Retirees scaling back their housing costs – but not their lifestyles

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This is part of the Globe and Mail's week-long series on baby boomers and how their spending, investing, health and lifestyle decisions could affect Canada's economy in the next fifteen years. Is Canada ready for the boom?

For more, visit tgam.ca/boomershift and on Twitter at #GlobeBoomers

Phil and Charleen Goodwin plan to retire some time in the next five years, sell their bungalow in north Toronto and buy a cheaper home outside of the city.

The couple, both in their late 50s, work in the communications industry and don't have the benefit of company pensions, so the real estate boom that has driven up prices of homes in Toronto has been a major boost to the Goodwins' retirement plans.

"It makes a big difference," Mr. Goodwin says. "If we had pensions, we would be in a different situation."

But like many boomers who are looking to move as they head into retirement, downsizing for the Goodwins has meant scaling back on their housing costs, not their square footage.

Mr. Goodwin estimates the couple can find a similar-sized house in a smaller city in Southern Ontario for half of what they sell their house for in Toronto. Several of their neighbours have already done the same, in some cases buying even bigger homes in the suburbs. Mr. Goodwin is looking to own a home with a yard and enough parking space for the couple to buy a second car. "We're not ready for a condo right now," he says. "I love the outdoors too much and I'd like to stay outside."

As boomers rewrite the notion of what housing choices look like in retirement, developers are scrambling to understand a generation that many expected would sell their suburban homes and move into urban high-rise condos and golf-course communities, or do as their parents did and eventually sell the family house in favour of a retirement home.

But boomers are not their parents. By the time they retire, boomers will have owned, on average, four homes over their lifetime, says Don Shiner, an associate professor of marketing at Mount Saint Vincent University in Halifax who has studied the housing needs of aging Canadians. They are more willing to move to find a place that fits their hobbies and lifestyles and reluctant to consider living in residences designed for seniors. Long accustomed to debt, they are far more open than their parents' generation to carrying a mortgage in retirement.

Of the roughly one third of boomers who plan to move in retirement, half are actually looking to up-size their homes, according to a study last year by Demand Institute, a U.S. consumer trends think tank. Most were looking to move into single-family homes. Half were willing to take on a more debt to afford it.

While many say they also hope to stay in their homes as long as possible, boomers don't necessarily consider "home" to be the place where they're now living, says Prof. Shiner, himself a boomer at age 67. "Home means being near the people you love, being able to do the things you love and being able to be in control of your life," he says. "It doesn't mean living in the middle of nowhere in a brownfield high-rise knowing no one."

Retirement home developers say a major challenge for the industry is how to design seniors housing that juggle aging boomers' demands for spacious homes and bespoke services with the reality that many won't be able to afford the cost of traditional retirement residences that typically come complete with meals, laundry service and health care. "How do we appeal to the tsunami [of retirees] coming down the pipeline, but at the same time keep it affordable?" Peter Gregor, director of development at Ontario home builder Nautical Lands Group asked a seniors housing conference last week. "Not all baby boomers have that big nest egg."

Increasingly, boomers are looking to fulfill their lifestyle aspirations by selling their homes, cashing out the equity and renting instead.

Both retired and nearing their 60s, Gary and Cindy Reed have put their four-bedroom home near London, Ont., on the market with plans to invest the proceeds and buy a motorhome to travel with their dog, Copper. They also plan to rent a townhouse as a home base.

"We can basically lock the door behind us and not worry about the maintenance that it takes to run a full household," Mr. Reed says. "Although it's not a big home, it requires constant upkeep, and it does take that extra bit of money that could be better spent on our desires to travel and be a little more footloose and fancy free."

Tom and Sharon Kaye sold their home in 2011 and are renting a townhouse in Kingston where Mr. Kaye came out of retirement for a contract with the National Parole Board. The rental is a trial run for the couple's plan to eventually purchase a four-bedroom townhouse in Windsor, Ont., a location they picked because homes were affordable and because the city offers easy access to several airports. The couple is also budgeting at least $75,000 for renovations to customize the property. Renting a townhouse in the meantime "sold us on the whole ideal of being able to just close the door and go travel," Mr. Kaye says.

The drive for individuality and community that is so important to boomers is fuelling new types of "naturally occurring" retirement communities, Prof. Shiner says. One trend is "co-housing": neighbourhoods of private homes built around shared facilities such as communal kitchens and gardens. Others are developing around shared interests. He points to a successful seniors community in Colorado designed around a shared love of skiing and one in Vermont aimed at birdwatchers.

In many cases these self-styled retirement communities look nothing like the seniors homes of the past – and that's exactly why boomers like them, Prof. Shiner says. "We're going to demand housing services that reflect who we are," he says. "We don't care if developers or governments are ready or not."