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The old folk won't move in automatically, so you'll have to do some manual manipulation. Force them out of their current houses to make them homeless and they should move into the boarding house.
The homeless and the citizens in boarding houses, have priority when a house is available to move into. So that doesn't usually work out so great eh.
I'm playing the game to test my management skills and to deal with obstructions. So don't remove my obstructions.
You can view it as "don't stuff people away in homes where they go senile and don't get to share their wisdom with the youth".
And, thinking about it, if they were in the retirement home, taking resources but not working, that would actually be a substantial cost.
If they are schooled, they are actually like free labor. But yeah, it would be nice to decide where they live to work...
They can still work when they are in the retirement home, it just opens up space for couples who can start having kids.
I'm not sure if that's a thing in the game, but it just seemed like that happened when I had a few older citizens being homeless for a while , let's say a few seasons, before getting a home built up. The idea was to build up a home faster, but due to whatever reason, the home didn't get done quickly, and that's why, by accident, I seemed to notice that something like that happens.
Of course, it could have just been their natural aging and natural death that occurred, and in a normal situation where they died in their homes, i wouldn't have noticed, but because they were being counted as one of the few homeless people, and then that homeless number kept decreasing until it hit 0, then that was one reason I noticed it happening like that.