Disruptive Aging in Place and the Forgotten Middle

There is good reason The Forgotten Middle, a recent report from Health Affairs, sponsored by the National Investment Center (NIC), is getting buzz. This report, written by researchers at NORC, documents what has long been suspected by some of us in the field of aging and the longevity market- there is a huge middle income component of the older demographic that is mostly ignored and is soon to be in dire financial straits. The stats are damning:

According to the study, “by 2029 there will be 14.4 million middle-income seniors [aged 75+], 60 percent of whom will have mobility limitations and 20 percent of whom will have high health care and functional needs.” The study found that 54% of this population will not have sufficient resources to cover the costs of the housing and services they will need.



Bob Kramer, the whip smart, dedicated and effective founder of NIC who was behind the funding and direction of The Forgotten Middle helped the report focus on bringing new capital to build senior housing for middle income residents. That is an important arrow in the quiver of solutions. But the fact is fewer than 10% of older people have ever lived in senior or even “55+ lifestyle” housing. Even if much more middle income aimed senior housing is built, there is still plenty of room for other arrows. The vast majority want to age in place and most in the field expect that to happen.

Innovation and even disruption does not have to be big crashing change. Disruption can come from different or better use of resources. Uber and Lyft did not invent driving or cars. They just connected them differently. Renewables did not invent wind or sun.They put them to productive use. Capital does not have to be blocks of concentrated money. New capital to foster innovation can come to housing and care through ‘distributed’ small investments.

At the study release event, Jennifer Molinksy, from the Harvard Joint Center for Housing Studies repeated their finding that only 3% of American homes have the most basic accessibility features. How can we bring capital to that housing improvement?  And how can updating homes push innovation for aging in place?

1. A recent study from Molinsky and the Harvard JCHS shows that consumers over 55 years of age spend half of the current remodeling dollars, a whopping $152 Billion, on home improvements.

If just 10% of that remodeling investment is directed to improving accessibility while remodeling, it will dramatically increase the number of American homes with aging in place features. Those individual investments will add up to $15 Billion to solve the housing and care crisis.

  • Part of the cost of assisted living and other senior housing is the rent. In most cases the use of your own home is less than this ‘rental’ cost. Aging in place brings the value of already owned real estate assets, or privately held housing infrastructure to solving the housing and care dilemma.
  • Updating builds on the homeowners’ current investment, turning it into a more valuable asset: a tool for aging in place.

2. Improving homes provides a better platform for the deployment of traditional and technology resources. The network effect is activated as more people aging well in their own homes longer increases productivity for all the technology, equipment and services in use.

  • Transportation, meals delivery and in-home care workers are more efficient when there are more homes to serve in a neighborhood.
  • Basic access- the ability to get in and out easily and safely – improve the use of transportation and adult day services thereby reducing isolation.
  • Monitoring technology, telehealth and social connectivity and engagement are used more and more profitably.
  • Safer bathrooms and homes mean fewer injuries to residents and facilitate safer use of paid and informal care, reducing health costs.

3. Policy influences investment. Solar did not take off on its own. Incentive policy was a huge stimulator. Witness the railroads, the highway system, radio, TV and cellular communications, nuclear plants, transistors and the internet. Policy must be harnessed to drive innovation to solve the senior housing and care crisis.

  • There are already some incentives in place and more in the works (HR.1583/ S.702and HR.1780)
  • As with solar collectors, incentives leverage consumer capital. Rather than paying outright for home updates, the use of incentives will leverage the $15 billion older homeowners are already spending.
  • Local and state programs become the laboratories for the way things can work.
  • Support for local campaigns will demonstrate to policy leaders and legislators at all levels the broad constituency for the aging in community solution.

The business benefits of updating homes is obvious for contractors, designers and construction product manufacturers. But what are the benefits for other sectors that serve older citizens? How will their businesses grow and improve as a result of home updates? How will this investment impact the cost and delivery of healthcare? How will demonstration of the value of home updates and aging in community attract additional capital to pay for remodeling by homeowners who cannot afford it?

Answering these questions is vital to solving the issues raised in “The Forgotten Middle.” Please let me know if you are interested in supporting the HomesRenewed Resource Center by sponsoring or partnering research to flesh out these innovative solutions.

I look forward to your comments and support. Sincerely, Louis

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