Baby Boomers Can Make an Impact in Multifamily
Millennials are grabbing all the front page multifamily headlines, but the industry should look inside a little deeper at a demographic that is already making news and plans to stay in the limelight for the next several years. So says one well-respected apartment market official.
Baby Boomers are the new hipsters in rental housing, says Russ Webb, vice president of the Atlanta and Georgia apartment associations, and they’re here to stay. But is the industry capable of giving these new renters what they need?
“Absolutely,” Webb told inquiring minds at RealWorld 2017 in Las Vegas. It’s just that multifamily needs to redirect its focus to cater to a group that’s downsizing and choosing a more convenient lifestyle.
As Boomers trade or augment home ownership to enter market rate, active-adult, senior, and assisted living communities, their impact will undeniably be felt the strongest in multifamily, Webb says.
“This generation’s presence in apartment living is growing due to a desire to shed the burdens of homeownership,” he said. “In my experience, boomers want to be close to upscale restaurants and shopping. They want high-end finishes and plenty of organized social activities.”
Boomers already account for half of U.S. rental growth
The facts that support Boomers’ potential impact aren’t fake news.
CNN says that by 2030, those born between the mid-40s and mid-60s will make up 19 percent of the population – a 6 percent increase from today. In fact, the number of Americans 65 and older will reach 88.5 million by 2050, more than double the estimated 40.2 million in that group in 2010.
“We’re forecasting an increase in 55-plus households from 30 million currently to 50 million in 2035,” says Jonathan Spader, Senior Research Associate for the Joint Center for Housing Studies at Harvard University.
Already, Boomers make up a demographic that has accounted for more than half of U.S. rental growth the past 10 years.
Demographic will have widespread impact
Webb says that Boomers are looking for the right combination that better fits their lifestyles, and a lot of times it’s apartment living. In some cases, they are maintaining their home in the suburbs and renting downtown, trading a few days for big city life or being closer to kids who choose walkable lifestyles in urban settings.
“They want to have a presence in town so they don’t commute late at night or want to stay downtown for the weekend,” he said.
How and where older adults choose to live will have widespread implications for the different ways homes might be designed, Webb says.
Reaching Boomers requires a different approach
So why not focus just on Millennials, who seemingly represent staying power with their younger age? Boomers represent a bit of a cash cow that likely won’t seek a greener pasture.
Webb says Boomers aren’t looking for concessions and are less likely than younger renters to jump ship after one lease. Also, and this is a big one, Boomers have money. Some are lucky enough to have pensions, and many others began saving when 401Ks became the lead investment story. Simply, they don’t need mom and dad to pay rent.
Fortunately, marketing to Boomers is similar to attracting Millennials, with just a few tweaks.
Like their younger cohort, Boomers desire cutting-edge fitness centers and high-speed Internet, Webb says. They are quite fluent in technology, so online reputation management and social media presence are important to reaching them.
But on the contrary, Boomers still like their own cars and plenty of space; they covet parking and big apartments. Also, according to J Turner Research, a quiet environment is more important to Millennials, and like everyone else they desire pet amenities.
They are a bit old-school when it comes to getting their attention, however.
“Operators might also consider ‘low-fidelity’ tactics like billboards, direct mail, and ads in local newspapers and publications,” Webb says.
Oh, and one other thing. Boomers aren’t overly patient. They want immediate service and don’t want to wait two or three weeks for a maintenance request to get completed.
Remember, most have resources, and that means they can easily find someplace else to live if they aren’t satisfied.
Behold the Boomer while you have the chance.