It all happened faster than you can say “senior discount.”
Millions of baby boomers born into the dawn of the most spectacular economic expansion in history are being forced to re-imagine their retirement futures. Few news outlets have failed to seize upon the low-hanging pun: the boomers have gone bust.
Among the adjustments forced by the new circumstances, perhaps the cruelest twist for many boomers is the need to join younger generations in the roommate queue. The housing crash has forced record numbers of late-middle age homeowners to take in boarders or risk becoming boarders themselves. From California to Vermont, home-share organizations founded to assist the elderly are scrambling to meet the demands of newly bust boomers.
“In the last few months we've experienced explosive growth in interest by homeowners age 50-plus to find rooms and roommates,” says Jacqueline Grossmann, Chicago coordinator for the National Shared Housing Resource Center. “The trend now is getting younger and younger. People in their 50s and 60s are losing their nest eggs and increasingly willing to give up their privacy in exchange for rents of $500, $600 a month.”
“We've seen a 400 percent increase over the last few months of people nearing retirement age,” says Rita Zadoff, director of Housemate Match, a shared-housing program serving the Atlanta area. “We haven't been this busy since we helped Katrina victims find housing.”
Kirby Dunn of Home Share Vermont reports a “huge increase” of boomers seeking roommates in the last six months. “There has been a dramatic shift from elderly clients seeking a 'protective presence' to younger people with 'too much house' seeking financial help to make mortgage and utility payments,” she says.
Most of the nation's home-share organizations were set up with the disabled and seniors in mind. They now appeal to bust boomers because they are generally free services that screen potential housemates carefully. “Older people aren't comfortable finding roommates through Craigslist,” says Zadoff. “They aren't as used to the idea of letting strangers into their homes.”
Boomers are maximizing room occupancy for the same reason that their kids in their 20s and 30s are still competing for the best group rentals on Craigslist: they're broke.
The extent to which boomer wealth was based on home values is highlighted by a new report from the Center for Economic and Policy Research, entitled "The Wealth of the Baby Boom Cohorts After the Collapse of the Housing Bubble." The report details how the collapse has left the majority of those around retirement-age almost completely reliant on entitlements. The net worth of median households in the 45 to 54 age bracket has dropped by more than 45 percent since 2004, to just over $80,000. Households headed by those aged 55 to 64, meanwhile, have lost 38 percent of net wealth.
“The collapse of the housing bubble has already destroyed almost $6 trillion dollars in housing wealth for homeowners," says report co-author Dean Baker, who testified last month before the Senate Special Committee on Aging. “This is compounded by the recent collapse of the stock market. The result is that many baby boomers will only have entitlements to rely on in their retirement.”
Make that entitlements, roommates, and each other.
As more and more boomers scale down their retirement plans and consider alternative living arrangements, it's worth asking: Is shared housing such a bad thing for aging boomers? Does a return to the Communal idea, borne of economic necessity, also have emotional, social, and environmental benefits? Why wait for the retirement home or hospice to live with other people? With the nation full of worthless, ridiculously large, and mostly empty houses, why not fill them with the newly penurious and like-minded boomers in need of housing?
Better yet: why not abandon these suburban houses altogether, and find more appropriate housing arrangements closer to urban cores, or build tightly knit communities on cheap rural land?......
No joke, to work hard all your life and then come to the realisation that you are not so rich as initially calculated by your broker. But then, after the shock there might be a new life of sharing, prudence and going back to basics. Poorer, but maybe also richer?