'Grey power' makes its mark

One of the most popular residential schemes for senior citizens is what is called sheltered housing. In Israel it has taken off.

sheltered housing 88 224 (photo credit: Courtesy)
sheltered housing 88 224
(photo credit: Courtesy)
Over the past 50 years, life expectancy has increased rapidly. In the 1950s a man was expected to live less than 70 years and a woman slightly more. Today life expectancy in the Western world is more than 80 and rising. Since people are living longer, their numbers have increased rapidly and grey power has political and economic clout; senior citizens have marked consumer traits in, among other things, real estate, in which they have special residential needs. Many senior citizens receive pensions that allow them to enjoy a relatively high standard of living, which means a high degree of consumer spending. The number of older people is not only rising in absolute terms, it is also rising in real terms. Together with the rise in life expectancy, there is a corresponding drop in birth rates, which are falling constantly; that means the ratio between young and old is constantly shifting toward the older generation. Older people have special needs, including housing. Developments in medicine has helped people live longer and increased their quality of life. Eighty-year-olds are certainly not young, but their overall physical state is such that they can enjoy an independent and active lifestyle. And this is where the special real estate needs of that segment of the population comes into play. Even though they are independent and, in most cases, wish to remain so, as they get older the generation gap between their children and grandchildren widens and there is an element of loneliness. Older people are also more prone to be burgled at home, so there is also the element of security. As a result, there is a need for a housing arrangement that allows total independence of living with a high degree of security, and the companionship that comes from living in close proximity with other senior citizens. One of the most popular residential schemes for senior citizens is what is called sheltered housing. In Israel it has taken off. The Israeli retirement home industry is very dynamic and demand is increasing rapidly. Entrepreneurs are rapidly adapting themselves to this very important facet of "grey power," and investing accordingly. Five years ago the number of residential units in sheltered retirement homes - or as some prefer to call them, congregate houses - was an estimated 20,000. Today, there may be as many as 30,000 such residential units, and the numbers are growing. Israel is a special case, because many Diaspora Jews want to retire and die in the Holy Land; on top of local demand, there is great demand from abroad. Sheltered housing is in many ways similar to a residential hotel; the residents are entitled to partake of all the services offered by the hotel if they want to. Residents can partake of all the services offered, or they can lead a life that is completely independent. Like most hotels, many sheltered housing establishments are very luxurious. Building a modern 300-unit sheltered housing facility can cost between $50 million to $60m. But despite the relatively high cost, there is no lack of investors because long-term returns are high. Most retirement residences are urban in character even if they are located in the outskirts of the big cities. The residential units are part of a central building in the same way an apartment is part of a residential tower block. But now some entrepreneurs are building country-style sheltered housing or sheltered villages. These are single-family or semi-detached units surrounded by their own plot of land. One of these is Protea Village in the Sharon region; another is in Ginossar on the shores of the Kinneret. These sheltered villages may well be the coming trend in real estate.