Middle-Income Seniors Won’t Have Money for Seniors Housing by 2029, Says NIC Report

ANNAPOLIS, Md. — In just 10 years, 54 percent of middle-income seniors will be unable to pay the yearly costs of $60,000 for assisted living rent and other costs, even if they committed 100 percent of their annual financial resources, according to a report released this morning by the National Investment Center for Seniors Housing & Care (NIC).

Based in Annapolis, NIC is a nonprofit data agency serving the seniors housing sector. The study was conducted by researchers at NORC at the University of Chicago, with funding provided by NIC, with additional support from AARP, the AARP Foundation, the John A. Hartford Foundation and The SCAN Foundation. The results will be published in the May issue of medical journal Health Affairs.

“We still have a lot to learn about what the emerging ‘middle market’ wants from housing and personal care, but we know they don’t want to be forced to spend down into poverty, and we know that America cannot currently meet their needs,” says Bob Kramer, NIC’s founder and strategic advisor. “The future requires developing affordable housing and care options for middle-income seniors. This is a wake-up call to policymakers, real estate operators and investors.”

The 54 percent data point represents a total of 14 million people over age 75, and accounts for seniors who would sell their homes to afford seniors housing. If those middle-market seniors were to not sell their homes, the percentage rises to 81 percent that could not afford assisted living.

The study projects that by 2029, 60 percent of U.S. middle-income seniors over age 75 will have mobility limitations (8.7 million people), 67 percent will have three or more chronic conditions (9.6 million people), and 8 percent will have cognitive impairment (1.2 million people). For middle-income seniors age 85 and older, the prevalence of cognitive impairment nearly doubles.

“In only a decade, the number of middle-income seniors will double, and most will not have the savings needed to meet their housing and personal care needs,” says Caroline Pearson, senior vice president at NORC at the University of Chicago and one of the study’s lead authors. “Policymakers and the seniors housing community have a tremendous opportunity to develop solutions that benefit millions of middle-income people for years to come.”

The research report suggests that creating a new middle market for seniors housing and care services will require innovations from the public and private sectors. Researchers say the private sectors can offer more basic housing products, better leverage technology, subsidize middle-market residents with higher-paying residents, more robustly engage unpaid caregivers and develop innovative real estate financing models, among other options.

The public sector, meanwhile, can offer tax incentives targeted to the middle market, expand subsidy and voucher programs, expand Medicare coverage of non-medical services and supports, create a Medicare benefit to cover long-term care, and broaden Medicaid’s coverage of home and community-based services, the report recomments.

“This research sets the stage for needed discussions about how the nation will care for seniors who don’t qualify for Medicaid but won’t be able to afford seniors housing,” says Brian Jurutka, NIC’s president and chief executive officer. “This discussion needs to include investors, care providers, policymakers, and developers working together to create a viable middle market for seniors housing and care.”