The following is a recap from Varsity’s Roundtable, a weekly virtual gathering of senior living marketers and leaders from across the nation. For updates about future weekly Roundtable gatherings, submit your name and email address here.
The senior living industry has spent decades preparing for the aging Baby Boomer generation. Now that demographic wave is arriving, and the numbers raise some serious questions about the industry’s ability to keep up. With independent living occupancy approaching capacity and demand projected to far outpace new construction, millions of older adults could find themselves without access to the housing, care and community they need.
Brad Paulis, Partner at Continuing Care Actuaries, joined Varsity’s weekly Roundtable to explore what he calls the demographic tsunami and its implications for the future of senior living. Drawing on demographic projections and industry trends, Brad discussed the growing shortage of senior housing, changing preferences around skilled nursing and why traditional development alone won’t meet future demand. He also challenged senior living leaders to think beyond their physical communities and explore new ways to serve older adults. Below are a few Fresh Perspectives from his discussion.
A PERIOD OF UNPRECEDENTED GROWTH
The U.S. population age 75 and older is projected to grow from fewer than 20 million in 2025 to 32–33 million by 2045. With independent living occupancy already around 94%, demographic demand is pushing communities toward capacity despite economic uncertainty.
THE INDUSTRY IS FACING A MASSIVE CAPACITY SHORTFALL
By 2035, senior housing could face a shortage of 1 million units, growing to 2 million by 2045. Over the next 20 years, cumulative unmet demand could leave nearly 6 million older adults without access to the housing, healthcare support and community they want. These projections already account for anticipated new construction.
CHANGING CARE PREFERENCES ARE RESHAPING SENIOR LIVING
Private-pay skilled nursing utilization is declining as older adults increasingly choose to receive additional support in their homes or independent living residences. This shift creates opportunities to repurpose underused skilled nursing space while challenging communities to accommodate residents with greater care needs.
TRADITIONAL CONSTRUCTION ALONE WON’T SOLVE THE SHORTAGE
Land availability, zoning restrictions, construction costs and development timelines make it impossible to build enough communities to meet projected demand. Senior living providers need to explore alternative service models, including Continuing Care at Home programs and other ways to bring healthcare, wellness and social connections to older adults beyond their campuses.
THE INDUSTRY MUST RETHINK HOW IT FULFILLS ITS MISSION
Most senior living organizations define their missions around serving older adults, not operating buildings. Boards and leadership teams need to start conversations now about expanding that mission, developing new partnerships and finding innovative ways to deliver the security, care and sense of belonging older adults need.
