What if there is more to the decline in seniors housing occupancy than just new development?
Sometimes it seems I just think too much about this industry. For instance, it has been bothering me that occupancy continues to decline, even in quarters when it should be rising. New development has been having an impact, of course. But what if there is something else going on, or maybe multiple things? A lot is going to happen, and change, between now and when the first boomer turns 80 in 2026, and we may have to wait until they are 85 or even older for the “big impact.” Everyone has been focused on this demographic, and there is the often discussed thought of, what if we increase penetration rates by just one percentage point? That would solve all our problems, right? But what if the penetration rate starts to drop as the boomers age into seniors housing? What if they delay a move into seniors housing by another year, or two, or never? What if there is a new, different option? What if they move back into the cities? I hope to start putting forward some of my ideas in the next few months, not because I am negative on seniors housing, but because we all need to start changing the way we view the industry, and its future.
Strong post, as we’ve come to expect.
You are in the unenviable position of trying to capture an industry, Steve.
As you know, there will be winners and there will be losers.
The chief competitor in Senior Living — The House — is like an elite professional. It gets stronger every day.
Home health, docs making house calls, Lyft/Uber, prepared meal delivery, Alexa, etc, enable people to stay right where they want to stay — ‘thank you very much’ — in their houses.
Winners are acting now, seeking out every, every, edge to inspire more people to move to their communities.
Thanks Dan, and unenviable it is. But I really believe everyone has to be open minded about what may or may not happen. It certainly will get interesting.
Steve great post. While we are tactically focused on occupancy and human capital which are critical for sure, but I think from a strategic point of view you have hit the nail on the head as the biggest issue of all.
Great post
Thanks Steve, and more will come on where my thinking is heading.
Would appreciate reading any articles that addressed the pros & cons of independent senior apartments with reduced parking which is allowed according
to the building code. Example: 80 units only require 40 parking spaces. Has this worked for most developers or did it create problems renting.
Hi Ron. I haven’t seen anything on the parking ratio issue. I would imagine, however, that when self-driving cars go mainstream, more people who couldn’t drive before may want to get a car, which could mean more parking spaces needed. Unless Uber just dominates the elderly market and there is no need. I will keep an eye out. Thanks.
Steve
You make a good point, Steve. We don’t really know for sure which way that Boomer boom is going to turn. But it looks like they will want to stay close into urban areas, within mixed used, multi-generational settings. That’s a design issue. Providers simply have to design for a generation that will never be marginalized due to age. They will define everything else around them as their age-related requirements change.
Thanks Bill, and I agree. A lot of design, location and atmospheric changes will be needed to attract a changing demographic. It may be a wild ride!
Hi as a 20 yr owner of ALF in very rural (7000 people in the county) I have found average age went from 75 and no one being 100 yrs. To 83 average and 100 is not unusual. Elderly are much more active and living longer at their own homes. Medicare and Senior Services are providing many more “In home Care” providers.
The perceived “Worry” about Baby Boomer numbers appears to be just that a perceived misconception which seems to be taking care of itself.
Steve, I totally agree. The number of elderly will certainly be growing, but they will be staying in their homes longer and seeking community-based supports and services to stay home. There will be plenty of people looking to seniors housing, but not at the pace that some people are talking about.