Boomers & The Multi-Family Real Estate Market

On the heels of his new book, The Stackable Boomer, David Allison spent his breakfast hour sharing some incredible insight into the Boomer’s impact on the Metro Vancouver real estate market.

According to Allison, in order for developers and builders to truly harness the buying power of the Boomer generation, they need to think differently. This paradigm shift theory, which comes from thoughtful research and conversations with 1,000 baby boomers, centres around three key learnings but first some background.

Baby boomers are the largest and wealthiest generation and the reality is that their home in the suburbs is not a long-term housing solution. Downsizing is inevitable in order to achieve financial goals, accommodate their changing lifestyle and physical limitations.

David explains that there are three major cohorts of boomers: The Affluentials, The Reluctants and the Underprepared. Of the estimated 16MM boomers in Canada the Affluentials make up 25%, they are the most financially prepared for retirement and can afford the luxury condo in the neighbourhood of their choice. As a result, they are generally comfortable with the concept of downsizing. Another 25% of Boomers are the Underprepared, they simply don’t have the money and will be forced to look to co-housing or life leases in order to retire. It’s the remaining 50%, the Reluctants, that are the subject of today’s conversation as they simply don’t want to give up their home in the suburbs or the lifestyle they have spent decades creating. The reality is that they don’t have a choice either. It’s these Reluctants that need our help finding multi-family housing that makes them continue to feel like winners.

The problem is that while developers are pumping out new condos and multi-family solutions the product is geared to Affluentials or the Underprepared and we’re missing the mark for millions of baby boomers.

Now, back to the research and discovery…

David’s conversations with 1,000 boomers revealed three major takeaways he calls:

• It’s About Them, Not Us – Downsizing is an emotional and psychological game based in fear. Boomers are considering getting rid of their home in the suburbs. A home that they raised a family in, created a lifetime of memories in and a home which is for many, a trophy or symbol of success. They worry about fitting in with the people in their new condo building. They worry about losing their comfortable routines. It’s a developer’s job to coach them, to show them what it will feel like living inside our product. We need to think more like a psychologist. It’s not the countertops, the flooring or the package. It’s the anxiety around the new lifestyle. The product is secondary.
• Social Proof – Boomers are scared silly that their current social group is going to ditch them. They don’t want to be left behind. Their new condo needs to continue to be their trophy and allow them to show off to their friends. As a result, the most important rooms to boomers in a condo or apartment are the living room, dining room and kitchen. David calls this the “Show off triangle”. When friends and family come over, those are the rooms the guests are going to see. So take the money out of the spa bathrooms. It’s more important that their friends see that they are still successful. They need our help to do that.
• A Place for Stuff – Storage is a massive opportunity and a major issue. They have a lifetime of belongings in their homes in the suburbs and they don’t want to put it in the cage in the basement where they have to navigate around their neighbour’s pile of old suitcases or wade through puddles to get to it. “They want their 5 sets of dishes somewhere nearby where they can use them.” The need for storage and plenty of it!

After speaking with Boomers, David sat down with 60 of Canada’s finest architects from Perkins + Will to figure out what we can do to make them happy. Reluctants don’t have the money of the Affluentials so the solution is creativity. The top 3 ideas are:

• Shape Shifting Spaces – boomers are accustomed to a lot of different rooms each with its own single purpose. We can still give them that functionality by making the second bedroom also the study and also the wine room. It’s about telling the right story and it doesn’t have to be expensive.
• A Space for Every Function and a Function for Every Space – Reluctant boomers need to be shown that the entire structure is their home. the lounge upstairs is actually their other living room, the park downstairs is their backyard. We can help boomers consider the entire structure their home if we build amazing amenity spaces. Turn space into functional space that they can’t resist to use and don’t make an empty entertainment lounge or a billiards room.
• Encourage Interaction – Break up the amenity spaces; spread them throughout the building and encourage people to use the whole building as their home. Residents will naturally bump into each other and maybe even hang out on each other’s floors.

We need to figure out how to make homes for these millions of middle-class boomers that are headed our way. Let’s thrill them. If we can figure this out, we will have created amazing homes and communities that work better for everyone, not just the boomers.