By Richard Chapman (Originally published in the October/November 2016 issue of the Kern Business Journal)
If 2015 was considered the Year of the Millennial, 2016 just might be the Year of the Boomer. The youngest baby boomers’ 50th birthdays are now in the rearview mirror, but their eyes are firmly focused on what lies ahead—and their choices can have a big impact on Kern County’s economy.
Interestingly enough, baby boomers and their younger counterparts have a lot in common, especially when it comes to choosing where to live. In fact, many of the elements that have made Kern County the No. 2 ranked metro in the U.S. for millennial population and job growth have also produced a similar No. 2 ranking as a top retiree destination—not just for a vacation, but as a place to invest in their future.
Kern County performs quite well in a 2016 GOBankingRates.com survey that looks at cost-of-living factors such as housing, food, utilities, transportation and health insurance. In fact, Bakersfield is the only West Coast city where residents would actually have surplus income ($13,416) left over at the end of the year. In San Francisco, for example, most people were more than $41,000 “underwater.”
Furthermore, despite being located in 5th “costliest” state in the country, the 2Q2016 Cost of Living Index (COLI) report–released by the Center for Regional Competitiveness–showed that Bakersfield’s relative living costs were only 6% above the national average (compared to Los Angeles, which is 40% over the national average…and San Francisco, which is 75% over the national average!)
Boomers’ Increasing Relevance
The Pew Research Center estimates there are currently 74.9 million people (born between 1946-1964) in the U.S. (vs. 75.4 million millennials born between 1981-1997) and 61 million Gen X’ers (1965-1980). But there’s one significant difference: the boomer generation has more discretionary income (wealth) than any other age group and they control 70% of the total net worth of American households – $7 trillion of wealth.
Freddie Mac forecasts that approximately 18 million 55+ consumers will be actively house-hunting over the next several years and that affordability, amenities, and accessibility are among the most important “site selection” factors.
In terms, of home purchases, Kern County/Bakersfield was named No. 1 for housing affordability in California by the 12th Annual Demographia International Housing Affordability Survey. (In a recent COLI report, Kern’s housing costs were listed as 91% of the U.S. average.) According to Trulia, boomers are just as likely to buy a bigger home, as they are to downsize to an apartment and they are also the second-largest group of homebuyers (31 percent) after millennials (35 percent).
Much like millennials, boomers want a myriad of housing options located in walkable communities. They want homes located near restaurants, shopping, and public transit. According to Andrew Carle of George Mason University, “This generation has revolutionized virtually every product and service in the American marketplace and they are the reason that there are a hundred flavors of baby food. As they reach retirement age and seek out housing options, do you think they’re suddenly going to settle for one flavor [of anything]?” Local 55+ community “best practices” include Brighton Parks, The Greens at Seven Oaks, Four Seasons, and Solera.
In terms of accessibility to amenities and services (such as healthcare), the Bakersfield MSA has the shortest annual traffic delays (19 hours) in the U.S. among large and mid-sized cities.
If that wasn’t enough, Kern County has an additional “feather in its cap”–the region has the 2nd most moderate weather in the U.S.
No Such Thing as Retirement
It is important to note that many “retirees” are not actually retired at all, but rather are pursuing part-time endeavors. A recent survey by the Kauffman Foundation found that baby boomers were the fastest-growing segment of entrepreneurs. Many boomers will use this watershed period to pursue second careers or volunteer opportunities. (This decision seems rather prudent given that the “first person to see their 150th birthday” has already been born.)
Kern County offers an ideal environment for baby boomers to flourish in their next phase of life, work, and play.