How One Operator May Have ‘Cracked the Code’ for Small-Home Senior Living

The small-home senior living trend is on the rise — and the leader of one Denver-based operator says his company may have “cracked the code” for scaling up the product type.

That’s according to Dave Lewis, founder and CEO of Rocky Mountain Assisted Living, a senior living owner and operator with a portfolio of 14 small-home communities located throughout Denver..

At the heart of the company’s small-home senior living model is a focus on building homes in small clusters to gain efficiencies of scale. The company has 14 small homes, each with 10 to 16 beds apiece, spread across 10 different locations that are all within a short drive of one another in the Denver metro area.


The clustered approach allows Lewis and the company’s other leaders to check on the communities every day — an area where he believes operators big and small “get into trouble.”

“They lose sight of the day-to-day,” Lewis told Senior Housing News.

Although Lewis’ small-home senior living concept represents just one philosophy on scaling up the product type, it exemplifies where the industry may be headed in the months and years ahead as the small-home trend evolves.


One of the advantages of small-home senior living is its staffing model, with many communities employing only a handful of staffers while maintaining relatively good caregiver to resident ratios.

Rocky Mountain Assisted Living’s staffing model runs lean, with one nurse and two care managers for every four homes and executive directors who oversee eight communities at a time.

The downside to having that few staffers per community is that it can be tough for community leaders to schedule time off — a big driver of turnover in 2022, Lewis said.

But by building communities in close proximity to one another, community leaders can cover for one another, Lewis said.

“You have to have enough management to cover each other so they can take their days off,” he added. “If you have everybody working 24/7 and everyone’s on call, then your turnover is going to be insane.”

Another strength is that residents can more easily move through the care continuum as they need more care.

Under the so-called “big-box” model of senior living, an assisted living resident who needs memory care might have to travel at least one or two miles to move to a new community. Under the Rocky Mountain model, residents need only move next door to another home with specialized care.

And because of the company’s staffing model, residents will have “the same team, same nurse, same manager” as before, Lewis noted.

Rocky Mountain Assisted Living has steadily scaled up over the last four years, and Lewis said the company’s current focus is further refining its model, with potentially one or two opportunities on the horizon.

“We have a couple things in the pipeline we’re working on,” he said.

As the company grows, Lewis said he prefers to build two homes at a time per parcel, with an eye on efficiencies of scale.

Smaller homes carry a smaller cost of development, and Lewis said the going rate in the Denver area is about $150,000 per “door.”. That is up from about $125,000 per “door” before construction costs ballooned in recent years, he said.

But even with that increase, that is still lower than the cost of developing a larger community, which can run about $250,000 or more per unit or higher, depending on the community, according to Lewis.

Although they are cheaper to build, Rocky Mountain can command similar rates as the larger communities in its markets. Monthly resident fees are about $5,000 for the company’s assisted living units, and $6,500 for memory care.

Of course, there are challenges to the model as well. One is the fact that, with so few units per community, margins can quickly compress with just a handful of vacant units. Another is staffing — a challenge for the wider industry, as well — and Lewis said labor costs make up as much as half of the company’s profit and loss statement (P&L).

Looking ahead, Lewis has his eye on scaling up further in Denver, although he said the company is “running out of dirt” for new sites. Although he doesn’t have any firm plans to expand outside of the Denver area at the moment, Utah is on the company’s radar, as are potentially other areas.

“We’d love to partner with anyone who wants to do this somewhere else and help them out,” he said. “And we’re still working on what that looks like, but we’re definitely interested in taking this to other markets.”

For other entrepreneurs looking to scale up in the product type, Lewis has a piece of advice: make sure there is enough land to build on, and start with a few projects instead of just one.

“You need to build out to at least three or four to have some management [efficiencies], otherwise you are going to be there working every day,” he said.

Companies featured in this article: