This is the second part of a two-part conversation with Arthur C. (Christian “Chris”) Nelson, professor emeritus of urban planning and real estate development at the University of Arizona, as well as presidential professor emeritus of city and metropolitan planning at the University of Utah. Part One is available here.

More about Dr. Nelson and a link to the paper that inspired this conversation at the bottom of this post.

Ben Brown: Summarize for us, Chris, what you outlined in Part 1 of this conversation.

Chris Nelson: In normal times, younger people provide the demand to buy the homes of older persons and thereby sustain the supply-demand balance. But because of the enormity of the boomers’ generation, combined with their preferences for where and how to live, they have had oversize impacts on the housing market especially between 1980 and 2010. During this period, boomers preferred to raise their families in larger homes on larger lots mostly in the suburbs. 

But now boomers are throwing their demographic weight in another direction. Since around 2010, when the oldest boomers began turning 64, they’ve begun passing through the empty-nesting stage and into a phase where many – especially those whose wealth allows them to pick where they want to live – are downsizing and opting for convenience and quality of life. Which means more manageable square footage closer to services, especially to services that don’t require a car for every trip. Which also happen to be the preferences of many of those in younger generations seeking or already living in smaller homes and apartments in walkable communities.

All About the Math

BB: So it’s all there in the math?

CN: Right, it’s about numbers – and geography. According to this study from Harvard University’s Joint Center for Housing Studies, even if all new housing units built from 2018 to 2038 were in walkable communities, increasing from about 28 million to 63 million, a little more than half the preference for homes in walkable communities would be met.  Even more illustrative of the problem is this: We know from industry, government, and academic surveys that of the 50 million senior households projected for 2038, 74 percent, or 37 million of them are likely to prefer to live in a walkable community. Yet, they are the ones who dominate non-walkable suburbia. 

BB: So wealthier boomers will escalate demand for small-scale housing in close-in locations where the supply-demand gap is already acute. And less-well-off boomers will be stuck in homes they can’t sell for the money they need to move to more age-friendly situations. You call what they potentially face a major “short-sell” risk. 

Meanwhile, the younger generations, who entered career-building and family-forming stages of their lives in an era of social, political, and economic uncertainty (the Great Recession, the pandemic, political turmoil), find themselves competing for the homes they prefer in the places they want to live with an older generation that’s bigger and richer.

CN: Yes, there will soon be too many sellers of senior homes for too few buyers across large swaths of America—although not in the more robust housing markets where continued economic growth can accommodate new demand. Most places will feel effects of these demographic shifts. But some will feel it far more intensely than others. Take a look at this graphic:

The areas in red are where population is projected to decline from 2020 through the 2030s, or the growth in the number of those becoming seniors will be equivalent to 75% or more of the counties’ growth. In all, more than half of the counties in the contiguous U.S. seem likely to face this risk of over-supply of senior homes. 

My colleague, Robert Hibbard, and I estimate that more than 40 percent (1,241) of U.S. counties are losing population. Another 14 percent (429 counties) are or will become “senior dominant” where more than 75 percent of all householders are 65 years of age or older. In 2020, these counties accounted for nearly 80 million or about a quarter (24 percent) of the nation’s 330 million residents. These are places where seniors have the greatest risk of facing short-sales.

Aging in Place?

BB: What about the “aging in place” strategy that so many seniors say they prefer to moving in their later years?

CN: I think the question, again, is about numbers. How many of those 80 million seniors in at-risk locations can we expect to stay where they are and piece together the support they need for aging in place?

Many – maybe most – live in situations likely to become increasingly untenable as they grow older. So they’ll either have to adapt their current households and their access to care or move somewhere that offered supports already in place. Eventually, when a person or partners cannot manage their place, and if there is no market for their homes, they may have no choice but to age in place even if they don’t want to. That number is likely to be in the millions.

We don’t have to wait to see the impacts of that pressure on families and social service systems. Many of us have families and friends struggling with those tough choices now. It’s only going to get tougher. So when we’re tempted to tout “aging in place” as a solution for the problems and for the numbers of people we’re talking about, we have to recognize success on that strategy depends on building capacities and making investments faster and in larger scale than we’ve attempted up until now.

BB: What would those changes look like?

CN: Let’s start with the aging-in-place challenge. While I have reservations about encouraging unrealistic expectations, I believe we should make the option more attainable where it makes sense. For instance: 

There are already programs for in-home modifications to help seniors remove or mitigate barriers in their personal spaces. There’s a growing market for Universal Design products such as bathroom grab bars and kitchen cabinets that move shelving within easier reach. Those efforts deserve more support. 

But ensuring that places support the goals of aging populations is about more than fixing barriers within individual homes. For most seniors, maintaining independence for as long as possible is at the top of their lists. And that’s going to require access to what they need outside the home without having to drive a car for every errand.

Bottom line: We have to improve opportunities for seniors where there will be an oversupply of homes unsuitable for aging and greatly increase the supply of housing options in better connected communities already in high demand.

Models Worth Expanding

BB: Although not yet on the scale required, there are policy and planning models already underway, right? 

CN: Yes. New urbanist designers and planners are encouraging projects that “retrofit suburbia” to provide walkable mixed-use environments, often in abandoned or out-of-date suburban malls that already have the infrastructure and transportation networks to better connect homes and services. 

In the high-demand neighborhoods in well-connected metros, the need is for much more housing of all types, including accessary dwelling units (ADUs) both inside and outside existing homes and the ”missing middle” array of duplexes, small apartment buildings, and other building types that disappeared in the rush to suburbia and with overly restrictive zoning policies.

BB: Any specific examples?

There have been some remarkable efforts in recent years to expand the supply of housing in existing neighborhoods, whether it’s from allowing by-right ADUs or by effectively outlawing single family only zoning. Since 2019, Minneapolis has allowed up to three units on single family lots by right, including retrofitting existing single family homes into duplexes and triplexes. Since the early 2020s, Oregon has allowed 4-plexes and townhomes by right on single family lots in most jurisdictions. In 2021, Utah allowed “internal” ADUs by right in most single-family homes. It also goes one step further by overriding deed covenants, conditions, and restrictions (CC&Rs) and home owner associations (HOAs). For the past decade, California has increased by-right new and retrofit ADUs including property splits allowing each unit of an ADU to be its own deedable conveyance. 

Several other states are considering legislation that do many of these same things. Arizona, for instance, is considering allowing multifamily developments by right on any commercially zoned property within two miles of a rail transit station. We also see private investors and developers leading the way to convert shopping malls, strip centers, and office buildings into housing—though often running up against inflexible zoning codes. A friend of mine who happens to be an award winning developer is fending off residents of adjacent condos and townhouses who don’t want him to add ADUs to his proposed infill project in Salt Lake City. 

But let’s not forget about the exurban and rural areas noted on the map where there won’t be enough buyers of seniors’ homes than there are seniors who will be vacating them as they age and pass along. We need to consider policies to “right-size” the housing supply to rebalance housing markets in those areas. That may mean public acquisition of surplus homes and converting them into open spaces, for instance. There are successful models for making this work so we’re not inventing anything new other than expanding the application to different kinds of landscapes.

Impacts of Remote Work?

BB: There’s been a lot of talk about a work-from-home movement that might accelerate  demand for housing in areas beyond metro job centers. Is that a potential counter-balance for the oversupply of large-lot senior homes?

CN: There was a brief moment during the COVID-19 pandemic where the exodus of people from cities was seen as a boon to lagging areas. Data, however, show that these relocations occurred mostly within the same metropolitan areas and within commuting range of jobs. Moreover, something like three-quarters of households are place-bound because they cannot work from home. 

BB: So no quick and easy path?

CN: My own sense is that policy is not changing fast enough to meet the challenges of vast demographic changes, mostly because policymakers don’t know the numbers. But even those who hear the numbers don’t believe them for ideological reasons. The challenge is enormous as the risks of massive housing market collapses in large swaths of America increase with every passing day. 

Dr. Nelson is the author of more than 20 books and 300-plus other works. He’s been the principal or co-principal investigator on more than $50 million in grants from the National Science Foundation, the U.S. Department of Housing and Urban Development, the U.S. Department of Transportation, Brookings, and the Urban Land Institute, among others. The only person who is both a Fellow of the American Institute of Certified Planners (FAICP) and a Fellow of the Academy of Social Sciences (FAcSS), Dr. Nelson has been a practicing planner, researcher, advisor, and educator spanning six decades from the 1970s into the 2020s.

For a more complete presentation of these issues and the research that informed them, see: 

Nelson, Arthur C. (2020) “The Great Senior Short-Sale or Why Policy Inertia Will Short Change Millions of America’s Seniors,” Journal of Comparative Urban Law and Policy: Vol. 4 : Issue 1 , Article 28, 473-528. Available at: https://readingroom.law.gsu.edu/jculp/vol4/iss1/28

— Ben Brown