The McKnights article outlines a growing economic bifurcation in the senior living and care market, where the middle-income demographic is increasingly left with no viable housing options.
Key Points of the Article
- Market Split: A decade-high investment wave of $24 billion is creating a market with only two viable options: high-end, luxury Class A communities or low-income, Medicaid-supported housing.
- The "Forgotten Middle": Rising development and operational costs mean private investors and real estate investment trusts (REITs) are targeting wealthy seniors who can afford high-end private-pay units costing $12,000 to $18,000 per month.
- Operational Squeeze: Developing mid-tier housing is no longer financially viable for builders due to surging pressures from labor costs, construction fees, insurance, and regulatory requirements.
- Geographic Trends: The rush of luxury Class A developments is heavily concentrated in high-wealth cities and specific high-growth areas, particularly the Sun Belt and Pacific Northwest regions.
- Call for Intervention: Experts warn that without government intervention or federal incentives similar to those given to affordable housing initiatives, this industry division will continue to worsen.
https://www.mcknightsseniorliving.com/news/senior-living-bifurcation-middle-market
The foregoing is a Google AI summary. The trend raised many questions. What does it portend for communities that seek to be diverse, egalitarian, and above all, caring for their residents? One provider spoke of walking down the hall in a low-end facility and seeing orange foreclosure notices on some doors. Will high-end residents seek the community experience? Is the continuum of care concept an important aspect in their selection of a community?
Richmond Shreve
NaCCRA Board Member & VP
Forum Moderator