Elder care innovator Dr. Bill Thomas has good news and bad news for the senior living industry.
The good news is, large-scale senior housing developments won’t go away anytime soon, and they can be financially lucrative if done right. The bad news: it’s not what most older adults in the U.S. can pay for, and it might not even be what they want.
“The largest growth opportunity in the field of senior housing is not high-end, highrise high-amenity, urban infill properties,” Thomas said Wednesday at Senior Housing News’ BUILD event in Chicago. “It’s frickin’ America … where people want to live where they want and how they want, but don’t have the housing that makes it possible.”
And while the current crop of senior housing communities won’t vanish overnight, he encouraged his audience to think outside the box in developing new ideas for housing older adults.
“The real adventure, the joy ride, is actually delivering value [for] people of more modest means,” Thomas said. “We think that the age of large buildings segregated by age and ability is not over, but it’s no longer the only game in town.”
Breaking the mold
Part of Thomas’ thinking is that senior housing development has become too focused on the preferences of developers and builders, not what residents actually desire.
“We build spreadsheets outlining projects that scale, not because the elders are demanding a 120-unit senior housing apartment complex, but because that’s what the construction industry is optimized to produce,” Thomas said.
Thomas — a longtime disruptive force in the senior living industry — is perhaps best known for his work with the Eden Alternative and Green House models. He’s also collaborated with well-known senior living providers such as Mainstreet and Holiday Retirement. In recent years, Thomas has become a major proponent of small-home living for older adults with his MAGIC (multi-ability/multi-generational inclusive communities) concept.
He’s not the only one talking about affordability in the senior living industry. Some prominent industry voices, such as the National Investment Center for Seniors Housing & Care (NIC), are warning of the dire consequences posed by not serving the middle market.
Newly released NIC data predicts that the number of middle-income seniors will nearly double to 14.4 million by 2029, with just over half of them lacking the financial resources for private-pay senior living if today’s rates stay put. While that challenge presents a sizable business opportunity for companies which can find the right mix of financing and operating models to serve this demographic, it also ratchets up the pressure on industry stakeholders to come up with new ideas or fall behind.
“It’s a time to throw spaghetti against the wall,” Beth Burnham Mace, NIC’s chief economist, told Senior Housing News in April.
And while some in the industry are hopeful that the sheer size of the incoming baby boomer demographic will be a rising tide that lifts all boats, Thomas doesn’t share that way of thinking.
“Many people are just comfortable with the big box development. They know how to do it. They know how it pencils out,” he said. “[But] demographics alone are not going to save us.”
Small home solution
While the average square footage for single-family homes in the U.S. is growing, many older adults are not using that space day-to-day. At the same time, many of those homes weren’t designed with older adults in mind, a fact that inconveniences many older homeowners and may even imperil their health.
“Since the end of World War II, the average size of new American homes has doubled, and the average number of people living inside it has dropped in half,” Thomas said. “Our housing stock is an echo, it’s an artifact of a different time in our history, and it’s extraordinarily dangerous to older people on multiple levels.”
That leaves many older adults with a tough choice: stay home and risk social isolation and accidents, or move into a senior living community that likely costs them thousands of dollars more per month.
For Thomas, one way to cater to the middle market lies in a smaller model for senior housing — such as his small-home concept pioneered in 2017. Minka homes are built through modular construction and equipped with technology to help older adults live independently.
A single Minka home costs about $152 per square foot, and can be developed on land that might not otherwise work for a more traditional senior housing building.
“Instead of one big project to get 120 units … you can have 10 projects on the books targeted in different locales and markets, and you can connect them all digitally to your network of supportive services,” Thomas said. “We think that a lot of Minkas are going to go on pieces of property that are just not suitable for large-scale development.”
He compared the new housing design to one that many senior living providers already build: independent living cottages.
“We looked at pricing and found that, nationally, communities that had cottages got a 10% premium on cottages, and they’re always full,” Thomas said.
Some organizations have embraced Minka as a possible way forward for reaching a more middle market resident population.
The Clearfield County Area Agency on Aging (CCAAA) is working on a project called Village of Hope, which is set to turn a 23-acre wooded plot of land and a former elementary school into a dementia-friendly series of neighborhoods for people of all ages and abilities. Plans call for 3D-printed Minka homes on the site, and Thomas’ MAGIC concept used throughout.
Another example lies in affordable housing provider Loveland Housing Authority, which last year announced a plan to build nine Minka homes on the campus of its 70-unit community in Loveland, Colorado.
“They have this little spit of land that kind of curved around where they just mowed the grass for 40 years,” Thomas said. “Once they saw our technology, they were like, holy cow, we could put units there.”
In the end, it’s affordability that might usher in a new age in senior housing — for better or for worse.
“Figure out how to build what people want for what they can pay and you will watch a new era in our industry,” Thomas said. “Many people say, oh, that’s nice. But that’s not how you change the world.”
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Source: Senior Housing News