Northborough voters passed a bylaw three years ago designed to spur age-restricted housing, and development has boomed as a result. The Pheasant Hill condominium development (shown in rendering above) is partially constructed and opening its first furnished model this week; two other projects have received Planning Board approval and are expected to seek building permits next month.

A new study released by the Citizens’ Housing and Planning Association has many industry professionals, town planners and residents considering the implications of a proliferation in age-restricted housing in the commonwealth.

The Bay State has experienced a recent surge in 55-plus communities. CHAPA’s study, entitled “Age-Restricted Active Adult Housing in Massachusetts,” found that more than 24,000 units of age-restricted housing have been built, are under construction or are in the pipeline, while very few existed before the new millennium began.

The results of the study established that age-restricted housing production currently is very active and may provide a desired living alternative for the state’s more mature residents. However, it also showed that such development could negatively affect the area’s already-constricted inventory of family housing and identified some factors that make the future of the niche active adult market unclear.

The report found that favorable demographics are fueling the market; some 1.87 million Massachusetts baby boomers (those born between 1946 and 1964) will turn 55 between now and 2020, which establishes a definite demand.

“It is definitely a supply-and-demand issue, but it’s not black and white,” said Aaron Gornstein, executive director of CHAPA. “There’s no doubt a growing demand that could support new construction of this kind of product, but the question is how long is this demand going to be there if there’s overbuilding occurring in certain markets?”

Of the 24,000 units of age-restricted, active adult housing in the state, 10,000 are up or in construction and 14,000 are planned, proposed or in the permitting process. However, the supply can be considered even greater when considering the more than 4,000 independent-living and 11,000 assisted-living residences; 2,000 units of age-restricted manufactured housing; and at least 7,000 units of 55-plus housing in the neighboring states of New Hampshire, Maine, Rhode Island and Connecticut.

The demand portion of the market equation is more speculative.

“About 15,000 people over the age of 55 purchase homes a year Â… People between the ages of 55 and 64 make up 16 percent of all [Massachusetts] homeowners currently, but move less often, representing 8 percent of all recent movers,” said Bonnie Heudorfer, the author of the report. “It’s conservatively estimated that between 8 and 14 percent of the market buy in age-restricted communities. So, even if the number of 55-and-overs who were purchasing homes doubled by 2010 so that one in four people between 55 and 64 were buying in age-restricted communities, which is highly unlikely, demand would be less than 3,500 units. We have 24,000.”

Even considering that demand potentially may not be as high as anticipated, the Bay State’s 24,000 units seems to some an inadequate amount when compared to 1.87 million possible buyers. The sheer numbers may be what many builders, developers and municipalities are banking on, though perhaps erroneously.

“People say of course that [age-restricted housing] is where the action is, but just because there are 1.87 million baby boomers doesn’t translate to 1.87 million buyers,” Heudorfer said.

Because of its very nature, over-saturation in the 55-plus market could present numerous difficulties.

“What normally happens when development get saturated is that lenders lend less, developers stop building and prices moderate until the excess gets absorbed. But in this case there are far fewer people allowed to move into these units so it’s not quite as easy” to correct an unbalanced market, said Joubert.

According to the report there are five non-numerical trends that are fueling demand: the general growth of the seniors market; the increased affluence of the youngest seniors; the substantial equity built up by long-term homeowners; the changing needs, tastes and lifestyles of an aging population; and the limited range of housing options available to this segment of buyers in many Massachusetts communities.

All of these factors combine to form a perceived stability and a promise of financial gain – 55-plus housing typically adds property tax revenue while putting little strain on community services – for municipalities looking to increase housing stock.

Northborough is one community that has seen a recent flurry of active adult housing.

“Three years ago in a Town Meeting a bylaw was brought forth to provide for age-restricted housing. Supporters saw it as a cash cow and there are enough of them that a number of developments have been approved,” said Kathy Joubert, Northborough town planner.

To date Northborough has three developments at various stages of completion. One, Pheasant Hill, is partially constructed and opening its first furnished model this week, and two others have been approved by the town Planning Board and are expected to begin applying for building permits next month, according to Joubert.

Northborough is only one of about 30 communities that have adopted zoning bylaws to facilitate age-restricted housing in the past five years. Though that may prove lucrative to towns because more units can be built on smaller spaces, it may also prove to further limit production of family housing.

“There are significant zoning incentives in place to encourage age-restricted housing that allow variances for underlying zoning, but the same tools are not allowed for family housing. It’s not a level playing field,” Gornstein said.

Making Adjustments

Age-restricted communities are often seen by town officials and voters as financially beneficial because they do not burden area school systems, which generally represent the highest budget item for municipalities.

“One of the attractions that people perceive is that seniors are not going to put an additional burden on schools by adding more children, like family housing would, so it appears to be revenue-generating,” Joubert said.

However, the CHAPA study found that in many communities this is not at all the case.

“The premise that if you build new housing you’ll get a huge burden on a community’s education system is a fallacy. We think the whole issue of amount of school costs increasing as a result of family housing has been overstated and exaggerated. And in some communities we’re seeing declining school enrollment after a decade of growth,” said Gornstein.

Even in communities where school enrollment is increasing, the report found that the reasoning behind it may not be because of the construction of new family-housing units.

According to the study, the town of Dover experienced less than 11 percent growth in year-round housing stock between 1990 and 2000, but saw a 60 percent increase in school-age population. In Weston, there was a 9 percent increase in year-round housing between 1990 and 2000 but a 58.5 percent increase in school-age population. Hopkinton’s school-age population increased by 73 percent between 1990 and 2000, while its year-round housing stock rose by only 38 percent. Between 2000 and 2004 Hopkinton’s new housing stock rose by 8.6 percent, while it experienced a 25.8 percent increase in student population.

The report explains that in most communities increasing school enrollments are the result of generational turnover within the existing housing stock. About 15,000 single-family homes are built each year in Massachusetts, but more than four times that number of existing homes change hands yearly, usually older households selling to younger ones, according to the study.

Not only does new family-home construction not necessarily negatively impact communities, but there is also the possibility that seniors could place some strain on towns as well, according to the report.

“Some people may believe that having age-restricted housing will be beneficial to school costs, but we also know that seniors will tend to bring in more police, ambulances and emergency calls, taxing other departments,” said Joubert.

In Massachusetts, a state that is losing population especially in younger demographics, finding equilibrium between age-restricted housing and family housing is a must, according to Heudorfer.

“Age-restricted housing does provide an opportunity for those who grew up here to stay here, which is a good thing. But if we continue to lose our working people, the fact that we’ve provided better for our seniors may seem unbalanced. Driving away younger people is not in the state’s best interest,” Heudorfer said.

In the wake of the CHAPA report, some communities are pausing to consider their options.

“The town Â… is asking questions. How many [age-restricted developments] are enough? Do we want to put a cap on how many per year? Are they as beneficial as we once thought they were?” said Joubert. “The Planning Board is really grappling with this. We’re taking a long, hard look on whether we need to make adjustments.”

Ashley Wilkins may be reached at awilkins@thewarrengroup.com.