How Will We Meet Rising Demand for Senior Housing? We Have to Innovate.

In the senior housing and care industry’s current state, supply is not going to meet demand any time soon.

The need for our services is growing quickly, fueled by the demographics of an aging society. The cost of building new communities and providing the services is growing quickly, too, as construction remains expensive and labor scarce. The product is unaffordable for many now, and unlikely to become more affordable as-is.

It’s easy to look at the situation and get discouraged when it comes to how we will meet escalating demand.

Instead, I like to point out that this moment is made-to-order for innovation. It’s the perfect time to figure out new ways of delivering our services and trying new models.

Tim Regan’s recent piece in Senior Housing News did a good job of explaining why we’re where we are now. By 2030, the youngest Baby Boomers will be 65 years old. We don’t have enough senior housing now, and to meet the need in five years, a lot of construction needs to start now.

“While the cost of capital has improved slightly since last year, many projects still don’t pencil out,” NIC Senior Principal Omar Zahraoui told Regan, “and the floodgates for new development are unlikely to open in the next 12 months.”

Regan’s piece touches on tariffs, too, which could increase costs further, as well as the large number of promised deportations, which could make labor harder to find and more expensive.

It’s clear that we can’t just sit and wait for conditions to improve. We’ve got to innovate, figuring out new ways of delivering more for less. The needs are too great and the costs are too high to just stick with one fixed model.

Instead, we need models that are scalable, in several different categories:

👉 Middle-market models that wrap around supportive services.
👉 “Active adult” models that focus on lifestyle, wellness and health span.
👉 Community-based models organized around wellness clubs, membership programs and “PACE-like” services.
👉 Models in which our services are delivered into the home.

For the senior housing and care industry to meet the needs of a rapidly growing population of older adults, it has to morph into something beyond just a bricks-and-mortar solution.

The companies that figure out more innovative ways of reaching more people with the services they need — and in ways that they can both access them and afford them — are going to be huge winners in the future. To the extent the industry does not seize this opportunity, outside disruptors and innovators surely will.