Stepped-up Growth Seen for Elderly Rental Market

Builders of multifamily housing projects should give “serious consideration” to the burgeoning number of senior citizens because most will be renting instead of buying homes during the next several years, a real estate consultant says.

Michael L. Meyer, managing partner of the Newport Beach office of real estate consultancy Kenneth Leventhal & Co., told a group of mortgage bankers recently that the elderly market “represents the largest number of renters, and will continue to grow over the next several years.”

The number of households over the age of 65 is expected to increase at a rate of 360,000 annually over the next 10 years, Meyer said. As a result, he added, “designing projects and selecting locations to meet the needs of older renters could prove very profitable.”

Builders in the Southland and other parts of the Southwest could be particularly big beneficiaries of the fast-growing elderly population because many older people prefer the region’s warmer climate, Meyer said in an interview.

Congregate-care and skilled-nursing-home facilities are overbuilt in some areas, Meyer said. But conventional apartment buildings that contain a few special amenities for active retirees look particularly promising.

“The plain, moderate-income rental project isn’t glamorous,” Meyer said. “But it’s a good, bread-and-butter project that, with a few added services, could provide (owners with) rents that are higher than they’d get if they had a bunch of yuppies living there.”

Among the amenities owners should consider providing are large common areas, pool, card room, and frequent social excursions, Meyer added.