By Jack Cumming
Donald Trump is proud of his prowess as a real estate developer. Elon Musk takes pride in operating companies that are hugely successful. Andrew Carnegie made his most distinguishing mark by funding public libraries.
The Nature of Senior Housing
What these activities have in common is that they all involve money. So does senior housing. This brings us to the question: Is senior housing a good cause, like libraries, an operating business to harbor oldsters, or an opportunity for developers to profit from real estate? The quick answer, of course, is that senior housing is all of these.
These distinctions came to mind recently when listening to an encounter in the Oval Office. Mark Carney, Canada’s Prime Minister, was Donald Trump’s guest, and the occasion was a press conference. The President wanted to be sure that Prime Minister Carney and the assembled press understood what a deal it would be for the United States to have Canada.
A Developer’s Outlook
Eight minutes into the conversation, the President reflected on his view:
“There would be a lot of advantages, but it would be a massive tax cut. And it’s also a beautiful …. You know as a real estate developer …. You know I’m a real estate developer at heart. When you get rid of that artificially drawn line. Somebody drew that line many years ago with … like … a ruler, just a straight line right across the top of the country.
“When you look at that beautiful formation when it’s together …. I’m a very artistic person. But, when I looked at that beautiful ,… I said that’s the way it was meant to be. But, you know …. I just do feel it’s much better for Canada.”
That’s a developer’s view. A developer looks at a CCRC surrounded by parking and open space and may think, “That’s a beautiful community. It could be so much better if we just expanded into all the vacant land.” Is the developer thinking of the people or of the opportunity to make money developing the property and turning it over to the operator?
Financing Development
That brings us to later in the Oval Office conversation when the President speaks of industrial development in the U.S., spurred by tariff avoidance. 24 minutes into the 33-minute press conference, he says:
“Look they’re already starting AI plants. These are not people that look for financing. That’s a good thing. You know in real estate you get a site then you have to look for financing. You have to get your zoning. You know five years later you start building. You get a bank. Then the bank’s no good.”
Beyond Development
This Oval Office soliloquy led me to reflect on senior housing. Developer thinking is big in the capital-intensive senior housing industry. There are opportunities for greenfield development, refurbishment, repurposing existing properties, or expansion in the hope of growth.
While development and the developer mentality, to which President Trump drew attention, are important, senior housing matters more for what happens afterwards. That’s when the living begins. We can question whether that is primarily driven by operating efficiencies like those we associate with Elon Musk or by positive intentions for the welfare of those served, like those Carnegie libraries. Senior housing operators’ discernible values and good faith vary widely from enterprise to enterprise.
Sound Living
A sound approach to a market and human opportunity calls for a balanced approach to all three interwoven viewpoints. Developers and money providers are motivated primarily by profit. Customers are looking for value, reliability, and integrity. Operators are expected to balance these conflicting pressures, but top officers often lean one way or another.
Profit is essential. Unless a business is able to cover its costs, it can’t endure. But, more important is how well the business addresses the needs of those it serves. That requires high integrity, a commitment to lean operation, and in senior living, empowerment of residents. Residents are the reason the business exists.
