Aging in place is reshaping housing demand — and most homes aren’t ready

Editor’s note: This interview has been edited for length and clarity.

Jonathan Delozier: As aging in place shifts from a lifestyle preference to a financial necessity, what’s driving the trend the most — housing costs, long-term care costs, all of the above or something else?

Cameron Carter: I think there’s two parts. One, there’s a financial component around institutional care and the cost of receiving that care. Skilled nursing facilities are increasingly more costly and prohibitive. Long-term care is extremely expensive and you also need to think about long-term care capacity. You see some states where they have a two- or three-year wait list to get into assisted living, so you’re trying to find ways to age in place before you’ll even be able to get into preferred institutional care.

The other thing that I see is something I think does not get written about, but it’s really on the social contract of this country. For the first time in U.S. history, you have a number of African Americans, South Asians and Latin American families who do not subscribe to aging in a facility as part of their culture. These families are preparing for multigenerational housing.

I grew up in Compton, California, where homes next to my high school are a million dollars. These are families of people who are teachers, where even if they were to sell their home, they couldn’t afford to buy another home in the same community.

Delozier: When you look at today’s housing stock, is there a ballpark percentage of homes that you think are realistically fit for aging in place without modification?

Carter: I’d be shocked if it was above 5%. Ninety percent of housing was built in this country before the Americans With Disabilities Act (ADA) was even a law, and the ADA only applies to public spaces — not private residences.

When we think about where the 5% number comes in, it’s because in apartment complexes in most cities are only required to have 5% of their housing units to be accessible. That’s why you see, even in hotels, not that many accessible units.

It would behoove us to have a much more accessible housing stock. It would behoove us to have a much more accessible retail stock as well — not only because anyone can use it, but because this growing older adult population is the wealthiest population in the country. They are needing these types of accommodations to be able to travel, to have leisure and to be able to experience life.

The only real industry that’s built for that is the cruise industry, which has an accessibility mandate — at least 20% of their rooms have to be accessible on any given ship. That’s not what you see in housing today. That’s not what you see in condo buildings today. You see almost the opposite, which is, “How can I have the least amount of accessibility?”

Delozier: What do you think keeps the status quo that way?

Carter: I think there’s a misunderstanding of who the buyer is. There’s still an assumption that we build homes and when someone turns 65, they sell it to a family in their early 30s who is going to renovate it for aesthetic needs. Then they’re going to live the next 30 years and it’s just going to rinse and repeat.

Think about the term “aging in place.” There’s the health care version of it … where people need to recover in their home. There’s also the aging-in-place narrative you see with Zillow and Redfin, which is older adults not turning over their housing stock. Now you have a new demographic that looks at their home not as a starter home where they’ve got to raise their 3- and 5-year-old kids, but a home where they now have to think about memory care. They have to think about multigenerational housing. I went back to where I grew up in California last year, and there are more homebuyers in the market over the age of 70 than under 35.

There are 15 states right now where there’s more people in the state over 65 than under 18. So, this demographic will continue to shift. If I’m a developer and I’m still building the way that I think this country is operating, that misunderstanding is causing me to miss this massive market.

Delozier: How do you think real estate agents, mortgage lenders and other housing professionals should be factoring accessibility and adaptability into their marketing efforts and other communications?

Carter: Great question. I’ve seen particular groups show up with what’s called a senior real estate specialist. It’s a new type of certification where you’re seeing agents who are specializing in what used to be downsizing homes. Now, it’s really just finding accessible housing. It’s helping individuals navigate not only buying a home in a 55-plus community, but finding one where there’s a health care provider nearby. That is a whole new real estate specialist that didn’t exist even 20 years ago.

Another group I see a lot is senior moving managers — folks who help people actually relocate from different parts of the country with people logistics. When I think about the marketing piece, I think there’s something to be said about the terms “accessibility” and “home modifications” still not rolling off the tongue. There’s a world where marketing could really show up to help people understand what it means to be fully independent as much as possible. We’re just not there, because with media and marketing, we’ve really had a negative connotation on aging and with accessibility.

For folks who are looking at this area, there’s massive opportunity. Smart home technology came out of accessibility work and senior support work. Autonomous vehicles came out of work with elder care. These agents in the housing space have a role to play when you think about someone who’s 70 buying a home, and who expects to be there for the lifespan of the mortgage. They used to not be a demographic 30 years ago.

Delozier: Where do you see the biggest gap between what families assume aging in place requires versus what actually needs to happen in the home?

Carter: I would say that the gap is the integration with your health outcomes. In America, we build about 35 different styles of housing, from craftsman bungalows to row homes to McMansions, but it’s hard to say.

If I’m someone dealing with dementia, what’s the best housing stock for myself? If I’m someone who’s had total knee hip replacement, where is the best place that I can live? The thing is, most people in America are not going to have another home to buy or vacation in. They’re already in the home that they’re going to age in. So starting with a clinical plan is a big gap that I think a lot of people miss — because now you’re having the conversation of person, environment and what is the fit between them.

When you do a housing inspection, or when you buy a home or a rental property, you’re just looking for damages. You’re not looking for physical barriers that impact my frailty as an individual at age 70. That question doesn’t really show up.

Delozier: Fast forward 10 years — what does an optimal aging-in-place housing system look like, and what policy changes would you like to see?

Carter: If we go 10 years out, the Joint Center of Housing Studies at Harvard University expects one in three households to be headed by an individual 65 years and older. Not just living there — headed by someone 65 or older. You’re looking at 50 to 80 million homes at that point.

What I would hope is that we have a much more integrated system between health care and housing — so we can better identify the right housing for the right individual, given affordability challenges and being more sensitive to the fact that people want to live in more community. They don’t necessarily want to live in a single-family home in the suburbs.

I think what will be helpful is updated zoning laws, so we’re able to actually convert commercial real estate into residential housing sooner and quicker with subsidies. You see this a lot in places like St. Louis and Detroit, where you have a lot of housing stock that could be available but the zoning laws disallow it. You have areas that, unless you have deep gentrification and private investment, they’re never going to be supported. But you have people who want to live there.

On a federal level, there’s leveraging illiquid capital for aging-in-place needs. Things like early withdrawals from 401(k)s for specific medically necessary home modifications matter a lot. For somebody who is not able to take a withdrawal from their 401(k) before Medicare Advantage — a lot can happen in that period of time. Allow individuals who have gone through the right steps, been disciplined and been frugal to be able to have earlier access to funds.