Active retirees and seniors, many blessed with longer life expectancies than their parents, want a combination of recreation, socialization and intellectual stimulation in their golden years.
In many ways, students and seniors favor similar amenities: cheap and diverse food, moderately priced and right-sized housing and access to good transportation. Plus, teaching-hospital affiliations bring the vital convenience of cutting-edge health care right to the edge of campus.
"University communities have a higher percentage of people with bachelor's degrees or more, and per-capita income tends to be higher," says Gary Abney, an agent at Prudential Don Foster Realtors and chair of the Board of Regents for Eastern Kentucky University in Richmond, Ky.
Retirees in Richmond take advantage of the university's library, gym, a performing arts center and an international film series. The school's Division of Continuing Education and Outreach offers some 120 courses ranging from writing to genealogy to American Sign Language. The school is invested in its community; individuals age 65 or older are entitled to enroll in community education classes for a small processing fee because of O'Donnell Scholarship funding.
Other tuition breaks are available around the country. For example, adults 62 and older are eligible for tuition waivers at any Connecticut public college or university in the state, including the University of Connecticut, Connecticut State University and the 12 community colleges. Generally, waivers are available only when space exists at the end of a registration period. Other fees, and costs for books and supplies, are not waived. Many other states operate under similar rules.
Do your research. Retirees do face trade-offs in college towns, says Jay Butler, professor emeritus in real estate at the W.P. Carey School of Business at Arizona State University in Tempe. Major university-affiliated medical centers will tend to be in slightly larger locales where retirees and seniors will have to contend with population congestion, but they will also have more public transportation options. Arizona State is part of the Osher Lifelong Learning Institute's 117 university-affiliated programs, offering lectures, short courses and workshops.
These types of programs also encourage university professors to remain in town for their own retirements, says Butler. Osher courses are taught by ASU faculty, emeritus faculty, and community scholars.
The economic stability associated with higher learning institutions has helped college real estate markets hold up relatively well during the national housing slide, allowing retirees to retain a greater percentage of home equity than the national norm. Still, generally lower prices in this setting, as with much of the rest of the country, make for a buyers' market. That's attractive to the newly retired or others living on less income than they once did.
"I think that college towns are very fortunate in that they are a little insulated, which is particularly true of the Research Triangle Park area (of Raleigh-Durham, N.C.)," says Marybeth Dennett, an agent with Triangle Star Realty in Durham. "We have the extreme good fortune of having so many colleges (the University of North Carolina, North Carolina State University and Duke University) within miles of each other. It has kept us on a plateau, while others have dipped into valleys."
The tendency for medical, research, technology or light industrial companies to set up shop near colleges and universities, particularly in midsize to larger cities, also supports the local economy. North Carolina's Research Triangle Park, one of the oldest research parks in the country, is home to 137 companies and employs 42,000 people.
But there is a downside to stability. The cost-of-living in college towns might remain elevated relative to other changes in a resident's financial profile, such as declining stock portfolio values.
"College economies, especially private schools, generally hold up better than the rest of the economy. Hence, the relative decline in cost of living has declined least in those areas," says Harlan Platt, economist and professor of finance at Boston's Northeastern University. "However, many of these schools are in rural America, and so started out with lower costs."
Retirees should also take into consideration a state's income tax level and weigh any special rules for seniors. Some states don't have income tax, while others exempt some Social Security and pension income.
Overall, price stability lowers risk. It's this stability that encourages development of multi-unit independent- and assisted-living facilities that maintain relationships with higher-learning institutions.
One such affiliation is between Miami University in Oxford, Ohio, and The Knolls, a continuing care retirement community a mile and a half from campus. The affiliation, launched in 2005, is one of more than 100 such partnerships between colleges and nearby retirement centers. Their facility draws national demand because of the special relationship, says Tim McGowan, director at The Knolls of Oxford.
Meeting needs. The community has experienced some slowing demand during the recession, in part because weaker home sales prices and volume cut into would-be residents' ability to get enough value out of their homes to raise the upfront funds required for the facility's residency contracts. The Knolls has offered creative financing incentives, including subsidizing deflated housing prices so new residents could get out from under their existing homes by selling at the prevailing weaker market prices.
Students and seniors forge long-term relationships as part of a volunteer and part-time work program — friendships are the bonus. Students from a variety of disciplines come to The Knolls, but the school's Scripps Gerontology Center's research and resource capabilities brings aging issues to the fore.