With increased costs at all levels, the seniors housing industry must work as a whole to maintain affordability for residents.
By David Tague
The COVID pandemic has changed life for all of us in some very unique and impactful ways. For the senior living market, the pandemic has materially impacted construction from both a price and design standpoint. This forces designers, developers, owners, operators and contractors to work in lock-step to continually innovate and find new solutions to bring quality and affordable product online for seniors across the United States.
As a baby boomer, I am not only a member of the generation that coined the “silver tsunami,” but I have lost two family members in the last five years. My mother-in-law lived with me for four years and passed away in January last year in the midst of the COVID pandemic. She didn’t die from COVID, but she suffered miserably from the isolation she felt, unable to attend church services, connect with her social network and participate in frequent activities such as going for doctor visits.
This is the story of countless people who are dealing with the pandemic. Isolation, social anxiety, higher vulnerability to the virus, and limited access to supplies and services they need to be comfortable are all factors that go into an important decision: Should a senior continue to live independently or move into a senior living facility?
Affordability creates a barrier
One of the other factors which has been a driver to the ability to say “yes” to the change in lifestyle for years is affordability. The impact of COVID has affected this as well, but from two completely opposite positions.
The cost of construction has skyrocketed during the pandemic and construction schedules have increased, due to workforce availability and supply chain constraints on construction materials.
Operators have been forced to consider increases across all service levels and they, too, have been impacted with these same issues of workforce availably and supply-chain woes.
The counter to this has been the drastic increases in home values. For many, the equity currently available if selling one’s home significantly and positively influences the financial analysis of affordability, and can ease the decision to move to a senior living residence. The timing of these two factors — supply available and affordability — do not necessarily align because of the time it takes to build new facilities and the ability to afford the increased costs.
While workforce availability and materials cost increases have been a huge driver of the cost increases in construction, the design of senior living facilities responding to the COVID pandemic have also contributed.
The aforementioned isolation is one of the necessary considerations when designing these facilities. Socialization and the ability to isolate, when required, are at odds with each other in providing the appropriate care for this population. Thoughtful and well-conceived program space dedicated to the ability for shared activities, rehabilitative services and therapy along with comfortable units have invariably added space to these facilities and, hence, greater costs.
Some market-rate apartments are seeing increased interest in renters that are getting close to retirement, with adult children out of the house and living on their own closer to their employer. This is often reported as a means to spend less time commuting and more time enjoying amenities available at these apartment complexes. Many times it provides a mechanism to start the process of downsizing households, which then makes it easier to transition into assisted care when the need arises.
What we have started to see is independent living projects with enhanced amenities that are popular in market-rate apartments. All of these factors have a tendency to increase program areas and reduce the efficiency of the building design, which impacts the cost for rentable areas.
Additionally, designers must be focused on air circulation. Specifically, HVAC systems need to be designed to improve air purification.
Most people may not know that outside air is generally considered cleaner than the air we breathe indoors when not properly filtered. With an increased focus on transmission of illness, the quality of the air is a primary focus of mechanical engineers responding to the pandemic.
Whether it’s ultraviolet light systems attached to the ductwork, greater circulation and cycling of outside air, or dehumidification in wetter climates, the cost of incorporating these systems is included in the overall impact of the pandemic.
New developments continue
Despite all of the hurdles we must navigate today on the design/
construction side, there is still an abundance of senior living product that is planned and coming online in order to meet the coming wave of residents that will need seniors housing.
What’s encouraging from both a design/development and construction perspective is that we are still working together collaboratively to find ways to make projects work, regardless of the current design challenges and pricing pressures.
The old adage — “this too shall pass” — is certainly appropriate. Pricing pressure will abate at some point, but it’s anyone’s guess as far as when that will be. The design changes we see incorporated due to pandemic pressures are likely here to stay.
Having worked 15 years for a large CCRC provider during my 39-year career, and continuing in the senior living industry for Cadence McShane Construction, I have worked alongside the operator, developer and other stakeholders in understanding the balance between design, development, construction and operations. I have continued to provide this broad range of experience and have a great passion to help meet the needs of our aging population.
There are roughly 10,000 people reaching retirement age every day in the United States. The ability for us to take care of our most vulnerable population is greatly impacted by the pandemic. By working together, we can identify the designs that meet these needs, while helping mitigate construction costs, adjust to supply-chain constraints and provide the best value to all stakeholders in order to make the whole development process more seamless and predictable.
David Tague oversees Cadence McShane’s ongoing multifamily and senior living residential projects and is responsible for seeking opportunities for the development of new construction throughout Texas and the south-central region.