The market for age-restricted housing has gone bust as the economic downturn prompts many boomers, unable to sell their homes, to age in place instead.
In New Jersey, “it is much more difficult to find construction financing, and many banks are saying they will not lend at all” for such projects, says Jeffrey Otteau, president of the Otteau Valuation Group.
Meanwhile, sales of new homes have lagged so badly that many developers have asked to lift the age restrictions—typically requiring residents to be 55-plus—they had imposed. Local officials have often granted the requests, rather than have near-vacant complexes.
It’s an “issue that’s going on across the country,” says Jennifer Raitt, chairwoman of the housing and community development division of the American Planning Association. “For the last 10 years, there has been a huge influx of age-restricted housing built, or perhaps overbuilt.”
Much of it is in the South, Midwest and Southwest, where the National Association of Home Builders says not much is being built now. In at least two states outside those regions that joined the boom late, New Jersey and Massachusetts, some towns have lifted age restrictions.