New Tech Will Let Seniors Age In Place 3 Years Longer. Here's What That Means For CRE
From food delivery apps to virtual communication and telehealth, technology has helped us survive the pandemic and made it easier to stay safe, cared for and happy in our homes. It also means that aging Americans who might otherwise have moved into assisted living or nursing communities are more likely to stay put.
“If the pandemic has taught us anything, it’s that smart technologies, sensors and systems, video chatting, and on-demand food and medication delivery have created a virtual kind of assisted living that’s going to enable older adults to stay far longer in their homes,” Joseph Coughlin, the founder and director of the AgeLab at the Massachusetts Institute of Technology, said on the latest Walker Webcast.
Coughlin estimated that all of the technologies that we now use have pushed back the move to senior housing by a whopping three years. That is, a 75-year-old who would have left their home for an assisted living facility might now wait until age 78.
Walker & Dunlop CEO Willy Walker, hosting the webcast, pointed out that those three years are also among the most profitable years of residency for senior housing owners, as older residents typically require more intensive care.
The deciding factor for when older adults move into senior housing is actually their children. When adult children feel that they can no longer provide their parents with adequate care on their own, they start considering moving their parents into assisted living. Many analysts had expected the age to move into senior housing to start creeping earlier, Coughlin said, as the primary caregivers to aging Americans — typically their eldest adult daughters — started having more economic power and more demanding jobs in the workforce. But technology has changed that calculus.
“With women now more educated, more affluent and more likely to be in the workforce, they are going to be relying on these technologies to augment their caregiving,” Coughlin said. “They’re going to be using those technologies as a care force multiplier.”
Perhaps the most remarkable part of the pandemic, Coughlin said, is how it has socialized Americans to use tech. Because we have been forced to communicate virtually and use virtual services, the adoption of new technologies has come far faster than it would have organically.
However, the news is not all bad for senior housing. Coughlin said that the real estate industry has an opportunity to bring more seniors in earlier by making senior communities more compelling places to live. He suggested that developers and owners take inspiration from social networks like Stitch that bring together older Americans around shared interests, affinities and activities.
“We know from sociology and from common sense that just because you’re the same age and you live next to each other does not mean that you are a community,” Coughlin said. “Affinity, whether it’s based on hobbies, vocations, former professions, belief systems — that’s the future for senior housing.”
Coughlin said the aging of America and other developed nations is not an impending crisis but a massive economic opportunity. People over the age of 50 represent over half of consumer spending and 83% of the total wealth in the world. Plus, Coughlin said, the baby boomers who are approaching traditional retirement age have been brought up in a world built for them, and they are likely to demand new products and services to keep them happy as they enter their 70s and 80s.
Senior housing and senior care providers may also be able to take advantage of a growing care gap. As adult children, especially daughters, gain more economic power and are more likely to move away from their hometowns, there is an opportunity for these providers to start building loyalty to their services.
“Go beyond the real estate,” Coughlin said. “The technology that is in people’s homes is a natural pipeline to bring your brand, your experience to the residents you want to bring back to your properties. We need to see technology not as a threat but as an opportunity to develop new skills, new services and new experiences overall.”
Because of outdated social norms, Coughlin said, we think of older people as unproductive and the needs of old people as driven by the need for care. But he said he believes that there is a great deal of opportunity — by housing developers, creators of autonomous vehicles, products and services — in recognizing that older adults have the same desires and flair for life that younger adults do.
Coughlin described how his team’s push to develop autonomous vehicles isn’t driven by a wish to get older adults to places like the doctor’s office or the grocery store. Instead, transportation can string together the experiences that give them joy, like the impulse on a muggy summer evening to go out and buy a soft-serve ice cream cone.
“How do we make a vehicle get you point to point, not just for the things that you need but for that ice cream cone?” Coughlin asked. “That want, that desire in that moment is how you measure quality of life in old age.”
Next week, Walker will host Hines Chairman and CEO Jeffrey C. Hines and Hines Senior Managing Director Laura Hines-Pierce. Register for the webcast here.
This article was produced in collaboration between Walker & Dunlop and Studio B. Bisnow news staff was not involved in the production of this content.
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