On Tuesday, September 11th, Grosvenor Americas, with guest speakers from McKinsey, hosted a ‘Silver cities’ event in Washington, DC to discuss one of the biggest megatrends changing the world today. Over 110 clients, partners, council members, thought leaders, and research professionals attended the cocktail and conversation event focused on the multitude of impacts population ageing will have on our cities.
In his opening remarks, Grosvenor’s Research Director, Brian Biggs, explained to guests that “by 2020, the 60+s will be larger than most other age groups, and that is historically unprecedented”. He highlighted the need for city planners to consider the reduced mobility of this group and other challenges that come with ageing. Biggs also noted that 90% of older citizens want to ‘age in place’ in the communities they grew up in which “creates a blockage in the middle section” of the housing market, with under-occupied homes and empty bedrooms leading to reduced residential supply.
McKinsey Partner John Means observed that about 45% of seniors are cost burdened – meaning they pay 35% of their monthly income in rent – but may not want to leave their homes. For this demographic, utilizing services such as Airbnb could assist from both an affordability and loneliness standpoint. Means also underscored the need to engage with new technology such as autonomy, tele-medicine and delivery, opining that “this may be the first generation that has lifelong mobility” due to transportation systems such as Lyft and Uber. Means went on to explain the need to focus on community connectivity for seniors to lower the risk of isolation, saying “we need to think about the sharing economy, design of space for multiple seniors to live together, or design common space in our developments and communities so that seniors can engage together.”
Jaana Remes, Partner at McKinsey Global Institute referenced the “rapid increase in income and consumption inequality amongst the elderly” creating very different groups among the elderly. Communities need to think about how best to serve those different niches and meet their needs. Commenting on the lack of accessibility for people with limited mobility in today’s existing homes, Remes pointed out that a number of cities around the country have started to introduce accessibility ordinances in new developments.
Biggs highlighted a theory on declining interest rates: “as baby boomers work they accumulate retirement assets and there are so many that are buying up savings to fund their retirement, this puts downward pressure on interest rates and real estate cap rates. As the baby boomers retire, they start to liquidate their retirement portfolio; they are going to be releasing some of these assets back into the market, and they will be increasing the supply which [according to the theory] will push rates up.”
A key area of discussion concerned the ageing workforce and the need for employers to structure office environments to capitalize on the unique skillset of older workers. According to Biggs “[older workers] have better semantic and implicit memory, they can draw on their cumulative experiences built over a lifetime, they have connections, and can solve problems. And they have improved language and speech capacity meaning that they can communicate ideas much more effectively.” Remes remarked that companies could create more mentoring roles that are tailored for people who would not be physically able to do the work of a 25 year old.
Our panelists agreed that there needs to be more inclusive and affordable housing for seniors. If there were more product available that addresses the needs of the 65+ age range, then these individuals might be willing to move out of their single family home, thus releasing it back into the housing stock and making it more affordable for young families and first-time buyers.
In closing the discussion, education was raised as a key factor in ensuring that actionable changes will occur to better serve the ageing population. “We should educate the technology community on this topic and make smart cities smart for elderly citizens…there is a lot we can do with technology if we stop thinking about millennials as the main target group,” said Remes. Biggs concluded by reiterating the need for education on the ageing community’s requirements, emphasizing that “we need a strong educational push and developers will see market opportunity to develop product for this age demographic”.
Our intent for Grosvenor’s speaker series events is to facilitate discussion around pressing urban challenges and opportunities. Our ‘Silver cities’ event encouraged a lively dialogue on property and planning in an era of demographic change, bringing together relevant stakeholders who can work together to develop and implement solutions.
Please see below for a video from the event.
For more information, please contact Jordan Prior, Director of Project Marketing, Grosvenor Americas, at Jordan.Prior@Grosvenor.com or +1 604 640 3504.