Jason Childers of 2Ten Consulting shares his perspective on the future of the senior living industry and thinking beyond building more to building better.
Things are really good.¬† Let’s make them better.
No doubt, it‚Äôs an exciting time for the senior housing industry. America is getting older and senior housing developers and operators are preparing for the growing need. The 75+ population will double between 2020 and 2040. That‚Äôs more than 2,500 people entering the 75+ age cohort every day ‚Äì or even with 10% penetration rates enough to fill a couple average-sized Independent Living or Assisted Living buildings every day for the next 20 years.
I think I remember learning in Econ 101 that all of this growing demand should have a big impact on supply. Well, it is. In fact, new inventory was at a six-year high last quarter and outstripped demand, which caused occupancies to drop. As the industry‚Äôs focus turns from ‚Äúbuild, build, build‚Äù to ‚Äúhey, is that market getting overdeveloped?‚Äù maybe it‚Äôs a good time to start thinking about what‚Äôs next for senior living.
Despite all the new development, we still aren‚Äôt seeing anything that deviates too far from the tried-and-true senior housing communities developed over the last 10 – 15 years. When thinking about their current models, perhaps developers are sticking to the old adage, ‚Äúif it ain‚Äôt broke, don‚Äôt fix it.‚Äù However, what if it has been broken this whole time? What if disinterest in our current product offerings is what keeps 90% of seniors from considering senior housing? How much bigger could our industry be if we could tap into that 90%? How do we create housing options that would appeal to a wider audience?
Sure, given the coming demographic shift, the industry can continue to build the ‚Äúsame old, same old‚Äù communities and be just fine. In fact, it will be great. However, the aging of America is going to have a profound impact on not just our industry, but also our society. A growing number of US cities and the World Health Organization are working to create Age-Friendly programs aimed at meeting the housing, social, transportation, nutrition, fitness, and medical needs of their aging residents. Do those services sound familiar?
There are start-ups from a variety of industries currently working to help meet the needs of seniors over the next 20-30 years. From continuing care at home to Gerontechnology to meal delivery services to Uber-like services for seniors, a whole bunch of really smart people are focused on helping seniors stay in their current homes. This will be an important piece of the larger, aging puzzle for sure. Who is better equipped to provide these services (inside or outside communities) than the senior housing industry?
It‚Äôs time for the senior housing industry to truly innovate. I‚Äôm not talking about building a better community with nicer amenity spaces, prettier granite and shinier stainless-steel appliances, but something truly different. Something that can meet the growing needs of our neighborhoods and appeal to a larger segment of society.
So What‚Äôs Next?
We have seen bits and pieces of it already. Communities on college campuses, multigenerational living, cohousing, and smaller communities in the urban core that benefit from highly accessible neighborhoods have been around, but could be more prevalent. Here are a few examples of innovative communities that I think could make a big impact on seniors and our industry.
One of the comments I have heard over and over from prospects that are reluctant to choose our current communities is, ‚ÄúI don‚Äôt want to live around all those ‚Äòold‚Äô people.‚Äù It sounds a bit callous on the surface, but I think what they are really saying is they will miss the energy and vitality that comes from living in a community of people at various ages and life stages.¬†The concept of multigenerational programming is not new.¬†However, there are still very few concrete examples of great multigenerational programming in action.
The Humanitas ‚Äì ‚ÄúApartments for Life‚Äù community in Rotterdam, Netherlands is a great example of multigenerational living that allows seniors to feel useful and engaged in the community around them while still benefitting from care services and communal living. It‚Äôs a few years old, but here‚Äôs an interesting article on the project.¬† http://www.building.co.uk/care-homes-the-new-way-to-get-old/5050512.article
2.¬†Urban-Core Simplicity and Excitement
When planning and designing communities, builders and operators look to offer many of the services normally found in the surrounding neighborhood inside the community. For example, we offer fitness centers, libraries, salons, restaurants, movie theaters, and coffee shops in our communities. These are great amenities for sure.¬† In the more suburban markets, it wouldn‚Äôt be feasible to build a community without them. In more urban settings, focusing on access to local amenities and walkability could save a great deal of precious real estate and expense. These savings could be passed on to residents to create a more affordable living environment while a community concierge could ensure residents are receiving the services they want and need.
The Stories at Congressional Plaza is a rental community that doesn‚Äôt focus on age, but rather the idea that communities should inspire people of any age and stage to explore ‚Äúwhat‚Äôs next.‚Äù It‚Äôs a supportive community that will rely on the walkability and accessibility of its location and services that support personal well being. To learn more, visit www.thestories.com.
3.¬†It Takes a Village
Over the next 20-30 years, affordability of senior housing is going to be a growing concern. It‚Äôs difficult to develop a community with all the great services amenities we expect in communities and still find a way to make it affordable for the majority of seniors. As mentioned above, you can save some construction expense by relying on the amenities of your surrounding area.
Staffing is another key driver of senior housing expenses. To provide great service, you need great people¬†(and a lot of them).¬†There is a movement that is gaining traction that seeks to minimize ‚Äúpaid‚Äù help by relying on residents and family members to provide assistance.¬†For example, in Village Concept retirement communities, residents who are still able and comfortable behind the wheel or family members can provide transportation services to other residents, residents can prepare group meals or arrange for programs like Meals on Wheels and grandkids may help with landscape services.¬†Other services can be contracted by outside providers on an as needed basis.
The Village Concept has been around for a while. Communities like Beacon Hill Village (www.beaconhillvillage.org) have flourished for years now. Perhaps this model can serve as inspiration for developing new communities that allow seniors to actively participate in their communities. This may be a model that also helps with affordability.
These are just a few examples. There are many more. However, I am most excited about the ideas that haven‚Äôt been fully formed yet. They hold great potential for making an impact on our society and our industry. Here‚Äôs to new ideas, continued innovation, and a growing, improving senior housing industry. Let‚Äôs be better.
About the Author
Jason Childers didn‚Äôt plan on having expertise in the senior living industry. His hopes coming out of UC San Diego in 1999 with a degree in Economics and a minor in Psychology were focused in the advertising world.
In 2002, after several years working on major accounts in strategic planning for Doner Advertising and Foote, Cone and Belding Southern California (now Draft FCB), he landed a position at Leisure Care Retirement Communities on the market research team. Over the course of 11 years, he rose from a member of marketing team to SVP and Partner in the company. During that time, he led the sales and marketing efforts for Leisure Care and built the Five-Star Fun brand that is still used today.
Jason joined Merrill Gardens in 2013 as Senior Vice President to help lead the growth, restructure and rebranding of the 20-year old senior housing company. He oversaw sales and marketing, building and facilities maintenance, information technology, and operations. He helped lead the transformation of the company‚Äôs operating platform by introducing new processes, implementing three new software programs, managing the rebranding of the company, and creating a structure that is leaner and more efficient.
Earlier this year, Jason and Tana Gall started 2Ten Consulting.¬† When he is not busy scouting sites, repositioning acquisitions, and creating efficiencies and key branding strategies, he can be found enjoying the great Pacific NW with his wife and two daughters.