Medical professional holds the hand of patient during a consultation
Article

Trends in the senior living industry

Senior living industry trends  

Caring for our aging and senior populations can present both opportunities and challenges for providers, especially religious congregations. Religious congregations often have options to open their facilities and property to the public, including aging populations in the general community, development partners and senior living operators. Congregations should consider the advantages and drawbacks to serving these populations, whether in current facilities or new facilities developed with a partner. When considering serving seniors in the broader community as well as in their own community, it is important to understand aging services trends that can impact the congregation as a provider facility, including demographics, facility and services, and design and development.  

Demographic trends 

There is a common misconception that our country is at the point of having the highest numbers of people reaching the age in which they most often require senior living options. Today, there are more than 46 million older adults over age 65 living in the U.S.; by 2050, that number is expected to grow to almost 90 million. Between 2020 and 2030 alone, the time frame in which the last of the baby boom cohorts reach age 65, the number of older adults is projected to increase by almost 18 million. According to the U.S. Census, by 2030, 1 in 5 persons in the U.S. will be over 65, with rural areas tending to have a higher percentage of older adults and an increasingly older population.  

Although we typically refer to seniors as persons 65 and older, the average age of residents living in senior care or housing facilities is typically much higher. Most senior housing has set age restrictions at 55+, and while some seniors do decide to move to a robust continuum of care campus that provides “active adult” services, the actual average age of seniors using these housing options is about 86. It is important, therefore, to evaluate aging trends in the general community carefully to assess whether enough seniors over the age of 80 would be prospects for a development at a particular campus and evaluate the current and future need to determine whether developing options on the property is the right solution.  

It is frequently misunderstood that the great graying of our population has occurred or is occurring. Actually, it is not quite here — yet. The actual senior “boom” and, consequently, demand for senior services will not occur until after 2028. For congregations evaluating whether to open their property to the general community to serve seniors, from a demographic perspective, the greatest opportunity to be of service is still a bit into the future. This does not mean that there are not opportunities to serve; it does mean congregations should be diligent about evaluating the gaps in senior services in the specific area before moving forward.  

Significant consideration should be given to the living environments, especially if a congregation is planning to utilize current facilities for senior care options, such as assisted living and senior housing.  

Facility and service trends  

For many years, the senior living provider industry has experienced a shrinking demand for nursing home and skilled nursing facility (SNF) services. This is occurring for many reasons, not the least of which is the changing preferences of consumers and where they receive long-term care. There has been a significant shift in the industry to alternative options, such as assisted living and at-home care. Another significant factor is reimbursement from the Medicaid (MA) program for persons that require assistance. The MA system that pays for long-term care for persons that are income-eligible has been persistently shifting funding from nursing homes to alternative care options, such as assisted living, and in most states, the daily reimbursement falls short of the daily costs of care for these individuals. Many nursing homes struggle to have financial stability while serving individuals who qualify for MA. Congregations with nursing homes that are licensed and certified for MA are experiencing this same trend. Many question whether their nursing home is financially viable for the future, have considered exiting this segment of the industry, or have formed partnerships with local not-for-profit and faith-based nursing homes for the care of their members.  

Alternatives to nursing homes, including assisted living and memory care assisted living, have become prevalent, and the supply of beds has increased markedly over the past decade to meet the demand of seniors. For many years, there was a significant gap in supply of memory care assisted living, and many seniors were placed in nursing homes prematurely. For the past decade, development of these options has been on the rise. There has been such an increase in development that many areas are overbuilt or are close to becoming overbuilt with too many units/beds to meet the demand.  

Senior housing and independent living for seniors are options for persons who do not need assisted living services. These options are in high demand by seniors who wish to sell their homes to take advantage of the financial gain from the sale, and from seniors who no longer wish to have responsibility for the upkeep of a house. Seniors are also seeking out these types of options that are located on campuses with services and amenities that they can access, often referred to as “active adult” living. The need for senior housing and independent living will continue to increase over the next decade, with this segment of the industry possibly experiencing the largest increase in demand.  

Design and development  

Home-like environments are now the norm for senior living facilities. Through the years, the living environments for long-term care has morphed from institutional buildings with shared rooms, sometimes four people to a room, and shared restrooms, to buildings that could almost be mistaken for apartment complexes and, in some cases, luxury apartments. Assisted living has gone through similar transformations and today features such amenities as swimming pools, billiards hall, pubs, fine dining and entertainment theaters in addition to large, private apartments for the residents. Outdoor experiences include outdoor dining, patios with fireplaces, and hiking and walking trails on the property.  

Hybrid homes are also an emerging design for independent seniors who want to live in a community with lower density than a typical senior apartment complex. The hybrid home combines design elements of apartments and cottage homes/villas consisting of all corner units for more natural light, better views and larger square footage per apartment. Typically, these options include common areas for socialization with other tenants as well as family and friends.  

Senior cottages, senior apartments and other independent living options will be on the rise as the population 75 and over increases in the next decade. This trend will provide opportunities for congregations to work with local developers and operators that specialize in this segment of the industry.  

Looking forward 

The trends suggest there will be a growing need for senior housing and care options for seniors who need some level of assistance. However, the future is not all bright. Growing workforce shortages and the resulting increasing cost of labor are leading concerns for the industry, which relies on people to provide services and care at the bedside. The worker shortage will be one of the biggest hindrances in this industry segment.  

The Covid-19 pandemic has altered our society tremendously since 2020 and will continue to create ripples that will have an ongoing effect on the senior living industry. From worker shortages and impacts on design and safety measures in facilities to increased costs of operations and future lack of demand, the industry will have to continue to adapt to the ever-evolving “new” (or next) normal.  

Michael Edwin
Closeup of circuitry on computer
Next up

Cybersecurity and data privacy: recognizing the risks facing NFP organizations