Senior housing construction costs are rising and showing no signs of slowing down, according to a Jan. 25 construction costs brief prepared by Larry Graeve, senior vice president of construction firm The Weitz Company. The brief was prepared for the American Seniors Housing Association (ASHA).
Like last year, an ongoing labor shortage in the construction sector was one big reason for this year’s price increase. Lumber prices also increased by 13% in the past year, mostly because of the active hurricane season and smoldering concerns over the possibility of tariffs imposed on Canadian wood, according to the brief.
Mid-level assisted living projects currently range between $170 per gross square foot and $212 per gross square foot, depending the building materials used and the location of the construction process. Meanwhile, mid-level independent living projects clocked in between $141 and $171 per gross square foot.
Last year, mid-level assisted living projects ranged in price between $158 per gross square foot and $210 per gross square foot, while independent living projects ranged between $130 and $167, according to Weitz. Construction costs related to senior living also rose in 2016.
“Though we see strong construction activity, we also see some leveling of inflation in many markets,” Graeve wrote in this year’s brief. “Escalation rates vary across the country; some markets see a 3.5% to 5% annualized increase while the busiest markets see a 6% to 8% increase.”
Written by Tim Regan