‘Smaller is Better’: Covid-19 Primes Senior Living for Rise of Small-House Models

Small-house senior living may be well-suited to handle the disruptions of the Covid-19 era. This may help boost the model’s popularity going forward — but the industry will first need to overcome obstacles regarding the way these communities are developed, financed and licensed.

Just ask Jim Stroud, co-founder and former chairman of Capital Senior Living (NYSE: CSU) and current president of Dallas-based holding company Stroud Companies. After leaving Capital at the end of 2008, Stroud set out to find the next generation of senior housing models.

“We said … let’s figure out what model we think that the baby boomers will move into, and that will be flexible and resilient enough to withstand future change,” Stroud told Senior Housing News. “We settled on the small-house concept.”

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Since then, Stroud has made his vision a reality in Sonoma House Assisted Living & Alzheimer’s Care, a community with seven small-house buildings in Carrollton, Texas. Sonoma House opened its doors in 2013, and in the years following, Stroud Companies spent time honing the community’s operational model. Now, Stroud believes the concept is ready for expansion — and, he thinks it’s only a matter of time before the “big-box” senior living companies embrace the small-house trend, too.

“I’ve come from the big company mentality and understand it,” Stroud said. “The big companies are going to recognize this product type, and they’re going to recognize that smaller is better.”

Stroud is not the only one who holds this belief. From architects to providers, there is a sense that small-house senior living may emerge from the current era as a more attractive option, particularly if the model can prove its worth in preventing the spread of Covid-19. 

Small-house success

When the Covid-19 pandemic began ramping up in the U.S. in early March, most senior living providers shuttered their dining rooms, ceased normal activities and halted move-ins and tours as a way to prevent the disease’s spread. In the months since, many have maintained those strict precautions as a way to protect their residents, given the disease’s ability to spread asymptomatically. But how long providers can sustain this way of doing business remains an open question.

Unlike their more traditional senior living counterparts, some providers which focus on small-house settings have not had to disrupt their residents’ lives quite as much when implementing infection control measures. And, there is even some anecdotal evidence to suggest that these communities are better equipped than larger congregate settings to prevent the disease’s spread.

Perhaps the most well-known example of the model is the Green House Project, a nonprofit that senior living innovator Dr. Bill Thomas founded in the early 2000s as an alternative to traditional long-term care settings. Today, there are 268 active Green House homes in the U.S., about 80% of which are licensed to provide skilled care, and the overwhelming majority of them are nonprofits.

Green House properties typically house up to a dozen residents living in homelike facilities with private rooms, and are staffed by “universal workers” who provide a wide range of services and care. The communities prioritize autonomy, and allow residents to set their own schedules, eat the food they like and fill their days with activities they prefer.

Hover Senior Living Community; courtesy of Green House Project

Just nine out of 245 active Green House Project homes have reported a positive case of Covid-19, with six deaths overall, according to Susan Ryan, the organization’s senior director. Those numbers don’t include some Green House homes which haven’t yet relayed their infection data to the larger organization.

“I think a smaller, self-contained, autonomously functioning residence is far better than [one with] long hallways, semi-private rooms or even three- and four-person rooms,” Ryan told SHN. “How much easier is it to contain a virus, and everybody’s got their own room, breathing their own air?”

And the smaller, less congregate nature of small homes is just one piece of the puzzle, she said. The universal worker concept means the communities have fewer workers coming and going, and caregivers are able to develop much closer relationships with residents, giving them an edge in detecting behavior that’s out of the ordinary.

Green House is but one take on the small-house model. There are also numerous other senior living providers that have mirrored the approach in creating their own household models that aren’t officially affiliated with the organization. Though these vary in size and scope, most house no more than one or two dozen residents, and many provide higher-acuity care, such as assisted living or memory care.

Some of these small-house senior living have reported minimal levels of Covid-19, and have touted the model as key to their success. Assured Assisted Living — a company headquartered in Castle Rock, Colorado, with 10 small-home communities in the Centennial State — found just three positive cases of Covid-19 among its residents. All three residents didn’t show symptoms when they had the disease and have since recovered, according to Francis LeGasse Jr., president and COO of Assured Assisted Living.

He credits Assured’s smaller, separated senior housing communities as a big reason why the company has been able to keep its infection rate low.

“The ability to have a scattered site or separate buildings enables us to keep the houses isolated,” LeGasse told SHN.

And even if Covid-19 does hit one of its buildings hard, LeGasse is confident that having a smaller model puts Assured in a better position to adapt to the needs of its residents. In fact, Assured plans to use its Covid-19 success in a new “great things come in small packages” marketing campaign.

“It’s a little play off of the jewelry industry,” LeGasse said. “This is about showcasing what the small packages are, and why they have amplified the importance of care through Covid-19.”

Shepherd Premier, a McHenry, Illinois-based senior housing provider with five small homes, has not yet seen a case of Covid-19 among its residents or workers, according to CEO Brandon Schwab. Like LeGasse, Schwab believes the small-house model is much more amenable to infection control.

“When a home is 10 to 15 beds compared to 150 to 200, you can control the spread of anything drastically easier,” Schwab told SHN. “I feel that this type of home is going to be the Uber of this particular industry.”

What Schwab means is that he believes the small-house model will take the senior living industry by storm in a similar fashion to the way Uber disrupted the taxi cab industry.

“I feel the boutique [small-house model] is going to provide a different alternative to people, post-Covid,” Schwab said. “I think that this is a favorable opportunity, compared to being in these big-box buildings.”

These do not appear to be market-specific trends, either. Boise, Idaho-based BeeHive Homes has 216 small-home senior living franchises bearing its name across the U.S. The company has so far only seen a small number of positive Covid-19 cases among staff and one case among residents, with no deaths reported thus far. The model’s flexibility, coupled with its more intimate nature, helps with infection control measures, according to BeeHive co-owner Dennis Toland.

“As people review and process the pandemic … I think they will find the smaller models were more able to address and control the virus,” Toland told SHN.

‘Solution waiting for a problem’

Among architects and even some developers, there is a sense that many senior living customers will take note of the small-house model’s success after the pandemic is over, and demand for those kinds of communities will rise. But small house communities may come in a variety of layouts.

The small-house communities of tomorrow may resemble single-family homes, as many small-home communities do today, but this is far from the only option, according to Dan Cinelli, a principal at Perkins Eastman.

“It can be rural, it can be suburban, it could be a single-family home that’s detached, or it could be a vertical model,” Cinelli says, referring specifically to the Green House Project model.

The vertical model may hold the most promise for shaking up the formula. Instead of arranging bedrooms throughout a single-story residence as many designers of small-house buildings do, architects of tomorrow may instead place them in buildings with multiple floors.

Two projects Perkins Eastman shared as an example of this design are a three-story small-house building at the Rochester Jewish Home in Rochester, New York; and a four-story small-house building at the Goodwin House in Alexandria, Virginia. In both examples, residents live in spaces with private rooms and bathrooms, decentralized dining and other features that could help with infection control.

The vertical model in particular could prove more popular among senior living developers, according to Joe Hassel, principal and co-leader of senior living at global architecture firm Perkins Eastman.

“The vertical model is much more cost-effective in the sense of land utilization and acquisition costs,” Hassel told SHN.

Two other projects in Dallas may also offer a blueprint for the way forward, according to David Dillard, principal with D2 Architecture. They are The Vistas at CC Young, a nine-story assisted living building; and Ventana by Buckner, a 12-story continuing care retirement community (CCRC) from not-for-profit Buckner Retirement Services. While neither fits the definition of a traditional small-house community, they do include many of the model’s core household-centric principles.

“The small-house model was a solution waiting for a problem, and the problem is Covid,” Dillard told SHN. “If I’m putting my mom and dad someplace, I’d rather put them in a compartmentalized setting with 12 or 16 people than I would a gigantic wing that comes off like a hospital.”

The Vistas at CC Young

Still, there are some sizable obstacles to making the model work. One is the affordability of small-house communities, which often lie on the boutique side and can carry higher rates than their traditional senior living counterparts, especially if they focus on a service like memory care. And planning for small-house construction projects can be more complicated, given that resident rooms are spread farther apart than in so-called “big box” settings, requiring more creative land uses and design considerations.

Another challenge is that small-house communities can be harder to license for senior living services, as regulators don’t always understand the product type as well as assisted living or memory care. For Stroud, this is the biggest challenge in growing the model.

“When you go to someone that has not dealt with a small house before, then you have to educate them,” Stroud said.

But that doesn’t mean the model can’t adapt as challenges arise. Like the architects at Perkins Eastman and D2, Stroud believes a vertical small-house model could help bring about the product type’s next evolution.

“In Chicago, for example, you’re not going to build horizontal with seven communities on seven-and-a-half acres, because it’s way too expensive,” Stroud said. “So what you end up doing is, you build a mid-tower, three- to seven-story building with neighborhood concepts on each floor.”

Stroud believes that providers will navigate the post-Covid world in a manner similar to how assisted living and memory care providers hammered out their model in the early 1990s. He also believes that larger senior living companies will embrace the trend sooner or later. What remains to be seen is whether they will forge ahead with standalone small-house models, or whether they will instead integrate those buildings and concepts into their existing campuses.

“I think ‘small is better’ is going to be the line that comes out of this,” Stroud said. “The lenders are going to look at everything and say, ‘OK, how did you react to a pandemic?’ That’s next on their list, and I think small houses shine well there.”

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