Business & Policy Economics Investors' Billions Are Chasing the Baby Boomer Market By Lloyd Alter Design Editor University of Toronto Lloyd Alter is Design Editor for Treehugger and teaches Sustainable Design at Ryerson University in Toronto. our editorial process Facebook Facebook Twitter Twitter Lloyd Alter Updated November 18, 2019 If you build it, will people come?. (Photo: Shutterstock) Share Twitter Pinterest Email Business & Policy Corporate Responsibility Environmental Policy Economics Food Issues If you are in the real estate business it's hard not to look at the 72 million baby boomers and think that this is going to be a giant market. According to Peter Grant in the Wall Street Journal, "Developers and senior-housing companies have spent billions of dollars over the past five years to build facilities that provide housing, food, medical care and assistance for the elderly." There is only one small problem: Not too many baby boomers, the oldest of whom are 73, would consider themselves elderly. Grant keeps using the word, as do most developers, which is why they have a problem: ...this wager on elderly care is falling short of expectations, and there are concerns that it could become one of the biggest real-estate miscalculations in recent memory, some analysts suggest. We pointed this out last year in Baby boomers aren't buying senior housing, that there was a fundamental misunderstanding of the demographics, writing: ...these developers didn't look at the numbers, and they jumped the gun. Most people don't go into senior housing until they are well into their 80s. But marketers and builders looked at all these aging boomers and thought, if we build it, they will come. But the baby boomers are still driving their cars and still going to work and some are still raising kids. They are simply not the demographic that needs this stuff. Yet. In fact, as older people are staying healthier longer, the age at which they move into seniors housing is going up, now around 85 years old compared to 82 a decade ago. So the oldest baby boomers might not start moving into them for a dozen years. The baby boomers who are downsizing and moving are not going into seniors buildings; they are moving downtown into new apartments that were built for the millennials and occupied by their parents. Patrick Sisson writes in Curbed: While the real estate preferences of millennials and young adults get the bulk of media attention, older renters actually have as much or even more to do with the last decade’s upswing in downtown urban living. According to the Urban Land Institute’s latest Emerging Trends Report, urban growth has come from two distinct age groups. Over the last decade, the urban population of 20- to 29-year-olds grew by 4.7 million. But during the same time, the number of 55- to 64-year-olds living downtown grew by 10.3 million. It turns out that baby boomers like downtowns for the same reasons the kids do: They can walk to stores and restaurants and don't have all their money tied up in mortgages and cars. They may not want to stay in their big suburban homes, but they don't want to hang around with old people in a retirement home. Peter Grant of the Wall Street Journal notes also that another reason that older people aren't moving is that technology is letting them stay in place. Venture capital and other companies are expected to invest about $1 billion this year in “aging-in-place” technologies that are starting to enable seniors to enjoy similar living standards and access to care in their own homes...New products and services include sensors that respond to a range of medical conditions, facial recognition for identifying visitors. I fell down and I can't get up!. (Photo: Apple) Here again, as we wrote previously, almost all of these things are already available in my iPhone and Apple Watch. We are already in the Apple, Google or Alexa ecosystem. They know who owns their watches and phones and are catering to them with health apps and fall detectors. These investors are designing stuff for our parents with their Jitterbug phones; I want my iPhone 11 Pro. And of course, all of this really only applies to the rich, the quarter of the U.S. population who have enough money for Alexa, Siri, Apple watches and trendy apartments and personal trainers. As one study noted, "While many of these seniors will likely need the level of care provided in seniors housing, we project that 54 percent of seniors will not have sufficient financial resources to pay for it." But then, like Angie, I have never understood Smart Money. Instead of investing billions in fancy seniors real estate and technology, perhaps we need to think about the scale of the issue 10 years from now, where are the 60 million old-old boomers going to live, how they are going to get around, and who is going to take care of them or pay for this all. It is going to be a very different picture than what we are seeing now.