Senior Living Operators Stress Caution, Realism for 2027 Rental Rate Increases

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Cautious. Realistic. Surgical. Disciplined. 

These are just some of the ways senior living providers describe their outlook for setting 2027 rental rates across senior living communities. In 2026, they are aiming to find a balance among occupancy gains, expense growth and protecting margins.

Senior living providers continue to hold pricing power as occupancy rates climb across the sector, combined with strong demand. At the same time, the costs of operating communities continue to rise, pressured by labor, insurance, food, utilities and general expenses that are materially higher compared to past years.

In the last few years, senior living providers have pushed rental rate increases across their portfolios, spurred by strong demand and limited new construction activity across the sector.

Looking ahead to 2027, while providers told Senior Housing News they believe there is still room to push through higher rate increases, doing so requires a deep understanding of each community’s makeup and residents’ ability to pay for housing, lifestyle amenities and care offerings.

Providers including Distinctive Living, Frontier Senior Living and 12 Oaks Senior Living are finding ways to increase rates but do so in ways that prevent sticker shock for new entrants considering a move into a community.

‘Increasingly targeted’

Freehold, New Jersey-based Distinctive Living is taking a “much more surgical” approach to rental rate increases next year. The senior living provider is planning in-place resident rental rate increases of approximately 8% to 9% across its portfolio next year, but actual increases may vary by community, market, unit type and resident need, according to Distinctive Living CEO Joe Jedlowski.

Distinctive Living’s approach to rates for 2027 is a moderation from past years after multiple rounds of 9% to 10% increases in the recent past, Jedlowski noted.

“The encouraging part is that we are increasingly able to balance that rate growth with improving occupancy,” Jedlowski told SHN. “For us, 2027 is less about pushing the largest possible increase and more about finding the right combination of rate, occupancy and margin growth.”

This shift toward being caution is not new. Senior living operators have urged caution in pushing higher rate increases so as not to alienate older adults unable or unwilling to pay for costs tied to independent living, assisted living and memory care.

Rate adjustments in 2027 will also be “increasingly non-uniform,” according to Jonathan Woodrow, founder of LivingPath, a technology firm which analyzes senior living rates. The days of the 4% increase across-the-board hike are “going by the wayside,” he said. Operators are targeting rental rates to individual unit types and acuity segments, he added. 

“There’s significantly more variability between unit types and product types this year than prior years, and we expect that stratification to continue,” Woodrow said. “Rates are also being revisited more often over the course of the year and optimized vs just using concessions which can be a blunt instrument.”

LivingPath is assuming 2027 will be a cycle that is “increasingly targeted” with smaller increases where markets are pushing back. Looking at 2027, Woodrow expects 6% to 8% to be the norm for rate growth in the new year. 

Providers will have the greatest pricing power in high demand, luxury two-bedroom apartments in 2027, according to the LivingPath data. In contrast, operators will see the least room to raise rates on independent living one-bedroom units and shared assisted living units, which will face high competition and the most price-sensitive resident base, Woodrow noted. 

Beyond unit mix, LivingPath sees two underused levers heading into 2027 to help operators pad the bottom line as pricing becomes more difficult on rates alone. That could be through community fees, which already equaled or outpaced base rents in 2026 and are typically what operators factor because they don’t interfere with month rates or care pricing at a full continuum community. 

The LivingPath analysis of over 2,600 communities found that campuses offering full continuum services charge approximately 9% less for assisted living and medication management, and about 13% less in memory care than assisted living and memory care-only properties, even though base rents are higher. Care pricing overall has settled into 7% to 9% annual growth, supported by national occupancy near 90% and inventory growth under 1% a year, which Woodrow characterizes as the strongest operator leverage in a decade.

Taking a ‘realistic’ approach to rate increases for 2027

Dallas-based Frontier Senior Living is taking a “very realistic” approach to its rental rate strategy for next year, according to Frontier CEO Greg Roderick. This means taking into consideration the costs tied to operating communities, meeting resident and staff expectations and meeting necessary debt service requirements.

Roderick sees Frontier as a middle-market operator across “most” of the company’s portfolio of communities. While he did not disclose the exact rate increase to SHN, Roderick said that, while rates are “going to continue to rise,” Frontier and other providers must deliver on the expectations residents have when paying more for senior living today.

“Today’s seniors are active, far more interested in quality and lifestyle, and want a positive, beautiful and active community with happy staff to provide services. They take pride in where they reside,” Roderick said.

Rent, though important, is driven by value created by providers today capable of differentiating lifestyle, culinary and care offerings to stand out and align with resident expectations on pricing, Roderick added.

Looking ahead to next year, Roderick said Frontier has not witnessed broad pushback to rental rate increases, and he insists the provider maintains an “open-door” policy for residents and families to meet with staff regarding rates. Roderick credits this lack of pushback to two key factors: the value demonstrated at Frontier communities and the open communication policy the company maintains with residents and families.

“Delivering excellence in service, care and other programs only drives value. Promoting these extra benefits through consistent and continual communication is important,” Roderick added.

For Frontier, Roderick said the company’s Frontier Advantage Network and its Spark program have been useful ways of demonstrating value to residents as rate increases come in annually.

The Spark program is Frontier’s lifestyle and engagement platform designed for all aspects of the senior living continuum, while the Frontier Advantage Network offers on-site healthcare services to connect residents with coordinated medical, therapeutic and wellness services within their communities.

“These are the value drivers that, when coupled with a beautiful and vibrant community that enjoys a positive reputation, our occupancy continues to climb,” Roderick said.

This comes as Frontier communities have reported 24 consecutive months of occupancy growth through the company’s “greatest rental rate increases in our history,” Roderick noted. That is driven by strong demand that continues to “gain even more momentum” heading into 2027.

Houston-based The Aspenwood Company is taking a varied approach to rates for 2027, planning a market-by-market approach that reflect single-digit increases between 7% and 9% for next year, according to Aspenwood Chief Financial Officer Terry Purchal. 

“Our approach for 2027 is focused on balancing rate increases with resident affordability, retention, and long-term community stability,” Purchal said. “While operating costs continue to rise, we recognize that residents and families remain highly sensitive to annual rate increases.”

This effort takes into consideration competition, occupancy trends, resident satisfaction, staffing conditions, inflationary pressures and the ongoing need for reinvestment needs of each community, Purchal added. 

Looking ahead, Purchal said senior living providers must approach 2027 rates with “discipline and transparency” as affordability concerns continue to grow, with residents and families being “more price conscious” compared to past years. 

“The industry’s objective should be sustainable, predictable rate growth that supports quality operations while preserving access and affordability for residents and their families,” Purchal added. “Striking that balance will be critical to long-term success.”

Pushing rate ‘intelligently’ in 2027

Dallas-based 12 Oaks Senior Living is taking a measured, data-driven approach to setting rental rate increases for next year, according to Chief Operating Officer Aaron Catoe.

That means balancing sustained demand and strong occupancy with growing affordability concerns, pushback from responsible parties and mounting cost pressures across the portfolio.

For the past several years, 12 Oaks has pushed hard on rate increases, with increases as high as 13% and leveling off around 10% annually. Since 2022, rates are 40% higher than pre-pandemic levels, Catoe said.

For 2027, 12 Oaks is deliberately pulling back: residents whose current rents are within 20% of market rates will see a 5% increase, while those more than 20% below the market rate will see a 7.5% increase. Catoe said 12 Oaks is prepared to use concessions and reduce increases on a case-by-case basis to retain residents as necessary.

The company is viewing 2027 and the current rate environment through the lens of affordability and inventory as limited supply is being filled by older adults able to pay higher rents, driving occupancy increases, Catoe said.

But as more inventory comes online and providers dust off development pipelines, the senior living industry must rethink its aggressive approach to rate increases in the future, Catoe said. Pushing too aggressively, he warned, risks “killing the goose that lays the golden egg.”

Data analysis is central to the 12 Oaks 2027 rate strategy. The share of prospects deemed not financially qualified for senior living communities has decreased since 2023, and the percentage of leads rejecting communities in that timeframe as being too expensive has fallen as well, Catoe said.

To get ahead of resident and family pushback on rate increases, 12 Oaks directs community executive directors to call families and residents in advance to walk through upcoming increases.

Looking ahead to 2027, Catoe expects operators will remain cautious on pricing despite robust demand. He likens today’s senior living customer to someone with a “sunburn”: a normal pat on the back now hurts because of prior steep increases.

Distinctive’s 2027 rate strategy will be tailored to each community and resident base, considering multiple factors when pushing through an annual increase, Jedlowski said.

“We are pushing rates, but we are doing it intelligently,” Jedlowski said. “I am not a believer in sitting in a Support Center and deciding that every resident across our communities gets the same increase. Senior living does not work that way.”

Instead, Distinctive is crafting its rate strategy by reviewing markets, communities and resident bases, while considering occupancy and performance against market competition, Medicaid exposure and capital investments being made to support value.

When a market can support a rate increase, Jedlowski said the company would be “going after it,” aligning rental rates with value presented to residents through programming, amenities and care service quality.

This “local-first” strategy extends to how the company thinks about pricing power heading into 2027. Jedlowski cautioned operators that factors like rising occupancy and limited new supply cannot be treated as a green light to push rates without reviewing each community on its own past performance and circumstances.

“Pricing power is not a blank check,” Jedlowski said. “You cannot have mediocre food, tired buildings, inconsistent staffing and an average resident experience and then expect families to happily absorb another significant increase. If we are going to ask residents to pay more, I want them to be able to see and feel where their money is going.”

While operators have noted pushback on rates in some instances, Jedlowski said this pushback is a sign that families are “asking better questions” about the services being provided and their associated prices. This makes presenting value to residents and families critical to increasing rental rates in 2027 and beyond.

The bright side of recent occupancy growth and strong demand has been improving operating margins, and all providers that spoke to SHN said these conditions have helped create momentum heading into 2027.

Healthy margins help providers reinvest in communities, funding capital improvement projects and investing in technology to deliver a better resident experience, Jedlowski said.

Simply put, Jedlowski said providers cannot “rate increase your way out of bad operations,” making it incumbent on providers to present value and find consistency in operations before considering whether to increase rates.

“I am not afraid to push rate. I am afraid of pushing rate when we have not earned it,” Jedlowski said. “When we have a great asset, strong occupancy, a great team and a resident experience that is outperforming the market, we should have the confidence to price accordingly. And when we do not, the answer is not a bigger rate increase. The answer is to get better.”