Challenges and opportunities of an older population
In most developed economies, over 20 percent of the population will be aged 65 and over by 2025, rising to over 25 percent in 2045. This increased longevity is a by-product of many factors, including improvements in healthcare and changes in lifestyle. It presents both new opportunities and challenges for society as a whole. I recently moderated a fascinating full-day Urban Land Institute conference focused on later living. The event represented the ULI at its best – collegial, engaging and provocative. The following were some of the key takeaways.
Longevity and fertility
Dr. George Leeson, one of our keynote speakers and director of the Institute of Population Ageing at Oxford, reviewed the demographic transitions that affect populations worldwide, in particular declining fertility and increasing longevity. We are currently adding 2.5 years to our lifespans every decade; the 21st century might be the last period of relative youth. On the other hand, we are constantly redefining the concept of what it means to be ‘old’ and reconsidering what is a pensionable age. We are entering an age of pluripotentiality; older populations are increasingly productive and capable compared to their cohorts in previous generations.
Urban realm
Glenn Howells, founder of Glenn Howells Architects, led a thoughtful panel focused on implications for the urban realm and how various industries react and adapt to meet changing demands. The most promising solutions are cross-disciplinary and cross-generational. We are increasingly considering the potential risks of robotics and artificial intelligence. Related developments may be driven by Millennials, but it will be older populations that nudge greater adoption of AI-enabled technology, including driverless cars and intelligent appliances and prosthetics.
New approaches
A nursery school and a retirement home are collaborating on innovative programming that combines childhood education with later living residents. The youngest children and the oldest residents learn from each other in fascinating ways. Judith Ish-Horowicz, the principal of Apples and Honey Nightingale Nursery, Alastair Addison, director of activities at Nightingale Hammerson, and Fay Garcia, a 91-year old pensioner at Nightingale Hammerson, spoke of the quality of the community and the ‘butterfly moments’ when serendipitous occurrences made the place extraordinary. These programs are also opportunities for trialling, researching and measuring emerging programs.
Housing with care
Richard Meier, a partner at Argent and chair of the ULI Residential Council, led a productive panel that explored the emerging typologies of so-called retirement housing. “Housing with care” encompasses residential types that offer a range of assisted care, hospitality offerings, value and tenure. There is perhaps no other real estate typology where the occupant needs change so dynamically. Perhaps like any single-demographic asset class, there continue to be poor associations and stigma attached to solutions that are uniquely intended for older people. Perhaps one of the most interesting developments is the increased interest in inter-generational living. These examples define new and surprising aspirations – the chance for different age groups to learn from each other and benefit economically. Aligning interests is the way forward. There are new delivery models for housing with care, including co-living and build-to-rent.
Workplace
James Franks from Gensler discussed implications of older generations in the workplace. For the first time in history, four generations are active in the workplace. The experienced aging worker is an increasingly attractive demographic, and James noted that even now, 11 percent of the workforce will be productive well into their 80s. The rise of the sharing economy, enabled by technology, will create environments that will help these workers get what everyone else also seeks in the workplace: purpose, flexibility, community and convenience. There are emerging co-working developments that are specifically catering to an older range of workers, and these will ultimately create a broader, better workplace for everyone.
Co-housing
Loneliness is a health risk factor for all ages, equivalent in impact to living with diabetes. Nick Henley, a founder of CoHabitas, has developed an online service that helps people aged 35 and over find like-minded people for house sharing. The aging population increasingly seeks to downsize to increase access to amenities and improve standards of living. Co-housing and co-living represent new aspirations as well as a wider understanding of potential financial, health and social benefits related to sharing assets. House sharing is also presenting itself as a solution that addresses wider social issues, including increasing the stock of housing for the wider population.
Demographics
Our other keynote speaker, Amlan Roy, senior managing director at State Street Global Advisors, reviewed the economic impacts of an aging demographic. He emphasised that the twin characteristics of declining fertility and increasing longevity affect emerging economies and Asian countries in particular at the moment. High growth and high costs associated with aging populations will have profound implications for national debts, investment priorities and urban patterns. Amlan outlined asset classes that would benefit from an aging population. To adapt to the changing context of aging, he also advocated abolishing mandatory retirement ages, closing gender gaps, rethinking immigration policies and outsourcing non-core jobs.
Mobility
Hugh Roberts, chair of the ULI Infrastructure Council, led a panel that explored land use implications related to mobility aids of particular interest for older citizens such as Uber, smart card ticketing and driverless cars. Many of these advances promise to reduce road and parking requirements – major land takes in cities. The panel noted that many of the mobility promises cause ‘wow-fatigue’. There is a gap between ‘should’ and ‘could’; full benefits of level-five vehicular autonomy are still many years off, for example. Some of the promises of driverless cars, like eliminating the number of vehicles on roads, may not be fully embraced by vehicle manufacturers and fleet operators – these groups sell consumption and are motivated by inducing rather than reducing demand for mobility.
Capital markets
Rob Martin, research director at Legal & General IM Real Assets, led a panel of investors, lenders and policy makers that reviewed different revenue models, risks and realities of housing with care. They observed the rise of the rental sector but noted that in the UK it lags behind other countries, especially the US. They discussed the pros and cons of various charging models, for example sinking fees vs. ‘event fee’ (equity release when exiting the development). But even with the rise of high-value products, co-living, and emerging rental models, there will still be challenges when serving a market (average age 78 years) that is still hard-wired for single home ownership.