Emerging Trends That Will Shape the Industry

by Jeff Shaw

Seniors housing is always evolving, but which changes are here to stay?

By Ashley Wilkens

As the world grapples with the ongoing COVID-19 pandemic, and the United States continues to outnumber every other country around the globe in COVID-related deaths, seniors housing owners and operators are working diligently to get ahead of the disruptions and challenges that have plagued the industry over the past two years.

While no one has a crystal ball for what 2022 will hold for the seniors housing industry or the ongoing pandemic, there are some key trends that will shape the road map in 2022.

Trend 1: Emphasis on employee retention and wellbeing

The global health crisis has exacerbated labor shortages across the country, and senior living operators are feeling the squeeze. Employees in the seniors housing industry have very difficult jobs that are both physically exhausting and mentally taxing — especially during these past two years. 

Since the pandemic started in March 2020, nursing and residential care facilities have reported a loss of 413,100 jobs through December 2021, according to U.S. Bureau of Labor Statistics. As a result, it is not surprising that many operators in the industry cite staffing shortages as one of the biggest challenges they are facing.

In 2022, we expect to see more organizations take innovative approaches when it comes to staffing and employee wellness in hopes of preventing burnout and improving overall retention rates. As a result of the COVID pandemic, worker expectations and preferences have changed as employees focus more on work-life balance, wellness, safety and flexibility offered by an employer. 

Providers will need to take a more active approach by offering flexible, part-time and on-demand scheduling. Employees must feel they are cared for by the company, receiving sufficient benefits, appropriate pay and access to high-quality wellness options.

In addition, we will see more implementation of technology in order to make providing top-quality care easier and take the strain off staff. Operators should consider “hospital at home” virtual care technologies or the creation of tech concierge roles to streamline the oversight of new technologies and devices that are available to residents. 

Trend 2: Limited resources drive operational efficiencies

Senior living operational expenses skyrocketed at the peak of the pandemic and remain incredibly high, particularly as a result of labor shortages, inflation and supply-chain disruption. Operators will need to focus on operational efficiencies to reduce expenses while they strive to increase occupancy to pre-pandemic levels. 

In 2021, we saw the level of agency use increase substantially in an attempt to fill staffing gaps. While already more expensive than traditional staffing costs, agency costs have also skyrocketed during the pandemic. 

As a result, long-term use of agency staffing is not financially sustainable for operators, resulting in a growing trend of providers trying to implement more creative, forward-thinking models to reduce the need for third-party agency use. For example, Aegis Living is experimenting with developing an in-house staffing agency in an attempt to reduce costs while also offering a potential new revenue stream if the company expands outside of Aegis Living communities to offer these services. 

In 2022, we expect to see some providers regain or surpass pre-
pandemic occupancy levels, but it will be equally important that those providers harness new technologies and operating strategies to increase profitability impacted by the pandemic.  

Trend 3: Community-driven, service-oriented living

The past two years proved that both wellness and a sense of community are crucial to our health. 

Residents, and by extension their families and loved ones, will seek senior living communities where residents are happily engaged, active and receive personalized care that meets their needs. 

Residents will increasingly look for facilities that offer a “wow” factor at the intersection of luxury living, personalization and wellness. We all live in the era of personalization daily. Everything from music playlists to advertisements is specifically tailored for every user — look no further than Amazon, Netflix and Spotify. 

Why shouldn’t senior living communities follow the same type of concept to meet their residents’ wants and preferences by offering a unique, personalized lifestyle recipe for every person? 

In 2022, we expect to see an influx of new projects, innovative models, and increased amenity packages and service offerings demonstrating how senior living providers believe they can meet this demand. 

We’ve already started to see providers, such as Related Cos. and Atria Senior Living, building high-end, luxury senior living residences in major city centers, such as San Francisco and New York City. These residences offer concierge-style, personalized, high-touch services that are tailored based on their knowledge of residents’ habits and preferences, similar to what guests find at high-end hotels. 

The goal is to create a sense of community culture that extends beyond the physical space. 

Trend 4: Wider adoption of intergenerational developments

Intergenerational developments are coming to market where independent living and memory care centers are built on or within close proximity to college campuses. While many might not immediately recognize the synergies of this type of product, we have seen countless benefits for both residents of senior living properties and students. Seniors can take classes at the university while students can easily volunteer at the senior living facilities. 

We expect to see more interest in this model in the coming years as more active, independent seniors seek the socialization that comes with living in close proximity to younger generations. This trend is exacerbated by the pandemic, as families of varying ages take to residing together to streamline care and safety measures. 

Washington, D.C.-based intergenerational advocacy organization Generations United estimates there are upwards of 200 intergenerational developments across the country, often integrated with a college campus. Retirees are heading to high-density markets in the Southeast and parts of the Pacific Northwest where there are major student populations. This unique model works well and will become more popular in the coming years.  

In addition to a rise in intergenerational senior living developments, we expect to see an increase in more unconventional models like co-
living, manufactured housing and co-ops as owners, operators and investors seek to cater to the younger boomer demographic.

Ashley Wilkens is a director and deputy chief underwriter at Hudson Realty Capital. Wilkens joined the company in September 2021 and oversees underwriting for the seniors housing and long-term care bridge, FHA/HUD and agency financing platform.

You may also like