As leaders in the longevity market, most of us work to develop products and services that support America’s growing aging population. Be it new apps that provide easy transportation solutions or wearable technology that monitors one’s movements from afar, we’re making both aging in place and senior housing better than ever before.
But what about those seniors who don’t have a home at all?
While rates of homelessness drop around the country, there is one sub-population whose homelessness continues to increase: the aging. The population of sheltered homeless seniors (62+) in the U.S. grew from 2.9 percent to 4.7 percent between 2007 and 2016 (United States Department of Housing and Urban Development). In some places, seniors account for 10 percent of the homeless population—and in places like Los Angeles, up to 20 percent. In fact, in Los Angeles, the number of homeless seniors shot up 22 percent this past year while overall homelessness declined. Which begs the questions: Why? And what can we as a profitable business sector do about it?
When you talk to Brandi Orton, gerontologist and director of government relations and advocacy at St. Barnabas Senior Services in Los Angeles, you can get a sense she’s frustrated. Having worked in the senior services industry for more than a decade, she’s seen her share of homeless seniors. She’s gotten to understand the reasons driving today’s aging to shelters or—more likely—the streets. But while many of us assume that the reasons for homelessness are things like addiction, a lack of affordable housing, and mental health issues, a lack of adequate financial education may also play a role.
“More affordable housing is not the only answer,” Orton says. “It is too expensive and takes too long to build. We live in an age-denying culture. We need to acknowledge the truth of how much it costs—and what it takes—to healthfully age.”
Indeed, when it comes to financial readiness for aging Americans, there appears to be a severe disconnect. Forget lofty 401Ks and retirement budgets. Under the official poverty measure, nearly 5 million adults age 65+ lived in poverty in 2017 (9.2%). The rate of people 65+ filing for bankruptcy is three times what it was in 1991. More and more, seniors appear to be unprepared for living as long as they are—be it due to rising debt, an upside-down economy, mounting healthcare bills, or decades of unsuccessful—or nonexistent—financial planning.
“We have to remember, this idea of ‘aging in place,’ is a new one,” says Orton. “As a society we have never had to live as long as we’re living, and many of us simply aren’t prepared to do it.”
It’s not just today’s Boomers who are at jeopardy of financial pain and homelessness. As The New York Times recently wrote, the retirement prospects for many younger baby boomers and members of Generation X look “dismal,” as they face a future without pensions—DIY 401K accounts, and a growing gig economy that provides little personal benefits, such as healthcare, healthcare savings, or employer-matched retirement accounts. Which means at the rate we’re going, senior homelessness is only going to get worse—not better.
So, how do we get people—including young people—to understand what it takes to live a life of longevity before it becomes a problem? The answer to that question could hold tremendous business opportunity for all of us.
In business terms, curing homelessness is a no-brainer. Studies have shown allowing someone to remain chronically homeless can cost taxpayers $50,000 per year—per homeless person. In Los Angeles alone, which has some 5,000 homeless seniors, that equates to $250 million. That’s money that could be circled back into the local economy, including businesses like yours, if the problem could be solved. As the industry’s thought leaders, we can we can find so many places to jump in, and profitably. The following are just a few ways.
Find new ways to teach awareness. “When older adults’ needs go unmet, they often go unmet in the dark,” says Orton. “Where is the uproar?” And how, I might add, could your company help add steam to that uproar by building awareness around that issue? What about education programs for real estate agents? Government workers? Technologists? Automobile designers? Retailers? Architects? All of these companies need to get a better awareness of what aging today looks like in America, and your company could be the one to share that message.
Find new ways to teach personal responsibility. And not just in terms of making our homes more accessible. “At the end of the day, the ramp is not the problem,” Orton says. “Homelessness doesn’t just happen. It is culminated through a series of life events. Maybe someone never had money in the first place. Maybe they lost it due to a medical event or because they didn’t manage it well—or maybe they just didn’t care. We need people—starting with our youngest people today—to understand that where they end up is an accumulation of all of the decisions they made in their lifetime. We need them to make better decisions.”
On the business side, there is tremendous growth opportunity in this area alone. One could create a new type of joint retirement/senior housing account; create a specialty of accounting dedicated to senior financial readiness; build apps that help seniors stay aware of their financial situation and offer ways to improve it—or even build educational programs surrounding aging that could be incorporated into our school systems and universities. The opportunities for helping all Americans—not just seniors—to plan for their older years is endless.
Find new affordable ways to “do” universal design. As Orton noted above, aging in place as we know it is a new phenomenon. People are living longer than ever before, and neither they—nor our cities or broader government—are prepared for it. As such, consider the business opportunity in universal design. In today’s market, a company who finds an affordable way to “mass produce” accessibility would have business for decades—both in homes and homeless shelters that were built without an influx of seniors in mind.
Find new and innovative ways to “do” housing. “It costs $500,00 per unit to build affordable housing in Los Angeles County,” Orton says. “A market rate developer could build at half the price and eliminate much of the hassle of working with local government to development property.”
One company, Flyaway Homes, is building affordable housing via shipping containers at half the price of government agencies in 1/5 of the time using private investment capital. The company offers investors a modest return of 5 percent to invest in its affordable communities. What if you found a way to offer a higher return or create a better product? Or thought of a totally different solution altogether?
“The issue of affordability presents opportunities for us in senior housing to develop new and profitable business models we simply have not imagined yet,” says Dan Brewer, Chief Fund Manager at Senior Living Fund, a private equity fund that invests in assisted living and memory care communities around the country. For instance, senior housing communities could begin forming relationships with their local communities earlier on in life, helping them set aside money for their future senior housing needs, or even offering their own private senior care insurance to young people wanted to ensure they are safe and well-cared for later in life.
Remember: longevity should be central to every business conversation. It doesn’t matter if we work in technology, financial planning, in-home nursing, or senior housing. As leaders in the longevity market, we need to consider all aspects of longevity—including how to ensure that our aging continue to do it well—in every business decision we make. After all, without financially strong seniors, many of our businesses would not exist.
As with most issues in aging, homelessness prevention is a complex one. No single company can solve it, but working together, we can certainly improve the odds. We can find a way to make a new generation of young people care about where they’ll be, and how they’re living, when they turn 85, or—more likely—well past 100.