Labor Shortage Drives Up Senior Housing Construction Costs

A shortage of skilled workers has driven labor costs for senior living construction projects upward, causing some contractors to even turn down work or be more picky in the projects they choose.

While the labor issue continues, material prices remained relatively stagnant in January after registering as costlier in August, according to a report released Wednesday. The research, conducted by the American Seniors Housing Association (ASHA) and Des Moines, Iowa-based national construction firm The Weitz Company, results from the partnership’s biannual effort to track cost of construction in the senior living sector.

“The effect of this skilled labor shortage is significant, as we have seen the selling price for construction services increase nearly 10% this past year,” Larry Graeve, senior vice president of senior living for The Weitz Company, said in a prepared statement. “For the coming year, we anticipate a more moderate increase of 3% to 5%.”


Overall, construction costs for independent living and cottages hung the lowest in January, at maximums of $216 per gross square foot and $191 per gross square foot, respectively. In August, the cost to build independent living hit up to $214 per gross square foot and cottages reached $189 per gross square foot.

Skilled nursing remains the most expensive to build at $302 per gross square foot as compared to $299 per gross square foot in August.

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Written by Kourtney Liepelt

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