Unlocking the Silver Economy: Addressing Senior Housing Needs
The real estate sector is overlooking the housing needs of senior citizens, despite the growing demographic of those aged 60 and above. This article explores the reasons behind this market failure and proposes policy solutions to incentivize developers.
Senior CitizensReal EstateAffordable HousingSilver EconomyPolicy IncentivesReal Estate NewsJul 29, 2025
Why developers shy away from senior housing
The big question naturally is, why is India’s real estate sector—whose contribution is forecast to touch 13% of GDP by 2025—not addressing the silver economy? A proximate factor is that in most housing projects, the developer’s responsibility ceases once they have handed over the premises to the owners. Senior living projects, however, entail a longer commitment as they entail the provision of assisted living, access to healthcare facilities, and spaces for community interaction. The investments necessary for such facilities may not necessarily align with the business model of most developers. Even so, the real estate sector is ignoring a golden opportunity to address a fast-rising demographic segment. Around 26.7% of the urban elderly live either alone, with only their spouse, or with people other than their spouses or children, according to the Longitudinal Ageing Study of India. To be sure, some of them do have financial constraints, highlighting the need for affordable senior living solutions.
How policy can unlock the silver housing market
In this milieu, the government has a huge role to play in incentivizing developers to cater to senior housing. One way forward is by creating 500-acre zones like the special economic zones (SEZs) near national and state highways between 100 and 300 km of big cities like Delhi, Gurgaon, Mumbai, and Bengaluru, according to an interesting proposal by Amnaya Sheel, who is currently studying at Columbia University. The government must provide necessary infrastructure like healthcare facilities, parks, and shopping complexes through public-private partnerships. Contiguous plots of land must be given to developers at a concessional rate, as well as subsidized cost of capital.
A tax holiday is necessary, similar to developers of SEZs, besides single-window permissions and licenses for project development. With these incentives, affordable housing solutions for senior citizens can provide a healthy internal rate of return of 26% for real estate developers, according to Sheel. Such projects will definitely align with their business models. For the elderly, it provides a perfect environment in which they can cherish the remainder of their lives. The market penetration by senior living players is bound to rapidly increase. This is the way forward for affordable housing projects in smaller cities and semi-urban areas to take off, even as the brisk off-take of higher-end offerings in the large cities dominates the news cycle.
Frequently Asked Questions
Why are real estate developers not addressing the housing needs of senior citizens?
Real estate developers are often reluctant to address the housing needs of senior citizens because senior living projects require longer commitments, including the provision of assisted living, healthcare facilities, and community interaction spaces. These investments may not align with the business models of most developers.
What is the projected percentage of the population aged 60 and above by 2050?
By 2050, it is projected that 19.5% of the population in India will be aged 60 and above.
What is the current market penetration of senior living players in India?
The current market penetration of senior living players in India is just 1.3%, compared to 6% in the US and Australia.
What policy incentives are suggested to encourage developers to invest in senior housing?
Policy incentives suggested to encourage developers to invest in senior housing include creating 500-acre zones like SEZs near highways, providing necessary infrastructure, offering concessional land rates, subsidizing the cost of capital, and implementing tax holidays similar to those for SEZ developers.
What is the potential internal rate of return for developers in senior housing projects?
According to Amnaya Sheel, affordable housing solutions for senior citizens can provide a healthy internal rate of return of 26% for real estate developers.
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