Equity Real Estate worked with both AEW Europe and Savills Investment Management and transacted over €3bn of deals across Europe. Dominic has a degree in Law with French from the University of Birmingham and an MBA from the London Business School.
About Pi Labs:
Pi Labs is Europe’s first VC firm to focus exclusively on proptech investments. It has established itself as a pre-eminent global leader in the early stage domain in this vertical. To date, it has made 34 investments including Brolly, Land Insight and Plentific. Pi Labs is global in its focus – it has backed founders from 18 different nationalities and its portfolio companies have raised in excess of £85m. Pi Labs has become the centre of the property innovation ecosystem with a deep track record in real estate, technology and investment