ICF Real Estate Colloquium: "The Crisis We Can’t Avoid? Implications of Population Aging for Real Estate Markets"

Yale ICF Real Estate Colloquium: "The Crisis We Can’t Avoid? Implications of Population Aging for Real Estate Markets"

On November 12, Assistant Professor of Finance, Cameron LaPoint, hosted a panel discussion with Jose Fernandez (Economist, Department of Housing and Urban Development), Professor Danya Keene (Associate Professor of Public Health, Yale School of Public Health), and Dave Liu, MBA ‘08 (Head of Healthcare and Life Sciences, Harrison Street).

The United States and many other countries are experiencing a rapid aging of their populations, with those aged 65 and over accounting for 27% of all U.S. households as of 2022. As the baby boomer generation enters retirement, population aging is having profound effects on healthcare, social services, and particularly the real estate market.

This demographic shift coincides with a crisis in housing affordability, exacerbated by an aging housing stock and a shortage of new residential development. In dense urban areas, lackluster permitting for new construction has failed to keep pace with population growth and changing housing needs. Simultaneously, the rising costs of long-term care and senior living arrangements are prompting many older adults to age in place, remaining in their homes for longer. The cost of care associated with Alzheimer’s disease and related dementias (AD/RD) is projected to almost triple over the next two decades, reaching $1 trillion per year by 2050. Such trends have significant implications for real estate market dynamics, potentially reducing the inventory of homes available for younger generations, leading to higher prices for prospective first-time homebuyers, and increasing demand for spaces designed for healthcare and life sciences research.

The interdisciplinary panel, which featured perspectives from public health, government, and investment management, examined potential solutions to the demographic imbalances the real estate market faces today. They delved into how population aging is influencing housing demand, affordability, and the need for specialized senior living arrangements, as well as innovative ways to finance the burden of elderly healthcare and housing needs. The engaging discussion covered the complexities of physically updating the existing housing stock to meet the needs of an aging population while also addressing the broader housing shortage at all stages of the life cycle.