Minimum wage pressures and technology costs contributed to an increase in monthly resident fees within the not-for-profit senior living sector in 2015, but providers predict that rents will remain fairly steady over the next year, according to an annual poll conducted by Ziegler, a specialty investment bank.
More than 170 not-for-profit senior living chief financial officers responded to the survey, which aimed to track the level of resident monthly fee increases to date and estimate potential changes for the year ahead.
The results indicate an average overall increase of 3.16% in monthly fees charged to existing senior living residents in 2015, as compared to an average increase of 3.05% in 2014. Of the respondents, only three reported no fee increase in the past year.
When broken down by contract type, life-care and fee-for-service contracts experienced the greatest increase in monthly rents, up by 3.23% and 3.25%, respectively. Rentals saw the lowest adjustment at 2.93%.
Despite an uptick in rents throughout the last 12 months, providers estimate they’ll adjust monthly fees by a slightly lesser 3.15% in 2016. However, residents under fee-for-service contracts could end up paying more, as providers identified a 3.37% increase among this contract type.
Several participants noted pressures from high minimum wages as having significant impact not their communities, which will continue to drive up expenses and, in turn, resident fees, according to the survey. They also cited costs associated with technology and the Affordable Care Act as influential in rent increases.
Written by Kourtney Liepelt