There was an interesting article in the Wall Street Journal last week that claimed there is a relationship between soft occupancies in seniors housing and more people working from home. The gist of it was that with more people working remotely full time, or even part time, they are better able to check on mom or dad who might otherwise be thinking about moving into seniors housing, and postponing the move because the kids are more involved. The first problem is that this assumes that the kids live nearby, and the reality is that many of their parents have already moved to warmer climates.
The second problem is that it is much more than the need to “check” in on them. If they really need a daily check-in, or more, the parent should probably be looking into seniors housing anyway. And if it is just a “check-in,” one can do a Zoom call just as easily from a thousand miles away. You just can’t check to see if there is food in the fridge or the house is clean, or any other personal behavior changes that would indicate something is amiss.
The story also claims that the markets with high levels of people working from home also have the lowest seniors housing occupancy rates. This includes San Jose and San Francisco in California, and New York City. But aren’t seniors leaving these high tax states and going where their retirement income will go further? The relationship is a real stretch.
Another trend blamed for the “muted” recovery is that the age at which the elderly enter seniors housing has also increased, with people choosing to delay the transition from their homes. The problem is that this “delay” started well before the pandemic, with older, frailer seniors moving in later than they should have, which shortened lengths of stay and increased care needs, and costs. This, combined with the over development from 2016 to 2019, caused occupancy to decline well before we ever heard of COVID.
There are actually a lot of reasons why it is taking longer for the sector to reach and then surpass pre-pandemic occupancy levels, and while remote work may have some impact, it is not the root cause by any means. We just hope we don’t hear this remote work issue as an excuse on any future earnings calls.
