Such shifts in the American population will bring significant changes to America – from the way products and services are developed and marketed to this expanding audience to the types of homes people will choose to purchase – including where these homes are located. When baby boomers choose to relocate/downsize from their existing “McMansion” homes, they will have a wider variety of housing options to choose from than today’s senior home owners. Manufactured home builders and land‐lease manufactured home communities will find themselves in an increasingly competitive housing marketplace where innovation and creativity are essential to success.
Housing Realities and Impacts
Forty‐six percent of all households in America are headed by baby boomers (45‐64 years old). If you add in those already aged 65 years or older, the number of these senior households grows to 60 percent. According to METLIFE Insurance Company, a large percentage of these heads of households will be grandparents. Due to economic necessity, many grandparents will be financially supporting their children and grandchildren, including having their children and grandchildren live with them. At the other extreme, 20 percent of these seniors will be living alone (this jumps to 38 percent of seniors over the age of 75). Because their children delayed having children until later in life, more of these seniors living alone also will have grandchildren who visit frequently.
Approximately 35 percent of Americans over the age of 65 rely almost entirely on Social Security payments for income, with the average Social Security benefit for a retired worker in 2011 about $1,177.00 per month. The Council on Aging estimates that while many aging Americans perceive their health as excellent or good, the reality is that most older adults have at least one chronic condition and many have multiple conditions. Older Americans spend approximately 13 percent of their total expenditures on health – more than twice the proportion spent by all consumers.
So what do these demographic changes mean for an owner of a land‐lease manufactured home community? According to the U.S. Census Bureau’s 2010 report, manufactured home community owners should expect the following housing impacts: expect people to double up or share their homes by renting rooms; they will have less income available to deal with higher utility bills and the need to financially support their extended families; and more home‐bound residents will not have the option or won’t be able to afford other living arrangements.
The impacts and challenges continue. Are 55+ communities realistic considering the need to allow extended or non‐ traditional families in manufactured home communities? Does offering homes for rent in these communities make economic sense? Should communities build playgrounds (maybe with adult exercise equipment) as a way of making them more family‐friendly? Should people be allowed to rent rooms in their homes? Can duplex manufactured homes be developed to replace older homes in communities? Are manufactured homes able to accommodate residents who want to “age in place” in their homes? What kind of “assisted living” rental income homes with “age‐in‐place” technologies will keep residents in their communities longer?
Innovative Approaches and Solutions
The Newport Pacific Family of Companies is a manufactured home community, marina and apartment property management firm, managing properties and home owner associations in five states stretching across the country. Its full‐service property management strategies have one goal: to create successful communities and increase their value for owners and residents alike. It has been a pioneer in addressing many of the issues created by an aging population within manufactured home communities.
Mike Sullivan, CEO and principal of Newport Pacific Capital and President of Cirus Development, is a certified property manager, a California General Contractor and a manufactured home retailer. As former President of the Board of Directors of the Western Mobilehome Park Owners Association (WMA) and President of the Santa Clara County Manufactured Housing Education Trust, Sullivan has an extensive understanding and appreciation of the challenges facing land‐ lease community owners.
Sullivan explains that land‐lease community owners face an increasing problem as community residents get older. “One of my communities was facing the situation where it lost 10 residents in one month, 18 percent of its residents in one quarter, and the children of the deceased residents had stopped paying space rent,” Sullivan noted. “We had to be creative in order to stem the problems this community faced.” Another fact he uncovered in his research was that their original 55+ aged residents (now 75 to 85 years old and older) were being marketed to heavily by the local assisted‐living companies surrounding their communities. “We had become the feeder lot for these organizations,” said Sullivan.
Newport Pacific created a subsidiary, Lifestyle Services, Inc., to develop solutions that could address the many issues being raised by an aging resident population. Its Lifestyle Services Concierge Service helps seniors stay in their homes longer by helping them retain their independence as long as possible. The service assists residents with tasks that they can’t easily do – or at all – any more. Additionally, the service offers family members who can’t be with their aging loved ones as often as they would like the peace of mind of knowing that they are being well‐cared‐for. Services include housekeeping and yard maintenance, running errands and handyman services, and modified house sitting services.
Another approach has been the development of technologies such as the “Close‐By” Network that provides in‐home monitoring and reporting of behavioral patterns like eating, sleeping and medication use directly to the doctors of the aging residents. The service also allows routine medical tests, such as blood pressure, to be performed directly in the resident’s home, enabling doctors to monitor the procedures and results via direct video links. “It’s a virtual doctor’s office,” said Sullivan. The service can even be expanded to offer in‐community services in a community’s clubhouse.
Next Steps Forward
One of the company’s more innovative approaches has been the development of its Net Zero model home and electric car. Newport Pacific’s sister companies, Modular Lifestyles and Cirus Development, began developing and building “Net Zero Green” homes in 2008 for a new 62+ community, Oak Haven, located in Ojai, CA. The new modular homes incorporated maximum energy‐efficiency technologies that operate at or near “Net Zero” energy use. The home has a home energy rating system at the factory that is 21 percent better than standard‐built homes. The homes are 90 percent constructed in the factory, with minimal waste and the onsite work requiring only two 8x8x8 dumpsters.
The first model of this new generation of homes was placed in the community in 2008 and proved to be quite successful. The community began filling up with these innovative homes within two years, and won the 2011 MHI “Homes Under 1800 Square Foot” award category with Cavco Industries.
When Florence Roach’s Santa Barbara condominium sold the first day on the market, she knew that her decision to move was a good one. Considering her future retirement, Florence had wanted a less expensive place to live and maintain. With her daughter living in Ojai, Florence checked out Oak Haven’s advertising claims of “low cost” living with “green” solar‐powered, energy‐efficient modular homes. Florence was sold on the Ojai Valley and purchased one of Modular Lifestyle’s homes.
Before coming to Ojai, Florence had experienced respiratory problems that could come on without notice along with allergies and osteoarthritis. Since moving into her new home, she has had unexpected health improvements which she attributes to the dry heat and the less toxic interior environment of her new home. The whole‐house fan in the new home continuously replaces the home’s interior air with filtered air.
The homes include extra ceiling, wall and floor insulation that keeps their interior temperature moderate, with Florence’s electric and gas bills at or near zero every month, even during her first hot summer in Ojai. These are the kinds of operating costs she can afford for the future. In fact, from July 2011 to July 2012 she has a cumulative negative $19.50 credit on her electric bill.
The company then turned its focus to developing and building its “Quest” home. These solar‐powered, energy‐ efficient modular homes also include other energy‐saving features such as tankless water heaters and propane‐powered generators so that the homes are virtually independent of outside electrical service. Due to the high number of 30‐ and 50‐amp “mobile home parks,” this home solves the overall issue of aging infrastructure.
Senior communities, such as Oak Haven, are proving that land‐lease communities are well‐positioned for the upcoming Baby Boomer population explosion and have a unique opportunity unlike any other multi‐family housing project. They have existing facilities that can be upgraded to incorporate services and products that more directly appeal to seniors. But to be successful, land‐lease communities must embrace the changing housing marketplace with creative thinking and innovation. By doing so, land‐lease communities can compete with and be attractive alternatives to the newly‐ built senior apartments and assisted‐living developments. The reality of the generational changes taking place in the housing marketplace requires new thinking and new approaches...all at a very accelerated pace of just a few short years.