A: According to a “Forgotten Middle” study from the National Investment Center for Seniors Housing & Care and NORC at the University of Chicago, the age 75+ population will reach 33.5 million people by 2029.

Almost half of those individuals (14.4 million) will be middle-income, meaning that they have too much income to qualify for low-income subsidized senior housing but not enough to afford private-pay senior living.

The study also indicates that approximately 60% of the members of this middle-income market is going to have mobility limitations, approximately 20% will have chronic and/or functional limitations and 8% will have some form of cognitive impairment. There is going to be a significant need for housing that can offer access to services and care in an affordable manner.

Active adult apartments have been emerging as an affordable alternative to traditional independent living. Many older adults are attracted to this product because of the affordable price and the senior-friendly options offered, such as single-level living, non-slip showers, grab bars and medical alert programs. Although the apartments, for those aged 55 or more years, are intended to target younger and healthy independent older adults, the reality is that some residents at those communities already need some assisted living services or are experiencing mild cognitive decline. But this is what they can afford.

Some communities are exploring options to assist their residents in accessing affordable support services through care and service coordinators, who can help with referrals to available resources. Some are establishing affiliations with home care and other service providers that could provide assistance on a more a la carte basis or in smaller time increments. Others are using formal volunteer programs involving family members and other residents to provide support and assistance. There does not yet appear to be a model of affordable housing and care that can be universally duplicated on a widespread basis, however.

This challenge is not going away and will be occurring at the same time in which there will be an overall decline in the number of adult children caregivers due to changing demographics. Senior housing operators, healthcare and other service providers and public policy makers are going to have to work together to develop creative solutions to serving this significant middle-income cohort.

Lynne Moore is president of MDS Research Company Inc., a national senior living and healthcare consulting firm based in Fort Worth, TX, that has been serving clients for more than 50 years. MDS is a two-generation company – she is following in Jim Moore’s footsteps. Ms. Moore is responsible for all MDS market research-related projects involving all aspects of senior housing and healthcare. Lynne Moore can be reached at (817) 731-4266 or lynnemoore@m-d-s.com.

A version of this column appears as “You’ve Got Questions, We’ve Got Answers” in the December 2023 print issue of McKnight’s Senior Living.

The opinions expressed in each McKnight’s Senior Living guest column are those of the author and are not necessarily those of McKnight’s Senior Living.

Have a column idea? See our submission guidelines here.

A: This is a question that we are being asked frequently when conducting senior housing market studies.

A decline in age-55-to-64 adult children households is being observed in many market areas and largely is due to changing demographics. Baby boomers currently are the largest senior cohort and represent 21% of the total population. In 2030, all boomers will be aged 65 or more years and, for the first time in history, older adults will outnumber their adult children.

Due to a significant decline in birth rates after the Baby Boom from 1946 to 1964, the generation following the boomers is a smaller group of households. Gen X, which consists of 19% of the total population, will represent the age 55 to 64 cohort starting in 2030. As a result, there will be an overall decline in the number of adult children households due to the shifting of generations through the various age cohorts.

Those demographic trends are going to have significant implications for older adults, their adult children and the senior living and healthcare services industry. The demand for housing, in-home caregiving, health and long-term care services is going to increase dramatically and put increasing pressure on service delivery systems, Medicare/Medicaid and an already strained staffing/work force situation. If the industry is going to be prepared for the coming wave of older adults, new and innovative service delivery systems and flexible living arrangements need to be explored.

And, although we are very focused on developing products and services for the boomers, we need to keep an eye on the upcoming future generation. Members of Gen X are or will be helping their boomer parents with future housing and healthcare decisions, and they are going to have their own unique preferences and expectations. The key to staying relevant in this constantly changing industry will be understanding the consumer’s existing and future needs and identifying flexible, efficient and cost-effective ways to satisfy those needs.

Lynne Moore is president of MDS Research Company Inc., a national senior living and healthcare consulting firm based in Fort Worth, TX, that has been serving clients for more than 50 years. MDS is a two-generation company — she is following in Jim Moore’s footsteps. She responsible for all MDS market research-related projects involving all aspects of senior housing and healthcare. Lynne Moore can be reached at (817) 731-4266 or lynnemoore@m-d-s.com.

A version of this column appeared as “You’ve Got Questions, We’ve Got Answers” in the October 2023 print issue of McKnight’s Senior Living.

The opinions expressed in each McKnight’s Senior Living guest column are those of the author and are not necessarily those of McKnight’s Senior Living.

Have a column idea? See our submission guidelines here.

A: Baby boomers have become a highly studied demographic over the past few years, and it is clear that their preferences are different than those of previous generations.

Baby boomers — those born between 1946 and 1964 — are characterized as being focused on health and wellness, living an active lifestyle and maintaining social connections that will allow them to stay independent and to live with a sense of purpose. They are self-sufficient, living longer and choosing a higher quality of life. Many are still working and some are continuing to work into their retirement years.

Active adult housing, or age-restricted/targeted housing, is a product that has been developed and designed to appeal to this demographic group. So far, it appears that baby boomers are embracing this active adult lifestyle, and at a younger age than traditional independent living.

If they are to make the move to an age-restricted community, boomers have indicated that their living units should feel like home and have features similar to the home they have moved from, including open floor plans, full-function kitchens, washer/dryers, large closets/extra storage and a patio. They also want options and choices with respect to indoor and outdoor amenities that facilitate and encourage social interaction and shared activities. Security and maintenance-free living are important factors in this move decision, but they do not need or want services such as meals, laundry, transportation, assistance with activities of daily living, etc.

Of course, cost always is an issue, and boomers may be more discriminating about value and concerned about their ability to pay over the long term. To address different levels of affordability and value perceptions, many operators now are offering upper income/luxury, middle income and low income/affordable active adult product offerings and brands within their portfolios. Although it still is a work in progress, emerging active adult products are becoming more diverse, and designs and amenities are constantly evolving to address the preferences of this important target market. It is anticipated that segmentation will continue and that this product type will evolve as more experience is gained with this segment of the older adult population.

Lynne Moore is president of MDS Research Company Inc., a national senior living and healthcare consulting firm based in Fort Worth, TX, that has been serving clients for more than 50 years. MDS is a two-generation company — she is following in Jim Moore’s footsteps. Lynne Moore is responsible for all MDS market research-related projects involving all aspects of senior housing and healthcare. She can be reached at (817) 731-4266 or lynnemoore@m-d-s.com.

A version of this column appeared as “You’ve Got Questions, We’ve Got Answers” in the August 2023 print issue of McKnight’s Senior Living.

The opinions expressed in each McKnight’s Senior Living guest column are those of the author and are not necessarily those of McKnight’s Senior Living.

Have a column idea? See our submission guidelines here.

A: The significant growth of the older adult population (specifically, the older baby boomers) over the next several years will present new opportunities for senior living community owners, operators, developers and investors. Although the increase in the demographics will be dramatic, the housing options available to those older adults will be driven, in large part, by their financial resources.

Accurately defining the appropriate qualifying income criteria for a specific project is a critical assumption in assessing potential market demand. This affordability issue, which has not always been appropriately quantified, makes the need for a market study more important than ever.

Research has confirmed that the true cost of living for an age- and income-qualified older adult before and after moving into a market-rate rental independent living community often are quite similar, with the true cost comparison frequently favoring senior living communities. For example, a rental independent living community that includes a meal program, housekeeping, flat linen service, transportation and utilities, along with the apartment, is estimated to account for 60% to 65% of an older adult’s living expenses. If the rent for this community is $3,500, then this person would need a total before-tax qualifying cash flow income of $64,615 ($3,500 / 65%), before incurring any spend-down of other assets. This cost of living factor, obviously, would be adjusted based on the services included in the rent.

An active adult, service-free community would account for 35% to 40% of the living expenses, whereas assisted living and memory care could cover up to 80% to 85% of the living expenses. The remaining portion of the cash flow income is used for personal and discretionary items and activities outside of the senior living community.

Other financial resources can be used to pay for market-rate senior housing, including other savings/investments, financial assistance from family, Veterans Affairs benefits and long-term care insurance. Those resources can be difficult to accurately quantify, however, and typically are considered to be forecasting safety margin when evaluating the demand for new senior housing.

Lynne Moore is president of MDS Research Company Inc., a national senior living and healthcare consulting firm based in Fort Worth, TX, that has been serving clients for over 50 years. MDS is a two generation company – she is following in Jim Moore’s footsteps. Ms. Moore is responsible for all MDS market research-related projects involving all aspects of Senior housing and health care. Lynne Moore can be reached at (817) 731-4266 or lynnemoore@m-d-s.com.

A version of this column will appear as “You’ve Got Questions, We’ve Got Answers” in the June 2023 issue of McKnight’s Senior Living.

The opinions expressed in each McKnight’s Senior Living guest column are those of the author and are not necessarily those of McKnight’s Senior Living.

Have a column idea? See our submission guidelines here.

Q: How do I appropriately and accurately define my primary market area?

A: In a market feasibility study, one of the first tasks will be to define the primary market area for a senior housing community. This is the area from which it is expected that the most residents will come. This geography will be the basis for acquiring demographic data, analyzing the economic base and identifying existing and emerging senior living competition.

The PMA definition is influenced by several factors, including natural geographic boundaries, man-made barriers, psychological boundaries and major thoroughfares/drive times. Affiliation with affinity groups, such as faith-based or healthcare organizations, also can influence the PMA definition and/or absorption assumptions.

The PMA typically represents a five- to eight-mile radius, depending on the specific market area. In a very dense urban market area, the PMA may be much smaller than in a less densely populated and more rural area.

For the acquisition of demographics and other data, PMAs are defined using discrete political subdivisions such as counties, cities, ZIP codes or census tracts. As a result, the actual PMA may be irregularly shaped and will represent different sizes of geography — custom-tailored for the specific market and project under consideration. Using ZIP codes or census tracts also allows for a more detailed analysis of the demographics within the overall PMA, specifically identifying the locations of the density and age- and income-qualified older adult prospects and the adult children/decision-influencers.

Many existing senior living communities have the ZIP codes of the addresses from which their residents came when they moved into the community. In some cases, they have the ZIP codes of the adult children and marketing prospects/leads, too. This information can be used to define the actual PMA being served and, if the communities have the historical data, how it may have changed over the years. Comparing this information with the actual demographics in the area could influence current and future target-marketing activities.

An appropriate definition of the PMA will be necessary to understand the market and to accurately assess demand and absorption assumptions. It will be critical to the future success of both new and existing senior living communities.

Lynne Moore is president of MDS Research Company Inc., a national senior living and healthcare consulting firm based in Fort Worth, TX, that has been serving clients for more than 50 years. MDS is a two-generation company — she is following in Jim Moore’s footsteps. Ms. Moore is responsible for all MDS market research-related projects involving all aspects of senior housing and healthcare. Lynne Moore can be reached at (817) 731-4266 or lynnemoore@m-d-s.com.

This column appeared as “You’ve Got Questions, We’ve Got Answers” in the April 2023 print issue of McKnight’s Senior Living magazine.

The opinions expressed in each McKnight’s Senior Living guest column are those of the author and are not necessarily those of McKnight’s Senior Living.

Have a column idea? See our submission guidelines here.

A. Yes, if you want to make data-driven due diligence decisions regarding the feasibility of a new senior living development or the evaluation of an existing community.

If you are trying to determine the overall viability of a new to-be-developed senior living project or continued success of an existing community, then getting a market study is one of the first things you will want to do. A good market study will assist in a thorough understanding of the market area and should provide the following useful information:

1. Definition of the area from which you will draw residents,
2. A demographic and economic/affordability analysis,
3. A detailed evaluation of the existing and planned senior housing competition,
4. Estimates of demand for each living arrangement and
5. Definition of the project characteristics, including the size of the project, unit mix and sizes, pricing, resident services, amenities and features.

The market study can support go/no-go decisions regarding project development, facilitate the participation of other partners in the project and assist in securing financing.

It will provide information for existing operators that are dealing with ongoing economic uncertainty and that are considering important financial and operational changes at their communities. The market study can confirm continued future demand, obtain and compare information on area senior housing competitors and influence strategic planning for the continued success of communities. Strategic planning at existing communities has resulted in changes to the mix of living arrangements, adjustments to pricing, tweaking of service packages, the addition of new units and overall repositioning in the market area.

We’re at the beginning of 2023, so now may be the time for a new market study or an update to an existing mature market study. It is a useful tool that will be used by all members of the senior housing team, including operations, management, design, architectural and marketing team members.

Although it is not the only tool, it is an important first step that will provide necessary and critical market intelligence that will assist in mitigating risk during the overall planning process and increase chances of future success.

Lynne Moore is president of MDS Research Company, a national senior living and healthcare consulting firm based in Fort Worth, TX, that has been serving clients for more than 50 years. MDS is a two-generation company — she is following in Jim Moore’s footsteps. Ms. Moore is responsible for all MDS market research-related projects involving all aspects of senior housing and healthcare. She can be reached at (817) 731-4266 or lynnemoore@m-d-s.com.

This column appeared as “You’ve Got Questions, We’ve Got Answers” in the February 2023 print issue of McKnight’s Senior Living magazine.

The opinions expressed in each McKnight’s Senior Living guest column are those of the author and are not necessarily those of McKnight’s Senior Living.

Have a column idea? See our submission guidelines here.

Q.  What are trends and challenges to watch in the senior housing industry in 2023?

A.  Things are improving, but in 2023, issues still will need to be addressed.

As we end 2022 and swing into 2023, it appears that the senior living industry will be dealing with many of the same operational challenges as in 2022, including availability of and cost of labor, increased operating expenses and inflation.

Occupancies are slowly increasing, and operators have achieved rent increases, but many communities are still dealing with less-than-optimum census. The good news is that the demographics are in our favor, and there continues to be future demand.

Some key issues that now are being addressed:

• Will younger senior cohorts (baby boomers) be attracted to senior housing? What do they want in terms of the physical product and lifestyle, and how do we get them to move into those communities?

• How can the industry address future affordability challenges or the middle-income market? This involves value-engineered designs, unbundled services, alternative service delivery systems, use of third-party home care companies and more.

• Will active adult housing expand the continuum of care and attract young seniors? It offers maintenance-free and service-free living with access to amenities and socialization opportunities to attempt to target a younger senior and affordability. Communities are built as freestanding developments or as an addition to an existing continuum of care.

Many new approaches to operations, marketing and communications and service delivery have resulted in favorable effects for the senior living industry. Use of and reliance on technology, digital tools and virtual communication are the kinds of resources that will be useful in communicating with this next generation of senior prospects. Telehealth services, partnerships with third-party home health and caregiver providers and delivery of on-site healthcare services increasingly are being used for the convenience of both the operators and the residents. All of those things also should be helpful in addressing affordability.

Continued future improvement and success will require staying focused on fundamentals and clearly defining and communicating your market position including a description of the lifestyle, amenities and benefits of this living arrangement.

Lynne Moore is president of MDS Research Company Inc., a national senior living and healthcare consulting firm based in Fort Worth, TX, that has been serving clients for 48 years. MDS is a two-generation company – she is following in Jim Moore’s footsteps. Lynne Moore is responsible for all MDS market research-related projects involving all aspects of senior housing and healthcare. She can be reached at (817) 731-4266 or lynnemoore@m-d-s.com.

This column appeared as “You’ve Got Questions, We’ve Got Answers” in the December 2022 print issue of McKnight’s Senior Living magazine.

The opinions expressed in each McKnight’s Senior Living guest column are those of the author and are not necessarily those of McKnight’s Senior Living.

Have a column idea? See our submission guidelines here.

Have you recently mystery-shopped the senior housing communities in your market area? You should. You may have more competition than you think.

Having a detailed understanding of the other senior housing communities in your market area always has been important in the sales and marketing process, but it may be more critical than ever as such communities continue to struggle to regain occupancy.

Our recent mystery shop in a busy metropolitan area indicated that tours were occurring at communities, and many are aggressively competing for the same customer in terms age and affordability profiles. This means that operators must communicate clearly what they do (or don’t) offer and how they differ from the other senior living communities in the area.

The lines between the living arrangements in senior housing have been blurring and are becoming grayer. Independent living communities, without licensed assisted living, tell prospective residents and their families that older adults can receive assisted living services from home health agencies in their apartments without moving to assisted living. Assisted living communities often position their base level of care (without personal care assistance) as independent living with the ability to age-in-place and access services when needed. And, of course, there is the continuum of care that offers all of living arrangements within the same community.

None of this information is new to those of us in the industry. But many senior living consumers and their adult children do not have the same understanding and perceptions regarding the nuances and operating differences between the various living arrangements, and many may not understand what they actually need. As a result, everything can be perceived to be competition, and selecting the right option can be confusing and challenging for them.

Savvy marketing personnel are working hard to communicate a unique market position for their communities in a way that clearly communicates the benefits of what they have to offer and how their operating philosophy is different and better than other communities. Mystery shopping the competition will provide the information and ammunition needed to develop your strategy and fine tune your sales and marketing program. You can be sure your competitors are doing the same.

Lynne Moore is president of MDS Research Co., a national senior living and healthcare consulting firm based in Fort Worth, TX, that has been serving clients for 48 years. MDS is a two-generation company; Lynne Moore is following in Jim Moore’s footsteps. She is responsible for all MDS market research-related projects involving all aspects of senior housing and healthcare. Lynne Moore can be reached at (817) 731-4266 or lynnemoore@m-d-s.com.

This column appeared as “You’ve Got Questions, We’ve Got Answers” in the October 2022 print issue of McKnight’s Senior Living magazine.

The opinions expressed in each McKnight’s Senior Living guest column are those of the author and are not necessarily those of McKnight’s Senior Living.

Have a column idea? See our submission guidelines here.

Q.  Will active adult living experience the aging-in-place challenges experienced by other living arrangements in the senior living and care continuum?

A.  Not in the short run, but there could be challenges in the longer term.

Active adult apartment living still is a relatively new senior housing option that has been gaining popularity from an owner/operator, developer, investor and consumer perspective. The industry still appears to be grappling with what exactly it should be called and what needs to be offered to attract a younger senior population. We can be fairly sure of one thing, however: that residents are going to age-in-place, and there is likely to be some “acuity creep” as the community ages.

Current experience tells us that the average move-in age into active adult housing is 72 to 74 years old. In eight to 10 years, those residents will be 80 to 84 years old. Some of those aging residents will want or need some support services and will expect that those services can be delivered into their apartments. And, as frequently happens, they will resist to moving to another level of care. Some may stay in their apartments longer than they should.

This is the nature and cycle of senior living. Many of those future challenges can and are being addressed in several ways. Successful active adult communities must plan for and develop creative approaches to address aging-in-place while also effectively maintaining the integrity of the “active lifestyle” offered at the community. Some of those approaches will be described in a future column.

Lynne Moore is president of MDS Research Co., a national senior living and healthcare consulting firm based in Fort Worth, TX, that has been serving clients for 48 years. MDS is a two generation company — she is following in Jim Moore’s footsteps. Moore is responsible for all MDS market research-related projects involving all aspects of senior housing and healthcare. Lynne Moore can be reached at (817) 731-4266 or lynnemoore@m-d-s.com.

This column appears in the August 2022 print issue of McKnight’s Senior Living magazine as “You’ve Got Questions . . . We’ve Got Answers.”

The opinions expressed in each McKnight’s Senior Living guest column are those of the author and are not necessarily those of McKnight’s Senior Living.

Have a column idea? See our submission guidelines here.

Q.  Is the active adult apartment product successfully attracting and serving a younger and more active segment of the senior population?

A.  Active adult apartments are attracting an age profile that is 10 years younger than traditional independent living but still 20 years older than the qualifying age requirement.

Several active adult housing products exist across the country, but the freestanding active adult apartment building is the product that currently is emerging in many markets. Although these apartments are restricted or targeted to the age 55+ or age 62+ population, the average age profile of the current residents at those communities is 72 to 74 years old. This is a decade younger than the average age profile of the traditional independent living resident but almost 20 years older than the qualifying age requirement for active adult housing.

Baby boomers make up the next generation of younger seniors, and they currently range in age from 57 to 76 years. The younger boomers appear to be exhibiting the “I’m not ready yet” syndrome — they are resistant to moving into and paying for a service-enriched living environment, and they may not have a clear understanding of the active adult lifestyle. They want to live independently until a move is needed — whatever that means to them — and there are no signs this is changing soon.

Having a clear understanding of the needs and motivations of the different age profiles of this target market will be necessary in developing and communicating a specific definition and market positioning for the active adult apartment lifestyle.

Lynne Moore is president of MDS Research Company Inc., a national senior living and healthcare consulting firm based in Fort Worth, TX, that has been serving clients for 48 years. MDS is a two generation company — she is following in Jim Moore’s footsteps. Ms. Moore is responsible for all MDS market research-related projects involving all aspects of senior housing and health care. Lynne Moore can be reached at (817) 731-4266 or lynnemoore@m-d-s.com.

This column appeared in the June 2022 print issue of McKnight’s Senior Living as “You’ve Got Questions . . . We’ve Got Answers.”

The opinions expressed in each McKnight’s Senior Living guest column are those of the author and are not necessarily those of McKnight’s Senior Living.

Have a column idea? See our submission guidelines here.