Many retirees choose to settle in a community where the activities and amenities fit their age and lifestyle. This kind of community is more commonly known as a “55+ community”. While searching for the best 55+ spot for you, you may have stumbled upon the 80/20 rule.
What is the 80/20 rule in a 55+ community? For a community to be considered 55+, 80 percent of its units must be resided by a minimum of one person with an age of 55 and above. There’s no specific requirement for the remaining 20 percent.
When planning for retirement, one of the greatest things to consider is the community to settle in. Some may be lucky enough to have purchased a home during their younger years and already decided that it’s going to be their forever homes. However, there are still some who haven’t. There may be some who still wish to transfer to a better community despite already owning a house.
To better understand, first we have to tackle the necessary information concerning this one.
The Fair Housing Act
The Fair Housing Act, which was enacted under the Civil Rights Act of 1968, aims to prohibit any discrimination in the housing market. This includes buying, selling, renting, or financing houses.
Landlords, real estate companies, and any other providers of housing are not allowed to discriminate against dwellers because of their skin color, race, sex, religion, or country of origin. This ensures the protection of all the parties involved in any form of discrimination.
The act mandates that the approval or denial of a house purchase should be based on a buyer’s creditworthiness and not on his physical attributes or ethnicity.
In 1988, Congress amended the act and added familial status (families with children under 18) and persons with disabilities on the list. Discrimination based on gender was added as well in 1974.
The Housing for Older Persons Act (HOPA)
President Bill Clinton amended The Fair Housing Actand signed the Housing for Older Persons Act on December 28, 1995. As an exemption to the rules above, a real estate company or any entity engaging in the housing market can now impose an age-limit restriction on possible buyers and dwellers.
They have obtained the right to deny purchase or lease to someone who doesn’t fit into the age requirement for a specific community. This act mainly protects the welfare of the age-restricted communities or better known as the 55+ communities.
What Is an Age-Restricted Community?
An age-restricted community, as mentioned, is better known as the 55+ community. Some also call it a senior housing community. It is a community intended to cater to the preferences and interests of residents aged 55 and above.
What Are the Qualifications to Be Met for a Community to Be Listed as an Age-Restricted Community?
- First, not less than 80 percent of the homes in a community should be resided by a minimum of one person aging from 55 and above.
- Second, the community should create and follow policies that demonstrate an intention to operate as a housing body for residents aged 55 and above.
- Lastly, the community must conduct procedures to verify someone’s age via trusted surveys, affidavits, and census every now and then.
The 80/20 Rule
As partially discussed above, this rule means not less than 80 percent of the homes should be resided by a minimum of one person aging from 55 and above.
For a newly-constructed facility or for communities that underwent rehabilitation or renovations and are not yet occupied for at least 90 days, the rule is applicable only after 25 percent of the homes have been seized. Moreover, when computing the 80 percent of the community, unoccupied units are not counted.
For leases, note that the law is concerned with the age of the unit occupants, and not the unit owner’s age. If the owner is 55 years of age or older but leases his or her unit to a resident who has not reached the age of 55 yet, then the unit does not meet the requirements.
How About the 20 Percent?
The 20 percent rule has created many confusions and numerous misunderstandings among communities. To clarify, the government amended the rules and finalized the regulations in implementing the act.
There’s no specific requirement for the remaining 20 percent, provided that, no less than 80 percent of the homes in the community are resided by a minimum of one person aging from 55 years and above. It doesn’t require that the remaining 20 percent must be resided by residents younger than 55.
The 20 percent rule is provided to have some “leeway” when an issue regarding the age-restriction arises.
For example, a couple is occupying a unit at a 55+ community whose ages are 50 and 55. If unfortunately, the 55-year-old resident perishes, that would leave the 50-year-old as the only resident of the unit. Or it might be that the couple decided to divorce, and the 55-year-old resident decided to leave the 50-year-old resident behind.
Technically speaking, when this happens, the rule that one occupant must be 55 or older, has been violated. However, because of the 20 percent “leeway” that each community is entitled to, the remaining underage resident can still stay in the said home.
Provided that the three primary requirements are met, the law doesn’t really mind how a community handles the 20 percent.
If a community fails to comply with the provisions of the mandated acts, it will lose its protected status. The community can no longer impose restrictions on buyers or renters who are under the age of 55 years.
This will also put in jeopardy current senior residents who primarily chose to live in the area because of the age-restricted feature of the community. Furthermore, as expected, this will deter retirees or elderlies, who are eyeing to purchase or lease a home, from potentially choosing the community.
Nevertheless, all the hassles and bustles can be avoided by diligent planning and careful analysis of the community head and its subordinates.
Benefits of Living in a 55+ Community?
Why do retirees prefer to settle in a 55+ community, regardless of the complications that might happen when the 80/20 rule mentioned above is not met?
Some say, when you are buying a home, you are not just buying the home, but also the lifestyle that the community promotes. These 55+ communities specifically aim to cater to the lifestyles of the senior residents.
Amenities and Activities
They offer a variety of amenities and activities that promote healthy living both for the seniors and the young ones. A resident can choose from the most common activities like cooking lessons, food and wine pairings, and service salons.
For the more active residents, 55+ communities offer swimming pools, biking areas, golf courses, and pickleball courts. And also, most senior residents prefer walking trails and community gardens, which are basic amenities of a 55+ community.
Most of the time, these types of communities are located at desirable locations. They are located in relatively convenient locations making the drive to shops, restaurants, or medical facilities shorter and therefore more accessible. They also offer public transportation specifically designed to give a comfortable commute for senior residents.
Since 55+ communities are age-restricted, you will most likely be surrounded by people who not only share the same age as you but also share the same interests. This will make it easier to build new friendships and develop a good sense of community.
Most of the time, you will able to enjoy a peaceful and quiet environment without the noises of kids playing around. Though, a disadvantage of this is, it won’t always be like that since there are still those younger residents.
During the holidays, it is expected that the senior residents will be hosting parties for their families, so you may see children roaming around during these days.
Another disadvantage of these communities is that, since they offer a lot of amenities and activities, the homeowners’ associations dues are expected to be more expensive than the regular ones.
So, the Final Question Will Be – Will a Retiree Go for a 55+ Community or Not?
The answer is that the decision still lies in someone’s preferences.
Sometimes, when you set foot into a particular community, even if it’s not the best, it still may be perfect for you. However, you still have to consider a lot of things.
Nevertheless, you must not rush in looking for the best community for you. Since this will be your forever home, it must be thoughtfully planned, and it must be in the perfect place.