55+ communities for active adults are filling up, with more and more Americans able to retire at younger and younger ages. It’s an exciting time to be house hunting! We’re living our best lives sooner and prioritizing our wellness by opting to be a part of these amazing communities. Many hopeful retirees begin planning well in advance to ensure they are retirement-ready. That means understanding the rules of age-restricted communities and how these shape your quality of living as well as your qualifications for residing in these curated neighborhoods. The 80/20 rule is one prospective residents of age-restricted communities need to know.
What is the 80/20 rule? This rule applies to age restrictions that govern the community. In the simplest terms, the 80/20 rule means that 80% of the occupied residences in a given community must be occupied by those 55 years of age and older. That means the other 20% may be eligible for occupancy by those younger than the target age demographic. Specific circumstances can be further applied to this exception and may inform whether or not a community is a good fit.
We’ll help you plan ahead by learning more about the 80/20 rule in age-restricted communities. Let’s explore the ins and outs of this unique community model.
Where Does the 80/20 Rule Come From?
The 80/20 rule was put into place to ensure housing equity. The rule originates from the Housing for Older Persons Act (HOPA), an amendment to the Fair Housing Act. The intent behind this rule is to provide exemptions in order for communities to legally implement age restrictions in a manner that is non-discriminatory.
In other words, there are certain qualifications a community must meet to be considered an age-restricted community. One of these is the 80/20 rule. Residents’ ages are verified as a requirement of living in the community. These communities must have clear and concise by-laws and policies detailing their intent to maintain a 55+ community status. If a community is not a 55+ community, but denies certain residents based on age, this would be considered housing discrimination.
The 80/20 rule ensures transparency and fairness when it comes to creating thriving age-restricted communities.
Is There Any Flexibility Around the 80/20 Rule?
The 80/20 rule does have some flexibility surrounding its application. It’s up to each community’s HOA or governing body to dictate what exceptions can be made to the rule.
Common exceptions to the 80/20 rule include spouses or partners who are under 55 but live with a qualifying resident. This affords many couples the luxury of an early retirement with more housing options to choose from.
Caregivers are another exception, where a live-in caregiver is permitted to reside with an eligible resident. These exceptions are most often seen in transition communities equipped to grow with evolving care and comfort needs.
Lastly, inherited properties pose an interesting conundrum for many 55+ communities. If a property is inherited by a person under the age of 55, most communities will allow these individuals to reside in the home. If you’re interested in learning more about inheritance in age-restricted communities, check out “Estate Planning: Can My Children Inherit My Home in a 55+ Community?“
It’s important to note that while many communities use the 80/20 rule as a baseline, age-restricted communities do have the option to impose stricter age guidelines as designated by the HOA and governing bodies. When planning for your retirement, be sure to ask about this rule to determine if a community is a good fit for your lifestyle.
The Benefits of the 80/20 Rule
The 80/20 rule does not simply exist to gatekeep who can reside in a given community. This rule exists to build a curated community centered around neighbors who are in a similar life stage. The key advantage of this rule is maintaining the culture and lifestyle in a variety of ways.
This might include tailoring the services and amenities to meet the preferences of the 55+ age demographic as well as maintaining a peer environment comprised of neighbors with similar interests and experiences.
One of the aspects residents love most about age-restricted communities is the sense of belonging. Neighbors all share the commonality of choosing these beautiful locations for their retirement. You won’t spot your neighbors rushing to work at 5 A.M. or shuttling screaming children to the car. The 80/20 rule ensures a peaceful, quiet environment where you and your neighbors can appreciate the tranquility.
Of course, the 20 percent that are allowed to occupy the community share plenty of commonality as well. These residents often prioritize the same values as the rest of the community. An enjoyment of leisure activities, enthusiasm for recreation, and a deep appreciation for peace and tranquility are the top qualities of residents under age 55. Most retirement communities are able to seamlessly blend these two demographics while maintaining a culture catered primarily to the 55+ residents.
The 80/20 rule is a useful and important guideline for how 55+ communities are managed.
80/20 Rule Wrap-Up—What Comes Next?
Planning ahead for retirement is an exciting, though at times daunting, task. Don’t forget to research the rules and guidelines for your top retirement communities to ensure they meet your lifestyle expectations. The 80/20 rule allows age-restricted communities to keep their 55 and over status while still allowing for a small percentage of residents under 55 years of age. This is the perfect balance for most retirees.
Once you find your perfect home, the decision should feel effortless and right. More and more active adults are downsizing their current living situations in order to pursue the lives of their dreams. Retirement is getting earlier across the United States, and active adult communities are becoming more and more refined. From recreation to stunning spa amenities, retirement community options continue to grow.
Ready to Find Your Perfect 55+ Community?
Understanding the 80/20 rule is just the beginning—finding the right active adult community is where the real journey starts. Whether you’re looking for a home in a 55+ community or exploring your options, the experts at 55places.com are here to help. Contact us today to connect with a real estate specialist who can guide you every step of the way!
