The pandemic has crashed the nursing home market, lowering occupancy and stalling construction. Now that the market is starting to recover unevenly, developers are adapting to the coming wave of aging baby boomers with a new crop of living developments.
Specialized housing for older Americans has been around for decades. But changing demographics are forcing the industry to diversify rates and services faster, creating ever more luxurious homes for higher-income Americans, as well as a growing number of affordable housing models.
For example, a high-rise under construction near Washington Trillium has restaurants, a spa and wellness center, and other boutique hotel-style amenities and finishes. And in the Boston area, Opus Newton, a more modest project, will rely on local volunteers to help cut costs.
Developers are also experimenting with non-traditional models. In Loveland, Colorado, Kallimos Communities is planning a multi-generational development of 100 subsidized rental homes clustered around shared green spaces and offering dining, art and wellness opportunities.
The aging of an increasing number of baby boomers (about 65 million in total) is causing a “big resurgence,” said Beth Mays, chief economist at the National Investment Center for Housing and Elder Care, a provider of data services to the aged care industry. .
Other changes are related to housing redevelopment, from security concerns caused by the pandemic and labor shortages to trends favoring more personalized and community-focused solutions. Housing for senior Americans offers three main options: independent living for an active lifestyle; assisted living, including some medical care; and memory care. (Nursing homes provide care for the elderly and do not usually fall under the category of nursing homes.)
“Everyone is trying to figure out the secret sauce — what the senior home consumer wants,” she said. Mace said. “The bottom line: you’ll see a lot of options.”
Developers are betting that if they create enough variety, they can attract the next generation of aging Americans.
“We need to design communities that cater to the needs of boomers, and that’s the difference between senior housing today and housing built 10 or 20 years ago,” said Bobby Seiller, Vice Chairman and Co-CEO of Silverstone Senior Living. Trillium.
After focusing on suburban-style senior communities, Silverstone is expanding into the urban environment, Mr. Silverstone said. Zeiller said. According to him, the industry “is developing very quickly.”
The average occupancy of the 31 largest national nursing home markets was 81 percent in the first quarter of 2022, compared to a low of 78 percent in the first quarter of 2021, but below the pre-pandemic level of 87 percent in 2020. Mace said.
According to the National Investment Center, the numbers are starting to rise in some markets. In Miami, for example, construction’s share of inventory was 11 percent in the first quarter of 2022, the second highest ever. But on the other end of the spectrum is Sacramento, where construction has fallen to about 1% from 17% in 2019.
Even before the pandemic, only about 11 percent of Americans over 75 lived in nursing homes. One reason for the low score is a strong preference for in-place aging.
Another factor is the high cost of housing, especially for the eight million middle-income Americans who are not eligible for subsidies but cannot afford to pay out of pocket. According to the data, in 2021, the national average monthly rate for assisted living was $4,300. interview Genworth, an insurance holding. And the average monthly cost of memory care is $7,277, according to the National Investment Center.
Luxury developers are betting on larger apartments, sophisticated design and amenities, and an increased focus on social engagement and active lifestyles.
Coterie Cathedral Hill, a 208-unit complex that opened in San Francisco in April, features five restaurants, an outdoor pool, and landscaped courtyards and terraces. Wellness staff are trained at Mayo Clinic and an onsite care coordinator helps residents achieve a wide range of mental, emotional and physical health goals, including helping with social and charitable causes.
Coterie, a joint venture between development company Related Companies and Atria Senior Living, one of the nation’s largest providers of senior housing, is aimed at affluent city dwellers who are looking for “a match for the lifestyle they were used to when they lived in a traditional country home.” growth,” said Joanna Mansfield, general manager of Coterie Hudson Yards, the second complex to open this fall in New York.
At Coterie Cathedral Hill, monthly rentals range from $7,900 for a studio to $16,660 and up for two-bedroom residences.
A new wave of lean business models is targeting middle-income Americans. Opus Newton, for example, will require residents to volunteer 10 hours a week, which will give them a stronger sense of purpose and community, as well as “significantly reduce staff overhead,” said Amy Schektman, president and CEO of 2Life Communities, a non-profit organization. who develops the project.
Other cost-savings include outsourcing care and providing discounted membership fees at a nearby Jewish community center, eliminating the need for in-house recreation facilities.
RS. Schectman expressed confidence in the future of older people living together despite ongoing concerns about the pandemic.
“The coronavirus has revealed a pandemic of loneliness and isolation,” she said. “Aging in place harms society by presenting the choice to live with others as a failure. We are community creatures.”
Initial costs for 174 Opus Newton apartments start at $391,000, and many residents will pay that amount by selling their homes.
Repurposing existing buildings is key to solving the mid-market problem, said Phi Stubblefield, chief executive of The Springs Living, a Portland, Oregon-based developer with 18 properties catering to seniors across income levels.
The Springs Living is building two luxury skyscrapers, one of which is on the Columbia River in Vancouver, Washington. The properties will include firewalls to secure floors in the event of an outbreak, and they will be certified to meet new health and wellness standards for design and operation.
Starting rental rates in new buildings range from $3,700 to $10,000 per month.
There are two types of older residents at home, Mr. Stubblefield said: those who want to live there and those who have to. According to him, those who want to live old make up “a large part of our society.” “The social and health component is underdeveloped for this population.”
Labor shortages exacerbate the economic problems facing housing developers for the elderly. According to recent analysis or data from the Bureau of Labor Statistics.
“Workforce stability is the most important factor in the future of housing and services for the elderly,” said Mr. Stubblefield said, adding that operators have a “duty” to create career opportunities for entry-level employees that support the industry.
Bill Thomas, co-founder of Kallimos Communities, offers yet another solution to the various issues surrounding the future of aging and retirement in the United States. “The best thing that can help you stay independent is damn good neighbors,” he said.
Created in partnership with the Loveland Housing Authority, the first Callimos Community is based on the idea that older Americans can be supported in senior-friendly homes in community-focused, mixed-age neighborhoods.
“Young people and older people have lived together and supported each other for many millennia,” Thomas said. “The idea that we have wandered into a dead end of history where young people see no value in being around old people is just not true.”