Summary: The senior housing industry needs more private pay properties that are within reach of the middle/low-middle income segment. I want to start a conversation on how to fill this need, and hope you will add your thoughts.
Current Situation: The senior housing industry does a good job providing care and housing for the wealthy in high-end, luxury communities of all types i.e., independent living and assisted living, and for the poor in Medicaid-oriented skilled nursing facilities. However, 33% of 75+ households land in the middle of the earned income spectrum, earning between $20,000 and $40,000 per year; this group has few attractive options. They can’t afford the high end and prefer not to live in public-pay homes.
Current development activity has focused on the high end, with costs per unit ranging from $200,000 to $350,000. The construction costs in upper-end assisted living properties mean that rents need to be $4,000 to $6,000 per month (including care charges) to be viable. Independent living rents for new construction range from $2,500 to $4,000 per month. These monthly rates squeeze the middle/lower-middle class.
Next Steps: The industry needs to generate a solution for what promises to be a large wave of seniors stuck in the middle. I want to be part of the solution. This blog will explore current thinking and highlight innovative approaches related to affordable private-pay senior housing. I will post additional content as I explore this topic and want to spark a conversation. Please use the comments section to point out resources, direct me to people doing innovative things, and share your ideas.
United States Census Bureau www.census.gov
National Investment Center for the Seniors Housing and Care Industry www.nic.org