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Naturally Occurring Retirement Communities: Friend or Foe?

By Dan Lindberg, Founder & Principal, Applied Economic Insight

According to Housing America’s Older Adults, a report released at the end of November 2023 by the Joint Center of Housing Studies of Harvard University, naturally occurring retirement communities (NORCs) house more older adults than active adult, independent living, assisted living, memory care and skilled nursing combined. 

The seniors housing sector has many of its own acronyms like CCRCs, for example, yet NORCs are one we have not paid much attention to. We should. Such communities, whether intentional or not, have high proportions of older adults — and yet, while lacking formal age restrictions, they can be eligible for funds supporting service and care. NORCs may present challenges and opportunities for the seniors housing sector.

First coined in the 1980s by University of Wisconsin-Madison urban planner Michael Hunt, NORCs are neighborhoods that organically evolve to house high rates of older adults. There are a variety of definitions of what constitutes a NORC. The State of New York considers apartment or housing complexes where 40 percent of the residents are aged 60 or older as “xlassic” NORCs and non-rural areas where at least 30 percent of residents are aged 60 or older as “neighborhood” NORCs. 

Nationally, the October 2020 report by the AARP Public Policy Institute, Which Older Adults Have Access to America’s Most Livable Neighborhoods? An Analysis of AARP’s Livability Index, finds that over 13,000 United States block groups, a census geographic boundary approximating a neighborhood, have a majority population of at least 55 years or older. 

While median household incomes in such block groups were $61,000 according to the AARP report, NORCs score lower in terms of neighborhood, opportunity and transportation amenities. For example, NORCs often lack features like parks, retail and public amenities like museums and libraries. Moreover, the AARP report notes that just over one in three NORCs rank at the bottom of livability. 

In New York, NORCs are eligible for state funding supporting services like case management, information and assistance, healthcare management, healthcare assistance, transportation, personal care, counseling and outreach activities. But such opportunities differ by state. 

Formal seniors housing communities can benefit from a potential prospect pool, strong local community ties and social networks while plugging gaps in neighborhood and transportation amenities. Efficiencies in sales and marketing will surely exist, considering the high densities of older adults in NORCs. 

Here are some action items for seniors housing owners and operators:

  • Incorporate identification of NORCs in market selection for new developments.
  • Consider the proportions of the population at least 55 and at least 65 at the block group level to identify possible NORCs.
  • Scan housing developments in block groups with high densities to identify specific apartment buildings, housing complexes or single-family neighborhoods.
  • Analyze the level and depth of services and amenities available to NORC residents.
  • Evaluate whether the NORC exists due to younger generations not desiring the community or whether it is more intentional on the part of residents.
  • Assess their relevance as either a potential competitor or a referral source.
  • Recruit NORC residents for focus groups, in-depth interviews and surveys.
  • Determine the feasibility of offering services to NORC residents like scheduled outings, dining options and access to the fitness center.
  • Evaluate the extent to which NORCs can enhance socialization amongst seniors housing residents.
  • Listen, above all else, to prospects. Direct market research is essential.

The Joint Center of Housing Studies of Harvard University report illuminates the notable role NORCs play in housing older adults. Despite their prevalence, NORCs often lack formal recognition and essential amenities, posing challenges to their livability. 

There’s a clear opportunity for established seniors housing properties to leverage NORCs’ local ties and social networks by bridging gaps in amenities and services for older adults.

Dan Lindberg is the founder and principal of Applied Economic Insight LLC, which enables municipalities, developers, owners and operators to enhance living environments through market feasibility, financial analysis and analytic consulting services. He has a graduate degree in economics, teaches courses in business analytics at Marquette University, and his article “The price elasticity of senior housing demand: is it a necessity or a luxury?” published in Business Economics won the 2022 Contributed Paper Award with the National Association for Business Economics. His firm is part of the network of healthcare consultants Stackpole and Associates.

The post Naturally Occurring Retirement Communities: Friend or Foe? appeared first on Seniors Housing Business.

Source: Senior Housing Business

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