By Ross Anderson
OK boomers. Take a look at what we’ve done to our adopted home.
A generation ago, Port Townsend was a nice, waterfront town with affordable old homes, good schools and living-wage jobs at the mill, boatyard, hospital, and government.
And now? Forget it. Aging baby boomers have transformed the town into a retirement enclave with a median age pushing 60. That means half of our population would qualify for the Denny’s senior menu. If we had a Denny’s. Which we don’t. And that’s OK.
There are some upsides to the invasion. Because their income comes mostly from pensions and investments, retirees are far less subject to economic downturns, including the pandemic. And boomers donate and volunteer in droves at the food bank and schools, and at signature festivals. All that helps.
But, at the same time, well-intentioned seniors are collectively undermining the town’s civic and economic life, impacting schools, health care, jobs, taxes and especially housing. And we need to do something about it. We’ll get back to that.
Let’s consider some of the consequences of those demographics.
Take health care. An aging population means that Jefferson Health Care and other local providers are being reimbursed largely by Medicare and, to a lesser extent, Medicaid. Those reimbursements are generally more stingy than private insurance plans – as low as 20 cents on the dollar, according to Amy Yaley, communications director at Jefferson Healthcare.
To balance their books, healthcare providers say they need a minimum of 20 percent of their payments to come from private insurers. Jefferson gets more than 78 percent of its reimbursements from Medicare and Medicaid, and the percentage is likely to increase with the pandemic. “Primary care doesn’t pay the bills,” Yaley says. “So we have to be more creative.”
The strategy has been to develop specialty services – rehabilitation and cardiology and elective surgery such as knee and hip replacements. Those services tend to pay for themselves and help offset the losses from primary care, Yaley says. But those services were closed down to deal with the pandemic.
What healthcare providers need is younger clients with fewer health issues and private insurance. And that is not happening.
And schools? The good news is that local seniors have supported school taxes, including the $40 million bond issue to build a much-needed new elementary school. And the schools benefit from seniors who volunteer as mentors and classroom aides, says outgoing superintendent John Polm.
But, as aging boomers displace families, schools are left to deal with a steady decline in enrollment. Every student lost translates to a loss of state tax dollars for local schools.
At the same time, the spiraling real estate market makes it tougher to recruit and keep teachers and staff, Polm says. Recently, a staff member who had been renting had to move out of town because he couldn’t afford anything in Port Townsend. “We have teachers commuting from Poulsbo and Port Angeles because they can’t afford to live here,” Polm says.
There lies the rub. As retirees flock to Port Townsend, they affect both the supply and price of homes. The median price of a home here increased by 50 percent in just three years, from 2015 and 2018.
Newly-arrived boomers can afford it. They’ve sold their homes in Seattle or California, and can pay those six and seven-figure prices for homes that previously sold for five figures.
And they can pay cash, which makes a difference when there are multiple bids for a home, says Michelle Sandoval, a Windermere realtor and Port Townsend mayor. “Even if they can meet the selling price, younger people who need loans get beat out by retirees who can offer cash.”
Some of those new homeowners don’t even live here, she says. Wealthy boomers split their lives between Seattle and Port Townsend, so perfectly good homes sit empty for much of the year while younger people are forced to buy out of town.
This explains the heavy traffic on Sims Way during rush hours – hundreds of working-age people commuting from Quilcene or Sequim to their jobs in the schools, hospital and mill.
Rising home prices also increase property taxes, she says. “People from out-of-state like the fact that we have no income tax. But they get here and complain about school levies. It doesn’t make sense.”
What can be done about this? It’s tricky. Government has been trying to deal with housing issues for decades – with huge housing projects that turned into slums, or subsidies to private builders that inadvertently enriched wealthy slumlords. It seems to be an issue that defies both market economics and liberal reforms.
Sandoval and others have been looking at programs focused on home equity. Boomer retirees tend to have an average of nearly 50 percent equity in their homes – equity that has increased not because of hard work, but because of the whims of rising home prices. Is there a sensible way to capture some of that equity and transfer it to younger buyers who need to get a start in the market?
People are looking for something that works. Housing Solutions Network, at housingsolutionsnetwork.org, is a local nonprofit that is looking as far as Vermont, California and Hawaii for ideas.
We’re looking too. If you have an idea, let us know.