Chamber, home builders seek retirees to fuel economy

Jerry Schalow Rio Rancho Regional Chamber of Commerce CEO.
File photo

Two groups are looking to boost the local economy by attracting retirees.

Rio Rancho Regional Chamber of Commerce President and CEO Jerry Schalow said the chamber and the Home Builders Association of Central New Mexico are partnering to make the City of Vision a certified retirement community. They’re working on the basis of a New Mexico State University study.

“We find bringing retirees to the community is economic development,” Schalow said.

Benefits

Attracting big companies costs tens of thousands of dollars, or more, in incentives, he said, but drawing in retirees requires no paid incentives.

For the certification, retirees are defined as people age 50 or older because some individuals retire young with a pension and start a second career.

The application has been completed, and the American Association of Retirement Communities will evaluate it. Schalow expects to have the certification by early next year.

The NMSU study, by University of New Mexico Professor Emeritus Robert Grassberger and NMSU Professor Jay Lillywhite, says retirees boost demand for goods and services, and provide more government revenue by paying taxes.

Using a statewide average tax rate and the Consumer Expenditure Survey, the study estimates that a two-retiree household making $70,000 a year would generate almost $7,500 in state and local taxes in the first year in New Mexico. According to the study, local governments get 32.3 percent of all tax revenue collected.

Schalow said the average employee here makes $50,000, with 50 percent to 60 percent of that available to spend in the community after deductions. Retirees don’t pay into Social Security or retirement funds, which means even if they make less, they can put more back into local businesses, he said.

They usually make purchases within a five-mile radius of their homes, Schalow added.

As a community gets more retirees, he said, it gets more amenities, benefiting all age groups. Retirees also go out to eat, shop and get medical care during regular business hours, when much of Rio Rancho’s population is working in other cities.

“So that creates more GRT and economic dollars,” Schalow said.

More retirees attract a higher concentration of medical services, which would make Rio Rancho a major destination for medical treatment, he said.

“Wherever there is a strong medical presence or medical community, this helps the city with medical economic development and brings bio-medical to the Sandoval County area,” Schalow said.

The study also says bringing in well-educated retirees has the potential to add business expertise and start-up companies to the community.

“Nationwide, the fastest-growing entrepreneurship group is between (ages) 50 and 62,” Schalow said.

They also do volunteer work, the study said.

According to the study, little research supports concern that retirees wouldn’t support school bonds.

“Indeed, it appears that affluent retirees, who also tend to be well-educated, are likely to advocate for schools,” the authors wrote.

The chamber began working to attract retirees last year.

“Since the chamber started focusing on this, we’ve seen an influx of retirees,” Schalow said.

Concerns

Grassberger and Lillywhite wrote about concerns decision-makers should consider in deciding whether reaching out to retirees would be a good strategy for any given community.

Certified retirement community programs seem logical, they wrote, but no research has been done on whether they’re effective at attracting retirees.

“An inflow of retirees may also drive up property and housing costs and make it more difficult for young families to buy homes or even stay in the area,” the study said.

It also surmises that an influx of retiree households might stress a community’s capacity to provide public services.

“Larger communities like Las Cruces and Rio Rancho might more readily absorb the increased demand for services of an additional 50 households,” the authors wrote.

Schalow doesn’t believe the target audience of more affluent, healthy seniors between 50 and 62 years old will be a drain on public services. He said retiree homes and starter homes are separate markets and sales of one won’t much influence the sales of the other.

“The economic benefit is much greater than the possible concerns,” Schalow said.