University-Based Retirement Communities: Criteria for Success

August 31, 2006
| Reprints
Expert advice on how to-and how not to-integrate a senior housing campus with a college campus by Andrew Carle
BY ANDREW CARLE University-based retirement communities: Criteria for success
One of the more recent innovations in senior housing, how it can go astray, and how to make sure that it doesn't Senior housing models and design have come a long way in the past two decades. Yet, the future of such housing may reside in the hallowed halls of buildings 100 years old or more. From Stanford University to Notre Dame, Duke, and Cornell, retirees are finding communities that are part of a larger campus-often the ones they traversed in their youth.

The growth of retirement communities affiliated with academic institutions has been slow but steady over the past two decades. By 1995, perhaps two dozen communities could claim a formal or informal relationship with a host university or college. However, because of a near "perfect storm" involving today's retirees, housing providers, and academic institutions, as many as 100 such communities have either opened or gone into development since then. With more than 4,000 universities and colleges in the United States, even a 10% participation rate could result in more than 400 such communities in the next 20 years.

Nor is the interest solely domestic. Institutions in Europe, Asia, and Australia are exploring this concept for their own aging populations.

What's Driving the "Storm"?
Unlike their Depression-era parents, today's retirees and their younger baby-boomer brethren are not tied to their family homes. According to the most recent Del Webb opinion survey, Baby Boomer Report, a full 59% of younger Boomers (41 to 49) plan on purchasing a new home for retirement. But only 16% of current retirees in a 2005 survey by the Senior Advantage Real Estate Council selected their new home because it was in an age-based/restricted community. After inventing the large suburbs, attending large high schools and universities, and settling into careers with some of the nation's biggest employers, these individuals have never been either bored or alone. Whether attending a football game through The Village at Penn State (tickets are guaranteed with residency), or enjoying music concerts or classes at Oberlin College through Kendal at Oberlin, their ability to find intellectually stimulating and socially congregate environments far exceeds any desire to settle into traditional retirements.

Providers can see that long-term growth of the senior housing industry is guaranteed by force of sheer demographics. Top providers, though, have been seeking the "next generation" model capable of delivering a unique competitive advantage in a crowded and increasingly generic field. By accessing the resources of established universities, providers can convert the traditional "Four Bs" of activities from "bingo, birthdays, Bible, and bridge" to "ballet, basketball, biostatistics, and biology." Better yet, they can do so at little to no cost while tapping into a market whose brand loyalty was established up to 50 years prior to purchase, and whose supply will never end as long as the university exits.

Despite record enrollments today, strategic plans for the nation's institutions of higher education include one significant reality: The population of inbound students will begin to decline after 2011. Faced with the possibility of excess capacity, institutions are realizing the opportunity to "recycle" their previous customers while gaining potential philanthropic benefits.

Not Without Problems
Even with this opportunity, the development of university retirement communities has not been problem free. Two of the movement's "founding fathers," Meadowood Retirement Community at Indiana University and Green Hills at Iowa State, faced bankruptcy before turning day-to-day operations over to professional senior housing management providers. Other universities have paid the price for attempting to establish and/or own "country club" communities for faculty and alumni without having the expertise needed for long-term senior housing success.

On the provider side, many have been reluctant to deal with institutional bureaucracies and politics, or to take advantage of campus resources once the community is full. At one mid-Atlantic campus, the housing provider and university administration essentially went their separate ways when the university president began receiving calls complaining about the community's food and as provider frustrations in working with multiple academic departments took hold.

The Five-Criteria Model
Despite these issues, consumer demand for such communities continues to grow. Thus, in an attempt to learn from the past and provide a road map for future success, the George Mason University Program in Assisted Living/Senior Housing Administration has established a five-criteria model to define the best approach for a new and distinct form of senior housing: University-Based Retirement Communities, or UBRCs. Mason criteria to be considered in the design and operation of a UBRC include:

  • A location within an accessible distance (preferably one mile or less) of core campus facilities, such as theaters, sports complexes, and classrooms. For retirees, the ability to access and feel a part of the campus is critical. One southeastern community claims a link to two different universities in its marketing materials-but the community itself is located several miles outside the town shared by these institutions, making daily access unrealistic for most residents.
Page
of 3Next
Topics