Over the past few months, we've discussed the challenges many Canadians face in finding not only affordable but also available housing. This problem isn't limited to any particular group; it affects both students and the elderly. A spokesperson from Niagara College pointed out in a CBC article that "students are among the most impacted by the shortage of affordable housing in our communities." Meanwhile, institutions like McMaster University and Toronto Metropolitan University are rushing to build more residences to accommodate the growing number of students they admit every year.The housing crisis isn't just a burden for our young population. When we turn our attention to the other end of the age spectrum, we encounter similar problems. Construction for retirement homes seems to be everywhere, blocking many city corners. As the baby boomer generation enters retirement age, the number of elderly individuals in our population has increased significantly. However, the housing market has not kept up with the needs of our elderly citizens, both in terms of suitable housing and long-term care.The Globe and Mail has noted an interesting trend. They state that in recent years, the number of elderly couples downsizing has decreased. More elderly couples than ever before are choosing to stay in the family homes they have owned for decades. According to The Globe and Mail, the reason for this trend is the unavailability and unaffordability of suitable spaces for older individuals. They refer to this phenomenon as "overhousing," where older people have "too much house" and cannot downsize to homes that better suit their current lifestyles and needs.Now that their children have moved out and they no longer have the physical ability to manage their larger homes as they used to, many elderly people desire to downsize. However, the solution for them isn't always to move into a retirement home. Many elderly people, when considering their lifestyle preferences, opt for environments that enable independence. It's important to remember that the solution to the housing crisis for our aging population isn't simply to build more retirement homes or encourage otherwise healthy older people to move into retirement homes, for several reasons. Concerns like elder abuse, the impact of widespread illnesses like COVID-19 in densely populated buildings, isolation, and loss of autonomy are all reasons why the elderly delay moving into long-term care facilities.One can't help but notice the abundance of assisted living centers being built on every corner. However, these centers seem to be primarily retirement homes, which are distinct from long-term care homes. The names for these facilities may be used interchangeably, but they represent different concepts. Long-term care homes receive partial funding from the Government of Ontario and are designed for older people who may require 24-hour care. This is different from the substantial construction we are seeing these days, primarily retirement homes. Retirement homes have several differences. First, they do not receive the same partial funding from the provincial government. Retirement homes are privately owned facilities that place less emphasis on healthcare and more on community living for seniors. For many older individuals who are by no means in need of 24-hour care and are not ready to relinquish their autonomy, retirement homes may be a better idea than keeping their large family homes. The problem, however, is the cost.When discussing how the housing crisis affects the elderly, we encounter problems at every turn. With older people being forced to remain inside their homes, the risk and fear of entering a long-term care home, and the cost of retirement homes deterring seniors, the solution should go beyond mere quick fixes. Addressing the housing crisis should begin at the source to help everyone.There are also opportunities for investors to assist. This housing type is intriguing because it combines the capital appreciation offered by traditional real estate with the income and cash flow of a rental property. The customers, in this case, retirees, tend to be stable, long-term residents with sufficient and measurable resources—a pool of high-quality tenants.It's crucial that we consider this market segment when assessing solutions for housing affordability in Canada. Supply is often discussed as the answer, but it's frequently framed in the context of lowering prices, without a full evaluation of the broader consequences. Many in the aging population rely almost entirely on their existing homes to finance their later years. They lack the time and resources to recover from a market shock. Consequently, I don't believe the solution is to lower prices; instead, we should focus on increasing the purchasing power of young people. How can this be achieved? By creating conditions that attract well-paying jobs to Canada and significantly reducing taxes across the board. Reducing the size and influence of government is also vital in all areas. This approach can help seniors comfortably finance their retirement and provide young people with the means to buy homes and secure their future.

Housing Crisis in Canada: Are Retirement Homes Next?

Explore RIFO’s latest article on affordable housing challenges and on its impact on seniors living and potential solutions. 

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