Retirement Village: what do you buy if you don’t want the retirement or the village? opinion

Housing is always a place to live with whomever you want to, a place to conduct your daily life, a roof over your head, a place to store your stuff, a place to call home and an investment. But after that it’s also an enabler of the roles you want in your life – family roles, work roles, leisure roles, community roles, growth roles.

Most people would never willingly buy or rent a house if it didn’t support both functions. And many people will even give a priority to the role-function over the roof-function when picking a house.

So how did we end up with so many retirement village which at best score a “B” for roof-function and a “C” for role-function?

Well, because their priority is actually to sell you something else. A sense of security for those who see ageing as a disaster waiting to happen. And they’re good at reinforcing this at those vulnerable points when there’s a lot changing in your life. At the height of the pandemic disaster, retirement village enquiries were up 16 per cent.

Despite their high market visibility, only 6 per cent of older Australians buy into retirement villages. This represents the size of that market segment that prioritises a sense of security over most other life needs. Retirement villages in their current form are unlikely to be a housing option for other market segments, even if they also have a security need.

Still, retirement village operators are desperate to increase “market penetration” by recently, with some success, offering housing plus home-care services pitched at frailer people. As they get better, they will give aged care homes a run for their money. Who wouldn’t prefer to live in a retirement village with services over an aged care home? Although, caution is needed here with one evaluation showing that many of the institutional disadvantages older people are desperate to avoid in aged care homes are also present in retirement villages.

Older people seem to be on the same page here, preferring retirement villages for the frailer stage of their lives. Average age of entry is now 81. With average age of retirement at 61, they really should be called “post-retirement villages” or even “nursing villages”.

Land-lease communities (where you buy the house and rent the land) have recently eclipsed traditional retirement village sales. They do go a long way to sorting the concerning price and resale issues for older buyers. But they are still in most ways retirement villages courting the same 6 per cent of the market.

The saddest thing about retirement village operators is that they have never really understood their “customers”. And why would they if they can squeeze large numbers of houses often on cheaper, poorly located land, and then keep one third of the value of the house on every sale.

Reported dissatisfaction by customers and governments moving to protect customers might have rung alarm bells. But surely 94 per cent of the market not buying and the other 6 per cent delaying buying might really be a sign that a change could be good for older house buyers and businesses alike. And RSL Lifecare research tells us it’s only going to get skinnier, with only 1 per cent of Boomers imagining a retirement village future.

It’s well established that there are substantial losses caused by moving into aged care homes, but we could not find the loss-list for retirement villages. We did discover that individual village managers had a long list of losses gleaned from residents themselves. Mostly about loss of roles or loss of their things that enabled roles. Sadly, this organisation intelligence has never found its way into strategic plans.

We borrowed from younger people all of the habits they use for getting and keeping their roles. Finding purpose, growing and learning, investing in self, homes that enable, services that serve, enriching networks, preserving personal reputations. We could see no reason why they wouldn’t be the same habits for older people. So, we tested for their presence in retirement villages. Not only are they mostly missing, but we also found activity, expectations, attitudes and rules that actively occupy the space and displace them.

We should never confuse the residents’ need for roles with the building grandness that is such a selling feature of new villages. We found that older people were more than happy to trade 'grand' for roles. Good news for operators because it lowers build cost and changes the dynamic of what’s supplied and what residents assume are their responsibility. Check out top-selling Lasell Village on the grounds of Lasell University in Boston, where the resident contract requires all residents to be students at the University.

Businesses really only sign up for serious change when leaders can see what the new 'good' looks like. And that’s been the problem. No obvious alternatives to the village. Operators haven’t asked, older people simply stay away.

Some recent co-invention work with older people indicated that of the six things people value most about where they live, only one of them is about the house itself. Looks like the significance of the role-function over the roof-function might increase with age. Goodness knows what co-design work with these older people and clever product developers might turn up as new housing options for modern elders.

And this is probably the only way to open the door on the other 94 per cent of the market, many of whom want to change houses (usually to downsize their maintenance and upsize their lives) but won’t have a bar of retirement villages. It’s likely to be more integrated with people who have roles, role-enabling, close to where buyers currently live, offer very discreet services, tech-enabled, way more storage, easy to move out of and never ever branded for older people. In the absence of housing that older people like, they’ve turned to building and renovating their own, with Thrive Housing reporting a 30 per cent increase in older people opting to build.

Until we see modern elders more as 'rolers' and less as 'roofers' we will continue to see retirement villages as the answer to older people's housing, even if this means operators sacrifice significant market growth, profitability, customer satisfaction and community leadership. Such is the depth of embedded ageism, we would love to see them lead this change (especially with their village managers), more likely others will.

Mike Rungie specialises in the intersection between good lives and aged care. He is a member of a number of boards and committees including ACFA, Every Age Counts, Global Centre for Modern Ageing and GAP Productive Ageing Committee

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