Despite the enormous opportunity that demographics offer the seniors housing industry in the next decade, the affordability factor may prove to seriously sink demand for the product. That makes it that much more important for the industry to provide more middle- and lower-market options but also to demonstrate its value to the consumer. Demonstrating its value relative to alternatives such as…living at home…could prove effective too, which is why ASHA just released a new Special Issue Brief called The Surprising Price of Staying in a House: Cost Comparisons Often Favor Senior Living. The title gives it away.
Prepared by Dan Bernstein, formerly of Stifel and Capital One, and available for download on ASHA’s website, the report shows that since ASHA’s last study on this issue in 2017, inflation has affected costs associated with living and receiving care in the home more than rents have risen in seniors housing, generally speaking. Increases in median net worth among the 75+ cohort, largely driven by increases in home values and the assumption that most seniors own their house, also suggests that affordability for seniors housing costs has improved since 2017.
The report also considers home health care costs, and makes a rather low assumption for hours of care per day per week, factoring in family help on the weekends. Other studies have assumed higher, sometimes more realistic, care costs at nearly equal the cost of assisted living care and without the consideration of home costs. Costs like property taxes, insurance, food, housekeeping, transportation and entertainment all add up, not to mention any conversions necessary to accommodate a senior aging in place.
In the end, the costs of aging either in the home or in a community will be high for the seniors and their families, many of the communities out there will not be attainable for most seniors on a budget, and leaving the home is just never going to be the option for many of us. But dispelling the notion that seniors housing, and we’re not talking about the ultra-luxe communities out there, is exorbitantly more expensive than aging in the home could then allow the consumer to more clearly see the potential benefits of living in a seniors housing community. Benefits to their health, happiness and longevity. Then maybe demographics will be destiny.
