Senior Housing Falling Short Of Expected Demand As Baby Boomers Age
By ERIN FLYNN JAY
More older adults are living in senior housing and the supply of units for elderly Americans is not keeping up with expected demand, according to leaders at a national company specializing in these services.
Seniorly, which has an online directory of senior living communities and partners with local advisors, recently released a study on the 782 Most and Least Expensive Cities for Assisted Living in 2024 after analyzing data across its network.
The study cited analytics from the National Investment Center for Seniors Housing and Care which found that the total number of occupied senior housing units in the primary markets reached more than 603,000 units in the first quarter of 2024.
NIC also found that fewer than 30,000 new senior housing units were under construction in primary markets in Q1 2024. They estimate the need for 156,000 additional senior housing units by 2025, 549,000 additional units by 2028, and 806,000 additional units by 2030.
The projected increase of dementia-related illness, the pace of wage inflation in senior care, the increase in regulatory requirements in senior care, along with the shortfall of available senior housing will help drive the costs of assisted living higher in the future. Right now, rents vary in cities across the country from $1,126 to $9,711 per month, according to leaders at Seniorly.
Through his family, Jared Antin, managing director of Elegran | Forbes Global Properties in Manhattan, has observed a noticeable shortage of high-quality options for seniors in his area.
“Many affluent individuals are opting for private in-home care to enhance their living quality instead,” Antin said.
Regarding real estate trends, Antin said, “There’s a notable shift with (older) people selling their spacious suburban homes at premium prices and moving into city apartments, often paying in full cash to enjoy urban living once again.”
At the same time, some of Antin’s clients are downsizing from multi-story homes in the suburbs to single-story urban residences or new low-maintenance developments in Westchester County.
“These moves often set someone up to, once needed, arrange part-time or full-time in-home assistance, serving as an alternative to traditional assisted living facilities,” Antin said.
What can be done to ensure all Baby Boomers get the care they need in their golden years?
“Candidly, this growing senior housing shortage affects seniors by limiting their options and increasing the financial burden,” said Glenn Phillips, CEO and Lead Economic Analyst at Lake Homes Realty. “This is a classic supply and demand issue, and when supply is limited, demand drives up pricing.”
Phillips said there are two possible solutions.
“The first is that there will be an increase in construction where builders and developers see such a strong demand,” he said. “Thus, there is business opportunity in meeting this demand. Second would be government influence, and that could be through incentives to builders – be it tax incentives, changes in government-backed loans or interest rates, or other initiatives. No solution is going to be fast.”
Older adults and their family members can make informed decisions about aging care options now by studying up and asking questions.
“Housing markets, interest rates, the economy, and personal finance are all something few want to be an expert in,” said Phillips. “However, older adults must make a point to educate themselves about their aging care options. It’s work, and many people have never been taught solid financial literacy and discipline (if they had, then Americans would not be carrying so much personal debt now).”
Even for people who may think they are too old to tackle their personal situation, Phillips said the reality is that if they don’t, they are leaving their final years to a possibly unpleasant fate.
“Don’t count on luck, count on yourself,” he concluded.
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