Transitional Senior Housing & “Granny Pods” as Aging-in-Place Alternatives

This is the third in a multi-part series following “Will the Nation Go Broke Paying for Senior Housing & Long-Term Care?” Read the first and second installments here, talking about the decrease in nursing home census as states seek to distribute Medicaid dollars in less expensive settings, including assisted living.

With healthcare costs rising and the Great Recession still putting a crunch on many peoples’ wallets, senior housing options such as “transitional housing” or so-called “Granny pods” may emerge as a viable alternative to entering a senior care facility, or at the very least, could serve to delay an eventual move-in.

Select housing manufacturers throughout the country are producing small dwellings that can be constructed on another home’s property, most often in the backyard. Some of these structures are designed specifically for seniors with the idea that instead of going to some sort of facility, or moving into an adult child’s home, the senior can maintain some independence while still being close to family.


Granny Pods

In tough economic times, family-managed care can be the answer, says Kenneth Tupin, CEO of N2Care and creator of the MedCottage.

“We do not think that the MedCottage is a replacement or in lieu of nursing homes,” he says. “There will forever be that need; this is just an alternative for that. It’s for the people that want to participate in family-managed care, [although] we think that most people will still need home health care of a similar service to supplement the responsibility.”


MedCottages are small (288-square-feet), modular buildings that can easily be placed on a homeowner’s property and hooked up to the main house’s water and electric utilities. They’re designed with seniors in mind and include technology that incorporates motion detection and interactive monitoring.

The prototype for these structures was created about a year and a half ago, with the first model created nine months ago. N2Care recently had its first purchase, and the placement will take place in the next couple of weeks in Virgina, in the Washington, D.C., area, Tupin says.

The MedCottage costs about $85,000, and can be sold back to the distributor once its occupant passes away or moves out. “It’s a value proposition, because nursing home care is much more expensive,” says Tupin. “In Virginia, distributors have to purchase them back. It’s an asset you can sell, and if you’ve had it for two years, you can sell it back for about $36,000.”

It’s a “great tool for wealth preservation,” Tupin says, because it allows families to define and control the cost.

“With nursing homes or even assisted living, it is almost financial consumption, meaning that it isn’t satisfied until it has consumed almost all of your wealth,” he says.

Transitional Senior Housing

Another company that offers a similar product is Pacific Modern Homes, which has been in business for more than 42 years designing home plans and kit/packaged homes, but most recently began offering senior-specific models.

The company has been seeing a need for a “backyard home-type approach” as the population ages, says Ken Rader, vice president of marketing for Pacific Modern Homes.

What they’re after is a “transitional home environment” that includes accessible design features, such as wider doorways and hallways and stepless entries. They work with occupational therapists and in-home care professionals to identify the types of care individuals need, and how that fits into a home’s design.

The idea is to produce housing that enables aging in place, removing the necessity to move if mobility becomes an issue, and allowing individuals to transition within their homes.

“Because Boomers and their parents are downsizing, they’re looking to be able to have a couple different options: to live close by loved ones, and have the option to move around and still be functional,” Rader says.

The company recently introduced a new model with seniors in mind called “Sonoma,” a 682-square-foot structure that has a kitchen, living room, laundry room, bathroom, and bedroom.

Consumers can purchase a model home kit (think model airplane kit, but on a much larger scale) and either assemble it themselves or hire a contractor to do so. The pieces of the house are numbered and come with assembly diagrams. The Sonoma “kit” costs $17,000, but hiring a contractor to put it together could cost roughly $60,000.

“If [the consumer] wants to be involved with building it, they could save a lot depending on their abilities,” says Rader, adding that pricing also varies depending on how the inside is finished.

Will Aging in an Adult Child’s Backyard Catch On?

At this point, there’s little data for both N2Care’s MedCottage, and Pacific Modern Home’s “Sonoma” model, Tupin and Rader say. However, both business expect demand for their product to grow as the population continues to age, and seniors (and their adult children) explore long-term care options.

Pacific Modern Homes plans to take their senior-home designing another step forward with a smaller model that will be 400-square-feet, to get around zoning and coding laws to make it easier for someone to build a second home on their property.

County and state regulations are the biggest barrier to these backyard domiciles, Rader told SHN. His company is based in California, where it does the most business, and Rader says zoning and coding issues are the biggest obstacles for people looking at transitional housing.

In Virginia, where the first MedCottage will be located, the structure is considered an additional bedroom, Tupin says, but that could differ from state to state.

He points to cultural attitude as the biggest barrier to these “granny pods” catching on, but thinks there will be a culture shift.

“There has to be some overwhelming economic incentive, and that is the case here,” he says. “When you think of the number of baby boomers—the onus of showing the benefits of these cottages will get easier.”

Written by Alyssa Gerace

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