The U.S. housing market may appear to be shaped by the young, but with more than half of the nation’s households headed by someone 50 years of age or older, it’s time more focus is given to the nation’s 65 million older households.

Our graying nation desperately needs to diversify and develop housing for older renters and owners, according to Housing Americas Older Adults, a new report from The Harvard Joint Center on Housing Studies (JCHS). Demographics alone suggest the so-called silver tsunami of older Americans is just starting to crest; while the growth in households in their 50s and 60s will actually slow down in coming years due to a speed bump in birth rates a few decades ago, the number of households in their 70s, 80s, and 90s will soar.

“Between 2010 and 2040, the nation’s 65-plus population will grow by roughly 90 percent,” says Hamilton Lombard, a demographics researcher for the University of Virginia. “In some areas of the country, most of the population growth will come from retirees.”

The nation’s housing stock just isn’t ready.

“There’s an absence of options,” says Jennifer Molinsky, a senior research associate at the JCHS and lead author of the report. “It’s not just a lack of support for subsidized housing. I’m worried we won’t have the kind of housing and services for middle-income folks, as well.”

The number of U.S. households age 80 or over already jumped 71 percent between 1990 and 2016, from 4.4 to 7.5 million. By 2037, it’ll double. This shift, coupled with other dynamics at play among the housing market at large, including widening inequality and shrinking subsidies for affordable housing, makes the provision of safe, accessible, and affordable places for seniors a huge and immediate challenge.

“In general, I always like to come back to the planning and preparedness piece,” says Sue Johansen, a vice president at A Place for Mom, an assisted living referral service. “There’s a lack of awareness and preparation for the dynamics of senior living.”

Everybody wants livable, walkable, urban neighborhoods, even seniors

The senior housing landscape shares many similarities with the housing market at large. Builders and developers have focused on providing homes and rental options in or near urban centers or walkable suburbs with numerous lifestyle features. According to a recent senior housing marketing analysis by the commercial real estate firm CBRE, 40 percent of investors believe the independent living sector offers the greatest opportunity for investment. A recent industry report by JLL, a global real estate firm, noted that more developers are focusing on urban infill projects to take advantage of this demand.

Seniors want livable, walkable, urban neighborhoods, and developers are responding in kind. According to Matt Sauls, a vice president at Pardee Homes, which is developing a 704-home project in Beaumont, California, aimed at the 55-plus demographic, older buyers, half of whom will still be working, are searching for a place that offers lifelong learning and more social stimulation.

“This is a launching pad, not a pasture,” he says of Altis, the development taking shape near Palm Springs. “We built everything around that idea.”

For many older retirees with resources and home equity, living in Altis—a collection of homes boasting high-end design, indoor-outdoor living, and flexible floorplans—or places like them represent a great opportunity. Catering to a new old age focused on a less-sedentary lifestyle—one that craves design—developers are building more active communities and downtown condos. Sauls sees at least another decade of high demand.

“In many ways, we hear the same from them as we hear from millennials,” he says. “‘I don’t want stuff, I want experiences.’”

The great sorting out of seniors in the United States

As Molinsky’s report points out, at the same time changing views of old age have shifted how we look at senior housing, there’s also widening inequality within the senior population, on many dimensions. The black-white homeownership gap between those 50 and older is 81 percent to 57 percent, the largest disparity since JCHS began tracking this stat in 1976.

There’s also a great sorting out in where older Americans are living. In addition to shifts toward multigenerational living, with nearly 11 million older adults living in households where at least two generations are present, seniors have become increasingly concentrated.

Between 2000 and 2016, the number and share of census tracts in the country with a majority of older adults jumped from 1,499 to 4,764. Those with means are congregating in senior living communities—communities in less urban parts of California, Michigan, Oregon, and North Carolina, as well as traditional Sunbelt destinations such as Phoenix, Miami, and Sarasota, Florida—as urban areas are losing their senior population due in part to rising prices (95 of the nation’s 100 largest metro areas saw a net loss of older adults).

The most troubling shift may be how economically struggling rural and exurban areas, which are losing young adults, are increasingly home to concentrated populations of older adults who lack the means to relocate and end up aging in place. The share of older adults living in low-density metro tracts rose from 24 percent to 32 percent between 2000 and 2016. That means 6 million more seniors reside in more spread-out parts of the country, where medical and social services are harder to provide and senior housing options are lacking.

Overall, the number of very low-income, housing burdened seniors has increased. According to HUD data, the number of Americans 62 or older with severe housing cost burdens, defined as spending half their income or more on housing, rose from 1.5 to 1.9 million between 2013 and 2015. Only one in three of these households received housing assistance. Most of the 43 overall growth in older renters since 2016 has been among households earning under $30,000 a year, reflecting the long-term damage of the foreclosure crisis, as well as the aging of low-income renters.

The spillover effects on this population are severe. The Consumer Expenditure Survey found that severely cost-burdened older households spent 53 percent less on food and 70 percent less on healthcare, and older renters are much more likely to live alone as they age.

Pre-retirement seniors face a big wealth gap

The report found a big difference between today’s retired population, and the current over-50 demographic. Many signs point to a degree of stability. The majority of older Americans still own their homes; 76.2 percent of households over 50, and 78.7 of those over 65, are homeowners. In fact, 63 percent of homeowners in the nation are over 50.

But as baby boomers age, overall financial certainty is poised to decrease. The rate of homeownership of households aged 50 to 64 has declined steadily since 2004, meaning “many of these households will be unable to generate the same levels of wealth for retirement through equity building,” according to the report. Currently, a quarter of households 50 or older rent. Since the median income of older renters ($28,000) is less than half that of older owners ($61,000), the 50 to 64 age group will face increasing financial burdens and challenges as they age.

Looking at stats on home value and household wealth suggest a bit of a demographic time bomb. Between 2013 and 2016, the net worth of households age 80 and older rose 41 percent, to a record-setting $272,000. For households aged 60 to 79, wealth remained constant at $230,000. Things were starkly different for the 50 to 64 cohort. Despite a 15 percent jump in wealth over these three years, their wealth stood at $170,000, $100,000 lower in real terms than in 2017. And within that 50 to 64 group, the number of households with less than $20,000 in wealth increased from 15 percent to 22 percent in 2017.

“There’s a concern there will be a lot more low-income seniors moving into retirement homes and senior living going forward,” says Harvard’s Molinsky. “It’ll require a much greater amount of subsidies, and affordable housing, for those at the bottom end of the wealth and income scales.”

A need to increase options and diversity

When viewed as an ecosystem, the country’s senior housing lacks proper diversity. Like the housing market at large, the senior housing marketplace needs to focus on providing a wider array of affordable and accessible housing options. Those older Americans with mobility challenges face a dearth of options; according to the latest available estimates from 2011, only 3.5 percent of the nation’s homes had single-floor living, no-step entry, and extra-wide halls and doors.

There are solutions at hand, according to Molinsky, such as increasing subsidies and the number of low-income units, as well as supporting programs to modify homes with assistive devices to make aging in place easier. Often, the difference between keeping a senior in their own home and sending them to an assisted living facility funded by Mediaid is a few relatively simple and inexpensive home renovations.

According to A Place for Mom’s Johansen, the impact of seniors on the housing marketplace will be significant over the next few decades. The question for providers and developers will be, how can I get ahead of this?

“We’ll have to deal with the federal and local response to those seniors that need placement and can’t afford it,” she says. “Necessity will hopefully drive future development.”