As published in Scotsman Guide's Commercial Edition, April 2005.
Just when you thought you knew senior housing, the market is shifting again to address the changing dynamics of today’s new elders. The traditional senior-housing development that has been built in the past few decades to accommodate one or two care options — such as independent living, congregate care or skilled nursing — is fast becoming outdated.
More-sophisticated older adults and their middle-aged boomer children are searching for a “continuum-of-care” approach and senior-housing developments that include a wider variety of care options, from a wellness center to home health-assistance to assisted living to adult day-care to skilled nursing, hospice and more. Developers and lenders must recognize this approach to stay ahead in the long term and have success in the future. This is particularly true given the long lead time in this type of project; site selection, permitting and construction-financing can take one to five years.
Senior population to nearly double
In the next 20 years, the senior population in the United States will almost double. According to the U.S. Census Bureau, there are 35 million individuals ages 65 and older in the United States today, and the number will rise to 64 million by 2025. Of that number, the number of adults ages 85 and older will grow by 87.6 percent, a consequence of improved health and medical care that helps people live into their 80s, 90s and beyond. A similar comparison demonstrates that today’s 7.3 million individuals who need long-term care services will grow by another 6.5 million in the next 10 years. Nearly one-third will choose to reside in some kind of senior-housing development. Compounding this demand, older adults are choosing to remain in their own homes for as long as possible.
As a result, today’s retirees are entering the senior-housing market at a later age and are much more likely to require complex levels of physical, social, emotional and medical care. Increased individual longevity also means that individuals and couples will remain in senior-housing facilities longer and at various health stages. This is the primary reason why older adults seek developments that boast the continuum-of-care approach. For example, an older adult residing in an assisted-living facility has nearly a two-thirds chance of transferring to a skilled-nursing facility. Furthermore, someone attending adult day-health-care has a one-in-four chance of entering a senior-housing facility for assisted living, Alzheimer’s-disease care or more.
These transitions from one facility to another can happen several times in someone’s lifetime, as the aging process takes its inevitable toll with broken hips, infections, diabetes, heart disease, cancer, chronic pain and other ills and infirmities. Regardless of the event, older adults tend to avoid change and prefer to remain within their comfort zones — and locations, if possible — without regard to costs or other consequences. They prefer to age in place, if possible.
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