Builders aim to please generation that won’t take retirement lying down
By Dick Hogan
Originally posted on April 16, 2007
They’re not their fathers’ retirement communities.
As 77 million Americans born between 1946 and 1964 are carried inexorably toward retirement, the new buzzword for builders is “active adult community.”
“What are the baby boomers going to want? Everything,” said David Schreiner, national vice president of active adult business development for Bloomfield Hills, Mich.-based Pulte Homes, at an Urban Land Institute symposium in Naples recently.
But putting up a community for youngish retirees can be tricky as generational preferences change, said Schreiner and other experts.
For example, Schreiner said, a lot of boomers are going to be working well into their retirement from full-time employment.
That’s already showing up in some communities, he said. “You go to a lot of our communities at 10 o’clock on a Tuesday morning and nobody’s there: they’re working.”
But the people are back in the evening and a retirement community still needs the facilities to give them something to do and let them socialize together, Schreiner said.
Jack Hoyos, a senior vice president for Levitt and Sons in Southwest Florida, said his company is increasingly taking into account that boomers don’t necessarily move to another city even if they are interested in an active-adult community.
“Statistically, only 15 percent of active-adult buyers move out of their own area,” he said. “The other 85 percent stay where they are, primarily because their children are still there.”
In addition, he said, “It basically provides for those who are still working. They don’t have to find another job” in a different location.
But the biggest draw an active-adult community can have is one of the simplest: paths and trails for walking, said Don Waltz, senior associate with Jacksonville-based Parker Associates, which provides market research to the real estate industry.
“The good news for you developers is that it’s the cheapest amenity to put in,” he told the ULI symposium.
Golf, on the other hand, is waning as an element of active-adult life, Waltz said. “It’s still in the top 10 but not in the top three like it used to be.”
Tom Oliveri, 71, who has lived for three years in the Levitt active-adult community The Cascades of Estero, said the lifestyle is perfect for him and his wife, Lois.
He reeled off the communities activities: bocce ball, tennis, mah-jongg, a fitness center.
“It’s like heaven,” said Oliveri, a former resident of New London, Conn., who retired 11 years ago. “We’re active people and you can do as much as you want or as little as you want.”
Some communities take that atmosphere of togetherness to an even more intense level, said Zev Paiss of Boulder, Colo.-based Abraham Paiss & Associates, a real estate consulting company that specializes in what’s called “cohousing.”
In that type of development, which can be either for young or old, “the idea is creating a livable community,” he said.
Usually such communities are populated by people who helped design it pre-construction, and who live interdependently: preparing some common meals, for example.
“Most of these communities have waiting lists,” Paiss said.
But not everyone thinks that the emphasis on shared experiences will be a good model for builders trying to woo boomers as the generation starts retiring in large numbers.
“It’s futile, absolutely futile,” said Carlsbad, Calif.-based demographer Phil Goodman of Generation Transitional Marketing. “They never wanted to be grouped together “” you may have some that will do it but the majority don’t want to and will never do it. They could put up any type of health equipment, anything that appeals to boomers, and they won’t do it.”
As the previous generation dies off, he said, “There will be more empty retirement community houses than you’ve ever seen.”
He suggested that as the boomers retire, a better approach would be to build smaller communities and market them as vacation homes. “I’d build it as a second home option. I’d leave the words ‘active adult’ out of it.”
Hoyos said Levitt is already tweaking its design of active adult communities. “Now we’re starting a new cycle.”
For example, he said, those being built now are more likely to have four smaller community centers than the big, centralized ones that prevail now. “One may be card rooms, another the fitness center, another the arts and crafts rooms. They make it easier for you to walk to it.”
But every change carries a risk, he said: Cliques can develop at the smaller centers, and they may be more expensive to maintain.
Another trend, he said, is to build active adult communities in places such as Atlanta that aren’t traditionally retirement destinations.
That’s because many boomers aren’t willing to leave their jobs even if they like the active adult lifestyle, he said. “Statistically, only 15 percent of active adult buyers move out of the area where they are. The other 85 percent stay there.”
Goodman said a lot of boomers may be staying close to their employers for a long time.
Between divorces and children born late in life, he said, “The boomers will be lucky if they retire as a generation in their early 70s.”