Affordable Life Care and Seniors Housing
The National Investment Center recently published a report that focused on seniors. It stated that 14.4 million people in American is expected to be part of the middle market by 2029, which showed that 54% of those would not be able to afford any seniors housing. Just between 2014 and 2029, the middle-income senior population that is over 75 years of age will grow by 82%.
This can be seen as a potential crisis and when it is looked at from a business perspective, it can be a large opportunity, especially if the life care industry is able to figure out how to create affordable seniors housing.
According to the NIC, the middle market is people who have too much wealth that they don’t qualify for any governmental support like Medicaid, but do not have enough to have private pay senior care for long amounts of time. There is only 19% of middle market seniors that are able to afford life care with income while the other 46% will need to take from their home equity.
The research that has been done is often done by those that have private equity companies who funds are what invested into private
pay, high end seniors housing but the research on the middle market is very important. It is from this report that you are able to notice that by 2029, large amounts of seniors will not able to afford what people are investing in.
The big question is, what will it take for the industry to make more housing that be can be afforded?
According to the NIC, the industry is going to need to build over 750,000 units in order to support the middle market that is always forgotten.
Education for the Public
It is not something that you will often notice such as in-home news or living news about how public education and senior housing need to be used in the same sentence. Even though most people believe that building affordable senior housing is going to be simple as building it and then charging less, but those who are in the industry do know that it isn’t simple. There are many issues like zoning laws, construction costs, immigration, tariffs, and even a lowered workforce for construction that contribute to high costs of senior living. None of this will ever change by decreasing the cost of rent.
Education for Local and State Government
Even though most in this industry are not politicians, but it does mean that some local level political muscle is used.
If local communities were able to offer incentives like property tax relief, accelerate application processing for those who are going to build affordable housing, density bonuses, and there may be more people who would do this.
When you are able to avoid all the hard points that come with building new communities it could help out a lot more.
Consider New Model Types
It is very possible that home news needs to look to how senior housing could look different in the future. Operators have really increased the quality over the more traditional nursing home by offer higher end and spacious models and amenities. However, these communities can’t be done at a more affordable rate, they may not end up being relevant to people who need them.
BrookDale looked into an option like Ppods, which is a option developed by Living Solutions LLC. This is a living situation that would be temporary that is portable for any senior, no matter what their income is. The Ppods can be placed in yards or driveways and do not need water or sewer hookups. These can be gotten with a prescription from a doctor and are leased which means that zoning concerns are not a big deal. The Ppods are designed for the 71% of seniors that live in suburban or rural areas so that they are able to age close to their family.
Even though the more traditional senior housing options look at Ppods as a type of competitor within the marketplace, but they can also see it as a way to offer similar options to help their business grow. It is time that the egos are let go and new care models are considered for those who really need them.
Lobby for It
When you are armed with a knowledge of the need for more affordable seniors housing, the industry will need to do what we can in order to talk about how important tax credits are in order to support this. The main issue needs to be at the front of everything if there will ever be a chance of meeting the needs of the middle market seniors.
A little Give and Take
On of the biggest challenges that an investment has is attracting an investor. Any company that is interested in starting a private equity fund that has been dedicated to affordable senior housing can make a big case for demand, and that affordable housing is not as risk. Yet, is the low risk good enough for an investor to deal with a lower return?
One option to fix this is to create a housing community that is mixed income, where part of the units is dedicated to low income residents. When this is done, there is not 100% profit, but the new units would be available for those that need them.
The Responsibility of Aging Americans
Being able to find a way that there would be an option for affordable senior housing as a reality is not just a simple option. It is a responsibility for the industry. The industry will have to work together to create a place for middle market aging to live and age for the future. It won’t be easy, and it could take years until a model is created that works.