As far as senior living is concerned, it’s time to start planning ahead.
At first, some senior living owners and operators may find that difficult, as the future of the industry tends to be a little foggy, according to Chris Frommell, managing partner at Milwaukee, Wisconsin-based senior living development services firm Direct Supply Aptura.
“When we look out and think about 2027, there’s nothing but uncertainty,” he explained during a July 13 presentation at the 2017 Senior Housing News Summit in Chicago. Plenty of things related to senior housing, he said, are up in the air—including how the federal government may start regulating the industry.
But that doesn’t mean that owners and providers are completely in the dark as to where the industry is headed.
“There are two things that we’re absolutely certain about: changes in the resident demographic are going to dramatically change how buildings are designed, and pressures that are going to be on the construction and care workforces will dramatically change how buildings are constructed, and how they’re operated,” Frommell said.
With these trends in mind, it’s possible to successfully plan for an otherwise uncertain future, Frommell suggested.
Plan to do (way) more with (way) less
By 2027, senior living owners and operators are going to have to do a lot more with a lot less.
“Two things are for sure: construction is going to be more expensive and take longer, and operating a building — paying that care workforce — is going to be more expensive than it is today,” Frommell said.
These two conclusions stem from predicted demographic trends. Today’s senior living residents, for the most part, belong to the Silent Generation, and approximately 22 million members of the Silent Generation are currently living in the United States. In 2027, most senior living residents will be Baby Boomers — and there will be 72 million of them living in the United States.
The senior housing industry, meanwhile, is poised to bring about 28,000 new units online in 2017. For each unit that is brought online, there are 58 skilled laborers and 124 caregivers working in the construction and health care industries, respectively, nationwide.
In 2027, to keep up with increased demand from millions of additional Baby Boomers, the senior housing industry will have to build 67,000 new units, but there will only be 23 skilled laborers and 64 caregivers per unit in the United States.
“That’s a 60% reduction in the construction workforce and a 50% reduction in the care workforce,” Frommell said.
Simply put, some major things will have to change in order for the senior housing industry to house and care for residents 10 years from now.
“Unless we change how we approach the full spectrum of development from the beginning to the end, we’re not going to be able to afford bringing online these 67,000 units in 2027,” Frommell said.
Embracing modular construction
A decade from now, the senior housing industry will be tasked with building thousands more units per year with a dramatically smaller construction workforce. The industry will also have to fight to attract care workers from a much smaller overall pool.
For these reasons, the senior housing industry may want to consider a newer type of construction: modular.
“I would portend that senior living communities, with as much repetition as you see, are a prime candidate [for modular construction],” Frommell said.
In modular construction, 60% to 90% of a building is built ahead of time in a warehouse before being shipped to a construction site, where it is assembled “like Lincoln Logs,” Frommell explained. The process mitigates the risk of weather delays and saves a great deal of material waste, he added.
“It’s a tremendous way to think about building,” Frommell said. “At the end of the day, building well with modular construction is building better, faster.”
Modular construction may not be the only innovative approach that will be useful in 2027 — it’s possible medication management solutions will have advanced greatly by then, and a limited caregiving workforce could be partially balanced out by innovative technology.
In the meantime, senior living providers and developers creating 10-year plans need to account for coming challenges and remember that the same development practices that work today will likely not be sustainable down the road.
Written by Mary Kate Nelson