Ageing has been a current topic for many years because of the demographic change that is happening through Western countries. The drastic change of the age structure has caused the need to develop housing and neighborhood services better suitable for elderly. Lack of neighborhood services is one of the most significant deficiencies in living environment of senior citizens. Therefore information on needs, expectations and plans of senior citizens is needed to make residential environment functional for elderly. The main purpose of this study is to emphasize the key issues of constructing competent service environment for elderly and making it a viable business concept. The other purpose is to clarify how services should be placed relative to the apartments. The study is focused on senior housing in Finland. The study reviews different kind of service environment elderly have in their residential area. The focus is on exploring service use and experiences of residents in different types of surroundings. In this paper different viewpoints are examined to design suitable residential areas for the elderly. The study was conducted as a case study and it used empirical qualitative data from the questionnaire study likewise interviews with 15 senior citizens who are residents of examined surroundings in Finland. The results have been analyzed relating to differences between expectations and needs of residents as also prevailing practice. The results indicate that service environment has a very important role in making residential area suitable for elderly. In conclusion most of the basic neighborhood services should be in a walking distance from senior citizensí apartment. Lack of some basic services does not cause dissatisfaction towards supply of service among elderly.