How Consumers’ Poor Perceptions of Senior Living Point Toward Needed Innovations

Senior living is a luxury good that nobody aspires to own.

I’ve been thinking about this statement from former Welltower CEO Tom DeRosa in light of recently released data, as well as conversations that occurred at our recent Senior Housing News WELLNESS event in Atlanta.

The data shows a big disconnect between how potential residents view senior living communities versus how staff members at communities view senior living.

For example, 72% of staff members described their community’s atmosphere as “fun.” But only 11% of active-aging consumers said they associate senior living communities with “fun.” The survey was conducted through a collaboration between the International Council on Active Aging and Age of Majority.

The disconnect between how consumers perceive of senior living and what senior living providers offer was also a recurring theme at our WELLNESS event. While that disconnect is a problem for the industry, I left WELLNESS excited about how some organizations are trying to solve that problem by creating bold new models.

Some of these organizations — such as Maxwell Group — are well-established providers. But others — notably the pioneering wellness community called Serenbe — are from outside the senior living bubble, and are bringing innovative concepts to market that I believe will push the whole sector forward.

In this week’s exclusive, members-only SHN+ Update, I analyze the new data and ideas shared at WELLNESS and offer key takeaways, including:

• Providers must go further to foster resident autonomy
• Marketing must adapt faster to keep up with evolving senior living models
• Expanding consumer appeal and increasing affordability are two goals that must go hand-in-hand for senior living

Autonomy, not just choices

The ICAA/Age of Majority survey garnered responses from more than 900 “active agers” — people at least 40 years old who are potential future residents of senior living communities. Among these respondents, only 6% plan to move into an “active, 55+ community” and only 3.3% plan to live in either independent living or assisted living.

This finding aligns with the well-known and persistent problem of senior living penetration rates being stuck around 10% — senior living communities simply are not offering an appealing enough alternative to the alternative, of older adults staying put in their homes.

The report authors highlighed the concept of autonomy as a major factor at play, writing:

“In their current homes, active agers have a sense of autonomy. They know their neighborhoods, where all the furniture is placed, and how to get to the grocery store … Active agers may miss the point that once a person moves into a senior living community, that is their private home. They can do whatever they want within the four walls and engage with neighbors, minus the need to maintain that home.”

Active agers indeed might be misunderstanding the level of autonomy offered by senior living communities, particularly in active adult and independent living. But I also think that senior living providers could and should be doing more to enable resident autonomy.

It’s a point that came up at our WELLNESS event last year, with Mather CEO Mary Leary explaining that autonomy is one of the “3 As” underpinning the organization’s new senior living wellness model. And the concept came up again at this year’s WELLNESS conference, including in an anecdote shared by Serenbe Founder and CEO Steve Nygren.

While considering a potential development project for Serenbe focused on older adults, Nygren visited senior living communities considered among the best in their markets. Many of them had six or seven dining venues, which Nygren said served “great food” — and yet, many of the food and beverage leaders and chefs were frustrated, and told Nygren that despite the high-quality offerings, residents still frequently complained.

After speaking with residents themselves, Nygren concluded that the problem is that the residents lack a sense that they have “buying power.” That is, they’ve already paid a bundled fee for dining, and so the venues are not actually competing with each other for residents’ dollars. Nygren said this translates into an attitude among staff of “which dining room are we going to see you in tomorrow night, Miss Jones” versus “I want your business tomorrow night.”

“It’s just a subtle difference in that courtesy and how the person feels,” Nygren said. “So I think that’s one of the big things is how do we allow people to continue to feeling that independence and having that buying power? I think as you get older, that’s the big thing you’re afraid of, is getting your ability for decisions taken away from you.”

Senior living providers might think that they are creating a sense of autonomy by offering residents a choice of dining venue, but Nygren points out that in some subtle but fundamental sense, thy’re really being offered a hollow decision. A real sense of autonomy stems not only from the ability to choose — even a toddler can choose between two outfits, after all — but wielding power through one’s decisions.

One way to tie residents’ decision-making to a greater sense of autonomy might be through greater “unbundling” of amenities and shifting toward a la carte pricing. I’ve written in the past about moves from Watermark, Discovery Senior Living and HRA toward “retailization,” which gives residents more optionality in how they exercise purchasing power within the community.

Shifting to this model demands new ways of operating. Watermark has had to train workers on how to “sell” to residents, including through such basic elements as creating and displaying menus at community cafes, Chairman David Freshwater told me last year. But operators that are learning how to retail are reporting increased ancillary services revenue, and Discovery also was driving occupancy more quickly in independent living communities that had adopted its FlexChoice program that includes a la carte optionality. I think this suggests that prospective residents find the program appealing — perhaps because it more authentically preserves their sense of autonomy.

And Nygren also spoke about unbundling — he used the term “decoupling” — at Serenbe, where plans are in the works to create a seven-acre campus that will include rental apartments, cottages, restaurants and other commercial ventures, and spaces in which health care will be provided.

“We are decoupling everything in that in that seven-acre campus,” he said. “So hospitality, food, health care delivery, physical therapy … we’re setting it up to where you can age in place throughout.”

The jargon problem

The newly planned development is not the first time Serenbe has tried to create housing with older adults specifically in mind. A previous effort involved 16 cottages arranged around a garden, with a shared central house with large, shared common spaces. These cottages would be situated close enough to Serenbe’s single-family homes to facilitate intergenerational living during the day but with enough seclusion to ensure peaceful nights.

“I’d read in one of your publications that seniors wanted to live in intergenerational communities except between 10pm and 6am,” Nygren said.

But these cottages did not sell at first, even as similar cottages located elsewhere in Serenbe were proving popular. Finally, the Serenbe team decided to stop marketing the cottages as being dedicated “55-plus” housing. The cottages then quickly sold, Nygren said — to people older than 65.

He took away the lesson that boomers do not want to be labeled. It’s an observation that has prompted many senior living providers to drop the word “senior” from their brands in recent years.

The logic behind this trend is further reinforced by the ICAA/Age of Majority survey findings. Despite so few of them planning to actually move to an active adult or senior living community, about 64% of respondents identified the following as either a “very appealing” or “somewhat appealing” option: “Healthy, independent older adults live in a community with other people their age and can access on-site recreational, educational, and social activities.”

Given that this essentially describes a senior living community, the report authors suggested “the ‘senior living’ name itself influences negative perceptions.” And they went further, to also question the use of the broader vocabulary commonly used within the industry, including by marketers describing options to consumers.

“Senior living providers need to unpack and abandon familiar industry jargon, especially given consumer confusion caused by the many available types of housing and quality levels,” they wrote. “Even people who work in communities get confused. What does independent living mean to people who already live independently?”

While dropping the word “senior” from brand names and moving away from industry jargon might help solve the industry’s consumer perception problem, I think the larger issue is that new terminology also needs to match the actual product being offered.

Serenbe is not marketing their new development as “55-plus” this time around, but that isn’t just a marketing ploy — the new campus also will have an authentic intergenerational component.

“We’re putting the teen center in the base of the apartment building on the campus, and the art room for the campus is going to be across the street in the school,” Nygren said, noting such moves are part of Serenbe’s larger philosophy of fostering interactions across various age groups through design decisions.

Similarly, Maxwell Group is creating a new offering under the “WellerLife” brand — note the lack of the word “senior” or any mention of “active adult” or “55-plus” in that name. But the product itself also will be bringing something new to market, which doesn’t truly fit any of those more typical terms.

The Weller Life model is a hybrid between active adult and independent living, Maxwell Group CEO Ben Thompson said at WELLNESS. He explained that the idea is to create detached rental homes, “stripping away the bulk of our independent living services, except for interior and exterior maintenance, and wellness.”

So, for instance, dining will not be a component of the Weller Life model, but residents could opt to receive certain services such as housekeeping on an a la carte basis — of course, this is another example of unbundling, which I believe should lend itself to more genuine resident autonomy. And the Weller Life services could include some novel offerings, such as in-home care delivered in increments as brief as 30 minutes, from Maxwell Group’s Live Long Well Care arm. So, much like Serenbe, Maxwell Group envisions decoupling housing, hospitality and health care.

The Weller Life model is meant to attract younger residents who aim to maintain their health and wellness, and the ICAA/Age of Majority survey backs up that many “active agers” have these goals. Out of the top 10 priorities the survey respondents listed for their next 10 years, “becoming healthier” ranked No. 2 and “improving my physical shape/condition” ranked No. 3.

The study authors wrote that providers could “prioritize messaging” related to their wellness offerings, such as “physical activities and access to healthcare, opportunities for intellectual stimulation, spiritual wellness, creativity, volunteering and social connections.”

But — based on comments that Thompson made at WELLNESS — I think that just touting these offerings might not effectively resonate with prospective residents. He stressed that going through a laundry-list of amenities and programs is not as effective as describing the positive outcomes on health and wellness that residents have achieved through participation.

“It’s a really important differentiation when you’re selling it, in particular, because you can feature-dump and say we have this or that, but what’s the actual benefit to having those facilities … or the programs themselves?” he said. “So, we spend a lot of time talking about the actual outcomes and effects, not just what we have.”

Demonstrating affordability

Going back to the quote from DeRosa that I began with, it does seem clear that consumers see senior living as a luxury good — or at least, a costly one. Among the top five concerns that they have about senior living, “cost/affordabilty” was No. 1, cited by 57% of the respondents to the ICAA/Age of Majority survey.

As they seek to create innovative senior living offerings, affordability is on the minds of Nygren and Thompson.

With Weller Life, Maxwell Group is targeting project costs of about $300,000 to $400,000 per unit, with resident fees likely in the $3,000 to $4,000 range, Thompson told SHN in June 2022. Affordability is enabled by the more pared-down operating model, which relieves staffing costs.

And Serenbe will be “demonstrating affordability” in the development projects undertaken in the next five years, according to Nygren. There are plans for workforce housing, and Serenbe already has two 500-square-foot houses on its art campus, which could point the way toward more affordable dwellings.

It’s surely not a newsflash to anyone in the senior living industry that driving affordability, and in particular serving the middle market, is one of the biggest opportunities and most daunting challenges ahead. But the ICAA/Age of Majority findings are yet further evidence that to increase consumer appeal and penetration rates, the industry must focus on making senior living into a good — not just a luxury good — that people aspire to own.