When the Granite State beat Florida for average median age in Census data released in May, our fate was seemingly sealed: New Hampshire is a retirement state. Or is it? While the statistics bear out that NH has an aging population-the median age was 41.1 in 2010, up from 37.9 in 2000 according to Census data-demographers debate whether that is due to increased retirees or fewer younger people. Whatever the reason, NH has developed a national reputation as being a prime place for retirees, and zoning choices made by individual towns are tipping the scale in favor of older residents.
The Granite State made Forbes Magazine's 2010 list of best places to retire, a CNN Money report named Hanover the second-best community in the nation for retirees, and Money-rates.com ranked NH first in the nation in its top 10 list of retirement states. These surveys site low taxes, access to recreational and cultural activities, and potential property tax abatement for lower-income elderly residents as attractions for retirees.
Retirees are coming to NH via different avenues. The state's housing stock has a high proportion of second homes, and many of those later become retirement homes, says demographer Ken Johnson of the University of NH's Carsey Institute. Migration and the natural aging of the resident population are also factors. And many towns are approving 55+ communities while discouraging workforce housing and other building that would attract families with children.
Dennis Delay, economist for the NH Center for Public Policy Studies, says that most of the increase in the senior population is not because NH is an attractive place to retire, but because our resident population is aging. We may be noted in these studies and that is great, but we are not a retirement destination by any means, Delay says. Our studies show it is clear our population is getting older and baby boomers that moved here in the '70s are now our older residents. Also, during the last several years, we have had fewer and fewer younger people migrating into New Hampshire. But Johnson says migration of older people plays a big role. We actually saw an inflow of the 60-plus population by about 15 percent between 1990 and the year 2000, Johnson says. So we as a state didn't just age, there was some migration.
Kids Keep Out
While retirees are moving here, younger workers are not moving in at a high enough rate to meet workforce needs. Municipal zoning decisions aren't helping. Census data from 2010 ranks NH 24th nationally for the percentage of residents over the age of 65 (13.5 percent) and 44th for the percentage of those under 18 (21.8 percent).
According to Census data, it has historically been migration of younger people into the state that has kept NH young. But migration to the Granite State in general has slowed drastically, from 20.5 percent population growth in 1990 to only 6.9 percent in 2010. What does this mean? The state has 18,000 fewer people age 18 and younger than it did in the year 2000.
Many towns blame children for rising tax rates, says demographer Peter Francese of Exeter, and use targeted planning to subsidize the needs of the elderly because of the belief that they will not place any further financial burden on school systems.
We have wrongly blamed children and the costs to educate them as the reason for our tax bills and we have essentially frozen out the younger generation from being able to live here. My belief is that the only truly affordable housing in the state is age restricted, known as 55-plus communities, Francese says. We favor the elderly and polarize the young, and many communities actually fight to keep out workforce housing, which would provide affordable homes for younger workers.
Francese says children are our future and the lack of balance between young and old will affect the state's economy moving forward, especially when it comes to workforce needs. If companies can't find enough workers, Francese says, they will move out.
I believe what we have done with subsidizing the elderly while freezing out the young workforce is economic suicide down the road, he says.
But there is something to the child debate when it comes to taxes, says Russ Thibeault of Applied Economic Research in Laconia. Statistically, two-thirds of our property taxes go toward the schools. So those [older] homeowners pay property taxes, but don't increase the school costs, he says.
Francese questions the extent of that support, saying older voters tend to vote down school bonds and tax increases needed to improve schools.
Empty Nesters
Like parents missing kids they sent off to college, NH is becoming a state of empty nesters with our young population on the decline and 57 percent of all homeowners either empty nesters or people without children. The state ranks third in the nation for its number of vacation homes, Johnson says. This equates to slightly more than 10 percent of all homes being secondary dwellings.
Most retirees, Francese says, come for the tax breaks and the numerous affordable 55-plus communities. We offer no sales tax, no income tax and only a slight tax on passive income (interest and dividends), he says. Plus, if you are below a certain income, which many in the age-restricted communities are, there are tax abatements that seniors can qualify for. So essentially, if a senior owns their home outright, they can be living for free other than food and utilities. You can't beat that deal.
According to Delay, NH's tax climate (no income tax, no sales tax and the possibility of property tax abatements) is why the state is ranked high by national publications, despite the fact that it has the third-highest property taxes in the country.
Empty nesters may not need the schools, but they do require many others services, and that will shape the state's economy moving forward. According to a report released in October by the NH Center for Public Policy Studies, experts say NH's Silver Tsunami will play an increasingly central role in state budget policy and will affect individual communities. By the year 2030, the study reveals that about 500,000 NH residents will be 65 and older.
According to the report, this trend will influence nearly every critical policy debate, but topping the list will be health care, which will see more demands placed on it as the state's demographics shift. The aging population will have a profound effect on many areas of the state budget, including the purchase of health insurance for state employees and retirees, as well as for the state's prison population, which in less than 20 years will see the number of elderly inmates more than double.
In 2010, NH's expenditures for Medicaid for those over the age of 85 were roughly $100 million, but a threefold increase in these expenditures may occur by 2030, meaning aging alone could result in Medicaid expenditures exceeding $350 million. Medicare recipients ages 65 to 84 are projected to triple by the 2030, spiking expenditures from $3 billion to more than $7 billion. That would increase pressure on providers to lower costs or shift some expenses to privately insured patients.
Access to doctors will also be an issue. The report notes that two-thirds of NH physicians are older than 45, significantly older than the national average. The state's long-range economic development and workforce plans will have to address recruiting physicians to meet the health care demands of the growing elderly population.
Delay says towns with more elderly residents have more need for ambulance services and will increasingly have fewer people to answer the calls. No workforce means companies pack up and leave and older voters tend to vote down anything that will raise taxes, like school bonds. This affects everything at a local level as well as the state's economic health, Delay says. From a housing perspective, Thibeault of Applied Economic Research in Laconia says towns with several 55+ developments-mostly those in the southern part of the state-benefit economically as those developments tend to be nice units that have above-average tax assessments.
Town Dynamics
Communities with sizeable retiree populations include Hanover, Sunapee, Moultonborough, Wolfeboro, North Hampton and Exeter, according to Delay. Many of these communities are near cultural and recreational attractions, be it lakes, colleges, mountains or the arts. Hanover Town Manager Julie Griffin says that town's proximity to Dartmouth-Hitchcock Medical Center and to cultural activities at the Hood Museum and Dartmouth College creates an attractive place for seniors to reside.
We have a real mix of rural beauty as well as being close to everything today's senior is looking for, she says. Griffin says the town has several 55-plus communities in a range of price scales and the effect on the town budget has been miniscule. Despite the availability for tax abatements for seniors, she says she can count the number of them on one hand. Griffin also says that the typical worry about a large increase in emergency service calls has not proven true for Hanover. The only increase we saw that nobody could have predicted was for police detectives, Griffin says. With the increase in seniors in the town came a growth in crime from people scamming the elderly out of their money or stealing from them, she says.
InExeter, which has four 55-plus communities and two more underway, assistant fire chief Ken Berkenbush says that an increase in ambulance call volume of about 3 percent has occurred every time a new retirement community, which typically has 200 residents, opens. This has meant some shifting of budgetary line items to meet the demands, like taking funds used for over-time pay to create full-time positions for the ambulance service. But, Berkenbush says that since everyone is charged for ambulance service-generating $400,000 in revenue in 2010 that was put back into the town budget-the effect of an increasing senior population on demand for service is small. He also notes that other than the microcosm of the fire department for ambulance service, it is actually advantageous to the community to have the influx of retirees.
The seniors themselves are one of the biggest supporters of the teen center in town and they tend to be more charitable, he says. And one of our planned communities not only gave the town $150,000 toward the future new fire station to be built, but they donated two acres of land to build it on. So yes, the ambulance run volume goes up, but there are a lot of advantages. One thing is clear-the population of retirees in NH is on the verge of exploding. The state, according to the NH Center for Public Policy Studies, has only just begun to analyze the effect of this graying. Mitigating the graying of NH will require changes in policymaking and strategic economic plans at the state and local levels.
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