You have reached a National Association of Home Builders resource page. To return to our homepage, go to nahb.org.
 
Estimating 55+ Housing Starts

Estimating 55+ Housing Starts
In-Depth Analysis, October 7, 2005
by Liu Yingchun Ph.D.
 
The growing popularity of new home communities with persons aged 55 years or older has spurred interest in determining the share of housing production in that segment of the market. The standard source of housing starts data, the Census Bureau’s Survey of Construction (SOC) [1], does not contain information about the age of people who are attracted to newly developed communities, but researchers in NAHB’s Housing Policy Department have been able to derive estimates of 55+ housing starts from an alternate source.
 
The American Housing Survey (AHS), conducted in odd numbered years by HUD and the Census Bureau, has been one of the most important data sources of housing market information. For years, the amount of information about 55+ housing available in the AHS was limited. However, NAHB worked closely with the Census Bureau and HUD to improve the quality of 55+ housing data. As a result, beginning in 2001, the AHS asked respondents over age 54 if the units they occupied were age-restricted, and, if not, whether they were part of a community in which most of the residents were 55 or older. It’s possible to legally age restrict a property under exemptions to the Fair Housing Act [2]. Also, some communities contain amenities that attract mostly persons age 55+ even when not restricted to them. Homes in these communities may function as reasonably close substitutes for age-restricted properties, and many developers would like to be able to account for them when assessing supply and demand for the 55+ market segment.
 
The 2003 AHS, for the first time allows identification of  newly constructed 55+ housing from a national representative sample through examination of the units added to the sample between 2001 and 2003. This article combines information from the most recent American Housing Survey (2003) and the Census Bureau’s housing starts statistics to estimate 55+ housing starts for 2003.
 
55+ Housing Starts
In order to estimate the 55+ housing starts, the following information was obtained on new homes represented in the 2003 AHS:

- whether it is a single-family or multifamily home
- whether it is in an age-restricted community, in a non-restricted community where a majority of the home owners are 55 years of age or older (non-restricted 55+ communities), or in another type of community
- whether it was built since the last AHS survey (AHS 2001)
 
The shares of newly constructed homes in age-restricted communities, in non-restricted 55+ communities or in other communities were then calculated (Table 1). Although AHS samples are updated continuously to cover new construction, the AHS new construction sample is not weighted to measure the new constructions for a particular year. NAHB’s estimates assume  the shares in Table 1 hold across construction activity for a full calendar year.
 
Table1. Share of New Housing Built by Community Type: 2003
 
In Age Restricted Communities
In Non-restricted* 55 + Communities
In Other Communities
Single Family
2.8%
3.1%
94.1%
Multifamily
4.1%
0.2%
95.7%

*Includes communities that have attracted mostly persons age 55+ but are not restricted to them.

 

 

 

 

 

 

 

 

 

Source: 2003 American Housing Survey, U.S. Census Bureau.

 
The Census Bureau’s housing starts report shows that there were 1,499,000 single family housing starts in 2003. Applying the shares from Table 1, we estimate that there were 42,325 single family housing starts in age-restricted communities in 2003 and 46,964 in non-restricted 55+ communities (Table 2). Similarly, of the 349,000 multifamily homes started in 2003, we estimate that 14,219 were in age-restricted communities and 532 were in non-restricted 55+ communities.
 
Table 2. Estimated Housing Starts by Community Type: 2003
 
In Age Restricted Communities
In Non-restricted* 55+ Communities
In Other Communities
Single Family 42,326 46,964 1,409,710
Multifamily 14,219 532 334,248

*Includes communities that have attracted mostly persons age 55+ but are not restricted to them.

Source: NAHB estimates based on the 2003 AHS and housing starts data from the U.S. Census Bureau.
 
The estimates of 55+ housing starts shown in Table 2  should be used with caution, as some survey respondents appeared to give inconsistent answers to the 55+ housing questions for existing housing units. For example, about 46 percent of the housing units reported as age-restricted in 2001 changed to other types of communities in 2003 and about 17 percent of the units reported as being in “other 55+” communities in 2001 changed to age-restricted in 2003. It is unlikely that so many existing communities changed their age-restriction status over a two-year period. It seems that respondents sometimes report age-restriction when it is not present and vice versa. The best that can be hoped for is that these two kinds of mistakes balance out in a way that still produces reasonably accurate estimates. For a detailed discussion on this issue, see the forthcoming article by Yingchun Liu in 50+ Housing News.
 
There are other issues related to the 55+ housing data. For example, over the years, the Census Bureau has variously accounted for “assisted living” facilities (a term now commonly used to indicate facilities that provide assistance with activities of daily living, such as bathing and dressing), as both group quarters and housing units. It, therefore, is uncertain to what extent assisted living facilities have been included in the universe from which the AHS sample is drawn (although it seems likely many of them have been excluded). The Census Bureau and HUD are planning to add a sample of assisted living units in the 2005 AHS to improve on the data quality of AHS.
 
In general, the AHS communities that are not age-restricted but nevertheless occupied mostly by adults age 55+ include communities occupied primarily by older residents who have been there a considerable time and have simply aged in place. The problem of distinguishing communities that result from prolonged aging in place does not arise, however, when the focus is exclusively on recently built housing units.
 
Characteristics of Newly Constructed Housing Units
According to the 2003 AHS, of the newly constructed housing units, whether they are single family or multifamily, 55+ communities (age-restricted and non-restricted) have fewer people per household than other communities. It is important to keep this in mind when local officials assess impact fees for new development. More than a quarter of the age-restricted communities have either transportation or day care service or both. In other types of communities, the presence of one of these services is much less prevalent. More than 90 percent of the 55+ communities have at least one of the following: recreational facilities, a community center or clubhouse, golf course, walking/jogging trails, and restricted-access beach, park or shoreline. In other types of communities, these features are present much less often—34 percent for single family, 53 percent for multifamily. Due to confidentiality issues, the AHS does not provide more detail about individual recreational amenities. A private source for data about amenities offered in  55+ housing projects is the National Directory of Lifestyle Communities compiled by Parks Development Consulting, Inc.
 
Looking across different structure types, multifamily housing units tend to have fewer rooms (including bedrooms, bathrooms and half bathrooms) than single family housing units; multifamily housing units are smaller on average; fewer multifamily housing units are in gated communities and fewer multifamily communities have at least one of the recreational facilities mentioned above. However about 48 percent of age-restricted multifamily communities provide transportation or day care service, while only 25 percent of age-restricted single family communities provide such services (See table 3 for details).
 
Table 3. Average Characteristics of Housing Units Built 2001-2003
Single Family
 
In Age Restricted Communities
In Non-restricted* 55+ Communities
In Other Communities
Number of persons
1.66
1.82
3.10
Number of bed rooms
2.34
2.83
3.44
Number of rooms
5.45
6.8
7.08
Number of half bathrooms
0.18
0.39
0.5
Number of bathrooms
2.08
2.05
2.24
Square feet of living space
2624
2470
2764
In gated communities
61%
10%
6%
community recreational facilities
95%
49%
34%
community transportation or day care service
25%
18%
10%

Multifamily

 
Age-restricted
Unrestricted 55+ Communities
Other communities
Number of persons
1.09
1.71
2.14
Number of bed rooms
1.58
2.42
2.21
Number of rooms
3.99
6.48
4.82
Number of half bathrooms
0.13
0.1
0.29
Number of bathrooms
1.31
2.3
1.72
Square feet of living space
1542
1934
1418
In gated communities
20%
11%
26%
community recreational facilities
90%
70%
53%
community transportation or day care service
48%
0%
15%

*Includes communities that have attracted mostly persons age 55+ but are not restricted to them.

Source: 2003 American Housing Survey, U.S. Census Bureau.

 

In summary, this article combines  55+ housing information from the 2003 AHS and the Census Bureau’s housing starts data to estimate, for the first time, a set of 55+ housing starts. These numbers should be very helpful for people interested in 55+ housing, including local officials, developers and home builders. In addition, more insight, particularly about assisted living units, should be possible once the 2005 AHS is available.
____________________________________________________________________
[1] The SOC is comprised of two parts: (1) Survey of Use of Permits which estimates the amount of new construction in areas that require a building permit and (2) Nonpermit Survey which estimates the amount of new construction in areas that do not require a building permit. According to the Census Bureau, less than 3 percent of all new construction takes place in nonpermit area.
 
[2] The Fair Housing Act of 1968 made it illegal to refuse to sell or rent housing to families simply because they have children.  The 1988 amendments to the Act gave an exemption to this for properties with  significant facilities and services designed for the elderly.  In 1995, the Housing for Older Persons Act relaxed the requirements for the exemption, so that a housing project can now be legally age-restricted under any one of  three criteria:
  a) It demonstrates an intent to house people age 55 or older and has at least one person of that age in 80 percent of its occupied units.
  b) It’s occupied only by people age 62 or older.
  c) It’s designed for and occupied by elderly people under some federal, state, or local government program.  Return to article.

 

 

 

For more information about this item, please contact Paul Emrath at 800-368-5242 x8449 or via email at pemrath@nahb.org.


Recommend This: Recommend This