By Steve Moran

Recently, a senior living operator posted this graphic that was extracted from the ASHA 2016 market brief. In the graphic, it is estimated that the industry will need to build 100,000 new units per year starting in 2025 through 2040 in order to keep up with demand.

He went on to note that this is the equivalent of building a company almost twice the size of Brookdale every year for 20 years straight.

To provide some context, it is a rosy, optimistic view, and if only it were true . . .

That data is not 5 years old, so I reached out to David Schless, president of ASHA to see if they have updated data. According to their most recent market report, they are still projecting a need for nearly 90,000 new units per year beginning in 2025.


It will never happen.   

I hope I am wrong . . .

But it will never happen. 

Here is why (6 reasons):

  1. For something like greater than 90% of the population, senior living is seen as the choice of last resort. Most people don’t want to move into senior living and will only do so when they believe they have no other option.
  2. Each month we see individuals and organizations talking about new ways to create great living environments for older people. 
  3. As senior living developers/operators continue to build new communities, they mostly get bigger, fancier, and more opulent. It makes senior living less and less affordable.
  4. The labor crisis is at a critical point, but it is sure to cause labor costs to increase faster than rates can be raised.
  5. The government is deeply invested in keeping people at home. There is a perception that senior living is more expensive and provides a lower quality of life (both are propositions I disagree with).
  6. As an industry we actually spend very little time selling the thing that has the most value, living in a community. There is so much research that says when older people live “in community” they live longer, healthier lives, and we rarely talk about this.

Great Danger

Believing that demand will soon outstrip supply is so dangerous for the senior living industry. It suggests that we don’t need to evolve; that we do not need to get creative to increase demand. Six or seven years ago, there was this frenzy of excitement about memory care. There was a general belief that the need was so great it would be impossible to build enough memory care communities to meet the needs.

Everyone got on the bandwagon building new locked communities. Then one day there was this sudden “OH CR#$” moment where we realized there were too many memory care units. There were a number of companies that went out of business and others that came close to folding.

Great Opportunity

Strong demand and rethinking how we do senior living is our greatest opportunity right now. We need to get away from the mindset that bigger, nicer buildings are the way to go. That we will make ourselves more attractive by having more and better menu choices.

What will work is creating an environment where older people will thrive and grow, will have purpose, make new friends, and have meaningful moments.

That is our opportunity.