Seniors housing occupancy hits a low because of new supply, while active adult communities begin to take off.
As you know, occupancy in seniors housing now stands at a low point since the Great Recession, especially on the assisted living side. Eighteen months ago, “the market” was looking for a turn around by the second half of 2018. Not happening. Now it is the second half of 2019, with some looking at 2020. Maybe happening.
New supply has obviously had its impact, and people keep on developing. But some developers are moving into what is variously called the 55+ market or “active adult” communities. They are easier to zone, cheaper to build and don’t require much staff, all important factors today.
But I keep on coming back to several questions. Who are these 70 to 75 year-olds moving into these apartment buildings, and why are they moving? Are we creating a whole new subset of seniors housing to be added to IL, AL and skilled nursing? Will these buildings morph into unlicensed assisted living over time as the residents hire their own home health aides?
Finally, will they really fulfill a current unmet need, or will they eventually exacerbate the current occupancy problem over time, as residents age in place? Perhaps both. Stay tuned.