Boommates -- Seniors living together (from Bloomberg)

Call them “boommates.” 

Surging costs for housing and other expenses are prompting baby boomers to take on roommates. A Harvard study estimates that almost a million Americans over age 65 now live with unrelated housemates ("NYC's Rent Surge Drives 86-Year-Old to Move in With a 'Boommate'"). 

To make ends meet, an increasing number of those 65 and older are choosing shared housing arrangements, helping save money in an era when many have fallen behind on retirement savings and there’s increasing concern about a loneliness epidemic.

... Versions of these shared living setups have existed for years, but they’re increasing in popularity as a surge in prices for housing, and pretty much everything else, coincides with the baby boomer generation entering retirement. There were 58 million Americans ages 65 and older in 2022, up from 43 million in 2012, according to Harvard’s JCHS. And a record 4.1 million Americans will turn 65 this year and every year through 2027, data from the Alliance for Lifetime Income shows. 

Even though inflation has cooled, senior adults are struggling to afford costs that have skyrocketed the last few years. In 2021, more than 11 million were cost-burdened, meaning they spent more than 30% of their household income on housing. While many retirees own their homes outright, others are stuck with high mortgage or rent payments. 

... In New York, rent has shot up 33% from pre-pandemic levels, and nationwide that figure is about 30%. For homeowners, increased costs for taxes, insurance and utilities have surged 26% since 2020. 

“We've seen an increase in older adults who are carrying mortgages on their primary homes including among people who are 80 and over,” said Jennifer Molinsky, a project director at Harvard’s JCHS. “And for those folks and for renters the cost burden rate is much higher. There's a much greater struggle with affordability. As we have more and more people in their eighties and over, that's a time when incomes really can't necessarily keep up with housing costs.” 

Impolitic to say, but I don't think senior housing is a good idea right at transit stations

A big new development of affordable homes, this time for seniors, is being eyed at a choice site a short distance from a busy train station in San Jose.

This article from the San Jose Mercury News, "Big affordable homes project for seniors eyed near San Jose train station," reminds me.  Although I meant to write about it earlier, in response to a project in Atlanta ("MARTA Sells Land to Columbia Residential for Development of Senior Affordable Housing at Avondale Station," Saporta Report).  From the SJMN:

A big new development of affordable homes, this time for seniors, is being eyed at a choice site a short distance from a train station in San Jose. The project would sprout at 390 Floyd St. next to Lick Avenue and across the street from Tamien Station, according to San Jose city planning documents. An estimated 134 dwelling units would be built on the site, which is slightly below a half-acre in size, the public documents show. “New construction of a 100% affordable senior housing development” is contemplated on the property, according to the proposal.  ...

The Tamien Station can be a busy transit site since it serves both the local light rail system and the regional Caltrain line. It’s also a few rail stops away from the bustling Diridon transit station in downtown San Jose.

Seniors use transit less, especially rail transit, because of the crowds and how fast the other riders move in and out of trains and crowd the platforms.  The point of adding housing at transit is to generate trips on transit.

Seniors also buy less.  If you want property as part of transit oriented development to be economically successful, it has to provide customers to the adjacent retail or that retail is less successful too.

I understand the issue of equity and access, but I think other types of uses have greater value when it comes to transit oriented development and station planning, especially immediately adjacent to stations, especially a site like at Tamien Station in San Jose, which will serve regional commuter rail and local light rail.

Senior housing needs vs. "the market" and government involvement: Part 1 - assisted living facilities in Montgomery County

The Gazette ("Assisted living centers in Silver Spring, Bethesda to close by June") and other media have reported that two senior care living facilities located located in the Bethesda and Silver Spring conurbations in Montgomery County, Maryland will be closing because the properties are owned by a health care related real estate investment trust, HCP (Health Care Properties) and they have been put up for sale.

Both of these facilities are centrally located and the amenities of the respective commercial districts are close at hand, which is a plus.

From the Springhouse of Silver Spring website:

Location, location, location. Springhouse is located near downtown Silver Spring minutes away from Washington, D.C. Our community is located near several neighborhood restaurants, banks, churches, synagogues, health and medical offices. Everything you want in an apartment building plus the knowledge that a licensed nursing staff is there for you 24-hours-a-day.

The operator is independent of the property owner, and so they have notified residents and the State of Maryland that they will be closing their facilities.

Note that it would be possible for the operator, Springhouse, to remain in the facilities.  They are choosing not to do so by taking advantage of the future sale of the real estate to shut down the two facilities.  Normally, the sale of the properties could be facilitated by having a long term tenant.

Financial engineering, real estate investment trusts and business vulnerability.  Note that this is but another example of how the disconnection of property ownership from business operations can have negative impact on business operations, although mostly we have seen this effect in the retail sector.

Real Estate Investment Trusts (REITs) are a preferred vehicle for owning real estate because they enjoy advantageous tax treatments not available to companies that integrate business operations with real estate ownership.

At one time the company called Manor Care, based in Silver Spring, owned and operated nursing home and other senior care facilities.  After (1) a merger and consolidation with another similar firm they became NCR Manor Care, (2) relocated to Toledo Ohio, (3) and were bought out by Carlyle Group--based in DC--about 8 years ago, (4) later, Carlyle sold the underlying real estate holdings of HCR Manor Care to an independent real estate investment trust, HCP, based in California, (5) while still operating senior care facilities in those locations, (6) but leaving the senior care company HCR Manor Care exposed and vulnerable to any changes in the real estate markets where its businesses operate.

Carlyle sold the real estate to HCP for more money than it spent buying all the stock of NCR Manor Care.

NCR Manor Care financial and legal issues.  Nursing home and other senior care facilities are being buffeted by changes in the health care industry, including payment rates for what is called post-acute care--when people are released from hospitals but still need ongoing care.

According to the investment website Seeking Alpha, there are 50 HCP properties operated by NCR Manor Care that have been deemed underperforming financially and/or operationally, and so it may be that these particular properties in Montgomery County are not generating the financial returns the company prefers.  Plus the firm is being investigated by the government, although this may come to naught.

It appears as if these two properties in Montgomery County are the first of the 50 properties to be readied for sale.

Alternatives.  I'd argue that public ownership of the land/buildings of senior living facilities could be in the public interest as a way to maintain the provision of such services without necessarily requiring the facilities to also be publicly owned.

Were there a wide ranging senior care/health and wellness plan for the area which provided guidance and recommendations concerning the provision of various types of care facilities, it would be possible for the state/county to step in, even use eminent domain authority to buy the properties to ensure the continued operation of the care facilities operated there.