Two Gen Xers Walk Into A Retirement Home…

I recently got a detailed email from a friend in the Pacific Northwest outlining a possible venture she and her husband are considering. I was one of several people they asked to review the proposal.

They’re around my age (I was born in 1967) and while they’re too young for retirement they understand it’s sneaking up on them. They’ve participated in the care of elderly relatives and are keen to have a different less institutional experience for themselves when their time comes.

They’ve had some Covid related employment “rightsizing” that wasn’t exactly part of their original plan. But they have assets and cash set aside, live frugally with a low burn rate, are disciplined, and are both ridiculously fit and look like Vikings. So a business plan that integrates with their retirement trajectory seems reasonable. Their rough draft was four pages long and outlined various potential concepts including assisted living accommodations, farm co-op, tiny house village, et cetera. Here’s my interpretation of their elevator pitch. (My words, not theirs.)

Develop profitable senior housing in conjunction with regenerative farm-to-table agricultural, a supportive social environment, distinctive architecture, and natural beauty. Basically, provide retirees with a collection of cottages with good food, like-minded health-conscious people, and attractive surroundings - and make money doing it.

There was flexibility built into the proposal so the style, physical structure, and location of the property could stretch from rural to urban and take on different flavors. There’s wiggle room for adaptation, which I like. But the laundry list of theoretically appealing ingredients has to be reconciled with external reality.

I’ve spent a lot of time over the years exploring different versions of these kinds of endeavors and they seem to fall into a few basic categories. There are pipe dreams that never come to fruition. My friends are too smart and grounded to go down that path.

There are other projects that endure decades of bureaucratic hurdles, multiple intertwined creative financing sources, non-profit 501(c)(3) status, endless tortured committees… Eventually some compromised version is hammered into submission and emerges in a functional form. Perhaps my friends have the stomach for this route.

There’s the cookie cutter business model of residential care homes. They come with all the associated commercial loans, government staffing mandates, liability insurance, ADA compliant design considerations, official certifications, and so on.

This is a more reliable course in some ways, because it’s already been relentlessly standardized. But this level of debt and regulatory structure isn’t for everyone. That’s why corporate franchises and REITs (Real Estate Investment Trusts) tend to dominate the market. It’s up to my friends to make that decision for themselves.

There are board-and-care homes which are generally smaller and less complex than an assisted living facility. In some jurisdictions there’s a lower bar to entry and they can be established in an ordinary single family home in a plain vanilla neighborhood. I know people and their elderly relatives who have had good experiences with this arrangement. But it’s a specific niche that doesn’t work for everyone.

There’s talk at times of repurposing an existing hotel, motel, or seasonal campground into a year round retirement establishment. Unlike a board-and-care home these properties are subject to short term commercial loans with fluctuating interest rates rather than fixed rate thirty year mortgages.

And municipalities have the discretion to approve or reject land use zoning changes. In my experience most towns prefer tourist infrastructure that creates jobs and generates tax revenue from short term visitors. Permanent residents are considered a drain on local services. If you have to beg for permission you’ve already lost the battle.

Tiny Homes and Tiny Home communities are just mobile homes and trailer parks as far as the authorities and neighbors are concerned. The whole point of a Tiny Home is that they’re small and affordable and they exist without the need to purchase land. That’s both their primary benefit and essential downfall.

Local governments aren’t interested in accommodating low income inhabitants. Neither are the people who live next door. Good luck getting planning permission for a newly formed trailer park in a premium location no matter how you gussy it up. On the other hand, buying an established mobile home park and gradually tweaking the property is a potentially advantageous strategy. But now we’re back to seven figure short term variable interest commercial loans. And upgrading the essential infrastructure on an older property may be more of an expense than initially anticipated. It’s all about cash flow.

I like old people - so much so, in fact, that I’m in the process of becoming one myself. The alternative is less satisfying. I’ve helped many friends navigate the insults of aging and poor health. I’ve been at the bedside of people I care about as they’ve died. There’s peace that comes with being present and providing service in these circumstances. It puts life into perspective.

We’re not here for very long. Much of life is random. And the end isn’t pretty. I struggle to put this reality into context when confronted with the glossy advertisements for retirement living. It’s mostly a lie. But we cling to the geriatric porn nonetheless.

I’ll have all my hair, teeth, and marbles. I’ll pedal my bicycle down a country lane to get baguettes and artisanal cheese with my lifelong companion. We’ll sit on deck chairs and watch the sun set together. It says so in the brochures.

I’m confident my friends can find a business venture that works for them. They’re made of sterner stuff than I am. The next twenty years will see an ever increasing need for quality senior housing and someone has to provide it. But there are challenges involved.

My personal retirement plan is to continue to cultivate a wide informal safety net of friends and neighbors who look after each other. Institutions may fail, but we’ll still have each other. I work incrementally to retrofit existing space in small ways that will allow for aging in place. I keep out of debt. I have modest expectations about how much may be possible if things don’t always go exactly to schedule. And I’m ready to accept the inevitable when it comes.

Granola Shotgun posts from the last five years can be accessed via the Way Back Machine.