10,000 Retiring Baby Boomers every day. Every Day, for the next 20 years. Locally and nationally, even globally, this is our new demographic normal – an aging population with fewer and what baby boomers would have you believe, “less talented” workers to replace them.
Bigger than huge, this is a monumental generational shift that will affect numerous aspects of our lives – opportunities, obligations, and financials. State Economist, Dr. Stinson, recently spoke on the new normal in his Economic Outlook, noting “As a significant portion of our [Minnesota's] population ages, there is not much in the way of labor force growth to replace these individuals.”
Seniors have increased in number rapidly since 2010, accounting for a larger proportion of the total population. By 2020, 18 percent of Minnesotans are projected to be more than age 65, compared to 12.5 percent in 1990. Following, a relatively small number of workers will have to support a large number of retirees (and children). According to the Wilder Foundation, “Currently, for every 1 person of retirement age in the Twin Cites there are 6 people in their prime working years, age 18 to 64. If current projections hold, by 2030 that ratio will be cut in half with just 3 workforce-aged people for every 1 person in their golden years.”
The implications for CRE concerning this generational shift are vast. An imperative topic in development and planning, UST graduate students in Real Estate at the University are closely studying and working to address the new demographics of Minneapolis in both Market Analysis and Urban Land Economics taught by Dr. Hamilton.
Through qualitative and quantitative market research coupled with urban land economic policies and law, students focus on the What, When, Where, Will and How questions pertaining to the demographics and trade area as well as identify strengths, weaknesses, opportunities and threats (SWOT analysis) of issues surrounding their concept.
In developing real estate and social concepts suited to the new fundamentals, students work on a semester long redevelopment concept (“Twinsville”) pitching a multi-use, multi-generational new urbanism development. Senior living, err retiree living, is one component of the pitch; integrated with other needed housing concepts (including teacher housing), parks and the natural environment, businesses, education and more. Chiefly important is that the site be developed to Pareto Optimal and/or Pareto Efficient standards.
In considering pareto optimality, students are challenged to formulate solutions throughout their concept to help meet the challenge posed by the new demographic normal. Working particularly to find solutions for the disportionate amount of workers to retirees, students work to integrate options for retirees to contribute to the community while living in a new urbanism environment — connected, sustainable, integrated, feasible and representative of the Minneapolis community.
The new normal of demographics pose new challenges, according to Dr. Stinson, “there will be much more uncertainty going forward, creative destruction, a shift in balance between private and public sectors, and a worry to pay for past promises.” But with these challenges, Stinson encouraged, arise a new set of opportunities for those who understand the new normal and can meet it.