LA’s aging population is creating new business opportunities
The population in LA is getting older. Much, much older. According to the Los Angeles Report on Healthy Aging produced last year by USC, “Population projections from the California Department of Finance indicate that the Los Angeles County population will grow older in the coming decades...considering just the oldest-old adults, the age group 80 years or older will grow nearly 50% from 2020 to 2030.”
In the 65-80 category, the growth is projected at 43%. That’s a growth of about 4 million people in LA alone. Nationally, it’s about three times the growth of the 18-49 segment. So much for the millennials taking over the market.
What does this mean for the economy in LA? Big money. Companies looking to capitalize on the burgeoning market are finding new ways to grow their services and expertise in the Los Angeles area.
In an interview with Taimur Hyat, chief strategy officer at PGIM, the $963 billion global investment management businesses of Prudential Financial, the statistics show how the trends are playing out in the financial sectors: “Two things stuck out at us as we looked at all the data on aging,” said Hyat. “One was the amount of elderly people in emerging markets...this is especially relevant to the United States...over 50 percent of wealth and spending is concentrated among people in the boomer bracket and to a large extent, they define which sectors do well.”
Prudential’s report on Global Aging found that consumer spending in the 65+ market would come with a huge amount of opportunity, centered in the real estate, healthcare and technology industries. In particular, this meant broad opportunities in senior housing and real estate for biotech startups, medical, and research companies.
According to Senior Housing Analytics, demand for senior housing in the U.S. alone will surge by 850,000 new units by 2030, a 75 percent increase from 2010. Los Angeles markets are already addressing this trend. A visit to SeniorHousing.net shows 280 senior housing, assisted living, and continuing care facilities throughout LA county and many new ones currently being built.
Fountainview, built as independent living environment with continuing-care facilities such as assisted living and memory-care apartments, is scheduled to open in Playa Vista later this year. The Sunrise Senior Care company, which has over 300 senior living facilities in the US, U.K. and Canada, 41 in California alone, opened its newest facility in Torrance in February. At a cost of upwards of $175/sq. ft. to build, not including land, furnishings, medical and emergency infrastructure, and operations costs, these facilities are one of the most costly to construct, but also one of the most profitable.
Local companies like Lotus Senior Services are hoping to address the needs of seniors relocating from their homes to assisted living environments. Debbie Sutz, owner of Lotus, saw the opportunity to be of service helping seniors get the maximum amount of funds from their home sale. A mixture of market positioning, effective and tenacious sales and negotiation are used to obtain the biggest profits.
Their approach includes partnerships with companies who specialize in everything from downsizing and de-cluttering, estate sales and moving, and packing and unpacking. With companies like Gentle Transitions of Manhattan Beach, these moves include everything from putting clothing away, hanging pictures on the walls, plugging in TVs and phones, and making the beds.
Personal experience brought Debbie to the industry. “I saw how first hand how vulnerable our seniors can be when my grandmother was still living in her home alone in her 90’s,” Debbie reflected. “Seniors frequently get taken advantage of, which I find deeply disturbing. Usually their home is their biggest asset and sometimes it’s all they have. We want to make sure seniors have a strong and honest advocate, a defense team of sorts, as they go through the relocating process. We want to make certain seniors realize the biggest possible profits on the sale of their property and be protected while doing it.”
Debbie’s business partner, Geoffrey Selzer, sees how much need there is in the growing senior market, and how the additional needs the senior market may require. “We know how big the market is. We’ve been in real estate for nearly 20 years and know the demographics. We handle our work with seniors with extra care because we know how overwhelming the process is in general. We treat our clients as if they are members of our own families.”
Many seniors who choose to stay in their homes will face other obstacles, including living in homes that aren’t well suited for their changing needs. Accessible bathrooms, handrails and ramps may need to be added for safety. To address these changing needs, Lotus has a wing dedicated to home improvements and utilizes a team of contractors versed in home safety and accessibility.
Seniors who choose to remain in their homes are beginning to have access to new services previously limited to the smartphone-savvy generation. Companies like Uber and Lyft both recently announced partnerships with phone service providers who cater to the senior market, enabling seniors to call in to an operator and request rides, rather than utilizing an app. And CareLinx, launched in 2011, created a database designed to connect people who have aging parents or disabled family members with nursing or medical assistants who are looking to be hired as freelancers.
For Los Angeles in general, the outlook is getting better. To address the needs of LA’s growing senior population, LA’s Mayor Eric Garcetti signed the Purposeful Aging LA directive this year, a taskforce of liaisons from 14 City departments working to create a strategic plan to adjust public infrastructure and services to more closely match the needs of older adults. “...we commit ourselves to better understanding and meeting the needs of older Angelenos — a growing population that deserves our attention and respect. That means we are now increasingly factoring in impaired physical mobility and diminished sensory awareness, as well as accounting for economic limitations.”, said the Mayor.
We can hope that the next wave of changes from the Mayor’s taskforce will increase Los Angeles’ appeal as a place where seniors can have access to the best care, resources, and facilities possible. If those elements continue to grow, it appears that LA can also look forward to increased income and jobs from companies looking to capitalize on the massive, and lucrative, market.
Co-written by Twyla Monti