The re­tire­ment vil­lage ef­fect

Re­tire­ment vil­lage busi­ness is boom­ing but what will it mean for you if one ap­pears in your neigh­bour­hood? Su­san Ed­munds re­ports.

Sunday Star-Times - - BUSINESS -

If you wan­der the streets of Orewa any week­day, you will see cafes full to burst­ing and shop­pers brows­ing racks of ex­pen­sive cloth­ing.

One thing they might all have in com­mon? Grey hair.

Orewa is one of Auck­land’s ma­jor re­tire­ment vil­lage hubs, with half-a-dozen of the de­vel­op­ments within its bor­ders. Units, town­houses and vil­las sit on the hills over­look­ing the sub­urb, look­ing down on their own bowl­ing greens, swim­ming pools and gar­dens.

Lo­cal busi­ness as­so­ci­a­tion man­ager He­len Wilkins says the lo­cal busi­ness­peo­ple do well from them.

While the younger res­i­dents are at work, cafes do a brisk trade with re­tirees. The res­i­dents in these vil­lages are ac­tive, eat­ing out of­ten and not afraid to drop $300 on a shirt, she says. Some have paid more than a mil­lion dol­lars for the rights to their homes.

That’s re­flected in the make-up of the shops. If you wanted cheap clothes for a trendy teenager, you’d be out of luck.

‘‘It used to be that peo­ple said you went to Orewa to die but that’s not so.’’

Spend­ing by those aged 65 to 69 in­creased 11.2 per cent year-onyear last year, and those aged 70 to 74 spent more than 10 per cent more. About 30 per cent of Orewa could be classed as ‘‘su­per troop­ers’’, Wilkins said, fi­nan­cially in­de­pen­dent re­tirees.

Michael Gunn, se­nior di­rec­tor for re­tire­ment hous­ing and health­care at prop­erty firm CBRE, says Auck­land can ex­pect to see more of the re­tire­ment vil­lage ef­fect.

He es­ti­mates, con­ser­va­tively, there are 18,000 units in developers’ pipe­lines, the high­est num­ber ever recorded and equiv­a­lent to 51 per cent of ex­ist­ing stock.

Metlife­care last month re­vealed its 29th site would be on three ad­join­ing prop­er­ties in Beach­lands, of­fer­ing more than 200 units and care beds. The com­pany is re­ported to have a goal of adding 300 beds a year by 2020.

The Re­tire­ment Vil­lage As­so­ci­a­tion pre­dicts the num­ber of peo­ple aged 75 and over will dou­ble by 2043, in­creas­ing from 306,730 to­day to an es­ti­mated 783,600.

About 13.5 per cent of over 75-year-olds lived in re­tire­ment vil­lages in 2017, com­pared with 9.8 per cent in 2008. Most have bought the rights to oc­cupy their homes, rather than own­ing them out­right.

They pay weekly fees and the vil­lage makes most of its money when they sell, pay­ing a pro­por­tion of their orig­i­nally in­vested cap­i­tal to the vil­lage op­er­a­tor, which sells the rights on to an­other in­hab­i­tant, of­ten for a higher price.

While the vil­lages of the 1990s might have been vil­las and town­houses spread out around gar­dens, these de­vel­op­ments are in­creas­ingly likely to be high­den­sity, of­ten high-rises.

So what does it mean for the ar­eas these vil­lages move into?

Devel­oper Graham Wilkin­son, who is also the pres­i­dent of the Re­tire­ment Vil­lages As­so­ci­a­tion, said Auck­land and Christchurch coun­cils had made it marginally eas­ier for re­tire­ment vil­lages.

‘‘Be­fore, you had to build a cer­tain num­ber of units or a type of unit in a space and you could have been non-com­pli­ant be­cause the num­ber of units on the site was too many.

‘‘Now it’s dis­cre­tionary based on the ef­fect on the en­vi­ron­ment. That’s al­lowed peo­ple to put for­ward de­vel­op­ments on a large scale.’’

He said it recog­nised that re­tire­ment vil­lages did not put as much strain on coun­cil ser­vices, such as wa­ter or wastew­a­ter, as a tra­di­tional hous­ing es­tate.

‘‘A tra­di­tional hous­ing es­tate would have 2.4 per­son av­er­age oc­cu­pancy. The oc­cu­pancy of a re­tire­ment vil­lage is half that. It’s all about the ef­fect on the sur­round­ing ar­eas of the vil­lage.’’

Auck­land Coun­cil said in a state­ment that it as­sessed vil­lages in the same way it would any re­source con­sent ap­pli­ca­tion, in­clud­ing an apart­ment de­vel­op­ment. But it rec­og­nized that the vil­lages could gen­er­ate less traf­fic - al­though this was as­sessed on a case-by-case ba­sis.

The coun­cil's reg­u­la­tory team "typ­i­cally ob­tains as­sess­ments from traf­fic, noise, land­scape, ur­ban de­sign and en­gi­neer­ing spe­cial­ists" to de­ter­mine the ef­fects of the pro­posed re­tire­ment vil­lage on the area.

Coun­cil en­gi­neers also con­sulted Water­care and Healthy Wa­ters over whet her there was suf­fi­cient in­fra­struc­ture to sup­port a vil­lage.

Re­search com­mis­sioned by the Re­tire­ment Vil­lage As­so­ci­a­tion showed each new 250-unit vil­lage would sup­port 303 full-time equiv­a­lent staff and con­trib­ute $21.4m in de­sign, con­struc­tion and fit­tings.

"Day-to-day op­er­a­tions in the re­tire­ment vil­lage in­dus­try con­trib­uted around $1.1 bil­lion to the coun­try's GDP in 2017, ac­count­ing for roughly 0.4 per cent of the to­tal GDP," chief ex­ec­u­tive John Col­lyns said.

This was sim­i­lar to the value added from de­part­ment stores or the mo­tor ve­hi­cle re­tail­ing in­dus­try in 2016.

Col­lyns said there was a clear de­mand from older peo­ple for re­tire­ment vil­lages be­cause they met a num­ber of im­por­tant needs.

"Sell­ing the fam­ily home not only re­leases tens: of thou­sands of

dol­lars in pent-up eq­uity, it also re­leases a fam­ily home back to the mar­ket.

‘‘The ex­tra cash added to re­tire­ment sav­ings of­ten means a sig­nif­i­cant im­prove­ment in the older per­son’s qual­ity of life, as they have the re­sources to do things they couldn’t do be­fore.’’

But ANZ com­mer­cial and agri gen­eral man­ager Penny Ford said it was no­tice­able that baby boomer re­tirees were look­ing for some­thing dif­fer­ent from a vil­lage.

The same-old same-old just wouldn’t cut it any­more. They were the for­ever young gen­er­a­tion, and wanted fa­cil­i­ties that met their per­sonal needs in terms of se­cu­rity and com­fort, but were also in line with the life­style they were used to.

‘‘Just be­cause they have retired doesn’t mean they want to slow down. In­stead of a bowl­ing green and li­brary, they are look­ing for cin­e­mas, restau­rants and a place to park the Har­ley – they want to stay ac­tive and so­cial.

‘‘They also want a fa­cil­ity that’s in­te­grated into a com­mu­nity, where ev­ery­thing is close and handy.’’

As­so­ciate pro­fes­sor Caro­line Miller, from Massey Univer­sity’s School of Peo­ple, En­vi­ron­ment and Plan­ning, said peo­ple didn’t go into vil­lages ‘‘and dis­ap­pear’’.

Most wanted the same fa­cil­i­ties they had be­fore they shifted, the same li­brary, the same church.

If they were mov­ing to a vil­lage in a newly es­tab­lished part of town, they would put pres­sure on for the same fa­cil­i­ties other res­i­dents wanted, she said.

‘‘If they are go­ing into a city fringe area, that whole com­mu­nity prob­a­bly doesn’t have a huge range of com­mu­nity fa­cil­i­ties and ameni­ties – they may not have li­braries and the things that re­tire­ment vil­lage res­i­dents want. It’s ac­tu­ally what the sur­round­ing pop­u­la­tion wants, too.’’

Wilkin­son said most vil­lages had close ties with their com­mu­ni­ties. ‘‘Our bowl­ing club in Tau­ranga acts as a full bowl­ing club for the com­mu­nity in the area. It’s an add-on ben­e­fit for neigh­bours.’’

An­other devel­oper, Arvida chief ex­ec­u­tive Bill McDon­ald, said his firm was mov­ing to­wards cre­at­ing some of the fa­cil­i­ties res­i­dents wanted within the vil­lage it­self, rather than re­ly­ing on ex­ter­nal sup­pli­ers.

Those ‘‘out­wardly fac­ing com­mu­nity fa­cil­i­ties’’ would in­clude fea­tures such as health­care providers and chemists, he said.

If you were hop­ing a vil­lage next door might bring prices down in your area, though, you’re out of luck.

Wilkin­son said even a large vil­lage would not have suf­fi­cient scale to af­fect lo­cal prices.

‘‘I don’t think an in­di­vid­ual apart­ment block would make a dif­fer­ence. You’d need 2000 units, not 200.’’

He said vil­lages had to be in sync with the prices of the sur­round­ing area.

‘‘At the end of the day, that’s where peo­ple are go­ing to come from, that’s what they can get from their prop­erty. They want to move in and have cash left over.’’

One he was in­volved in, in Tau­ranga, had 40 per cent of its res­i­dents come from out­side Tau­ranga, mostly from Auck­land. They were able to sell their houses and put $1m in the bank.

Col­lyns es­ti­mated about 4500 houses a year were freed up by re­tirees mov­ing to vil­lages.

Wilkin­son said find­ing sites for new vil­lages was the hard­est part. ‘‘That’s why we have seen more high-rises and we will see more.’’

MARTIN DE RUYTER/STUFF

A sign in Stoke, Nel­son, near the Ernest Ruther­ford Re­tire­ment Vil­lage, epit­o­mises the rapid growth of re­tire­ment vil­lages. Com­pan­ion­ship is one of the lead­ing at­trac­tions of re­tire­ment t vil­lages

Cafes and a bet­ter menu are be­com­ing ex­pec­ta­tions in mod­ern rest homes. Metlife­care hired celebrity chef Si­mon Gault to de­sign its menu.

KELLY HODEL/STUFF

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