You know the good times are rolling again for senior housing developers when cutthroat competition for land – and even the threat of ramped up regulation – is greeted by some of the industry’s top players with a smile and a shrug.

The steadily greying Bay State is fast becoming a mecca for developers of assisted living and other housing catering to the state’s burgeoning over-65 population, with the number of new projects outpacing even the last boom period back in 2004.

That was the upbeat mood of a panel discussion I chaired last week featuring senior housing developers and officials last week. The panel included Tom Grape, chairman of Benchmark Senior Living, and Peter Mullin, co-founder of Senior Living Residences, two fast-growing local developers, as well Emily Meyer, president of the Massachusetts Assisted Living Facilities Association (Mass-ALFA), and Tony Papantonis, president of Nauset Construction Corp.

Not even discussion of plans by state officials to more carefully scrutinize the fast-growing assisted living sector was enough to elicit the typical moans and groans that come from most business people when the dreaded two words “increased regulation” are uttered.

That doesn’t mean developers aren’t aware of the challenges out there, from apartment and condo developers who are bidding up land prices to new technology that promises to make it easier for aging Baby Boomers to stay at home in their golden years.

“We are regularly outbid,” noted Grape of the competition with residential developers for choice building sites.

Five-Star Senior Living

Surging home prices and increasingly favorable demographics are driving the boom, with new senior developments taking shape across the state, mostly in the suburban corridor between the 128 and 495 beltways, the execs noted.

Fifteen new senior housing developments have opened across the state over the past few years, compared to the dozen that were built back during the industry’s last boom period in the mid-2000s, noted Meyer’s Mass-ALFA. Four new projects are set to open this year alone, she said.

Like the mid-2000s, home prices are on a roll again, enabling seniors to sell homes and tap into years of equity that then can be used to finance a move into independent living or assisted care.

Benchmark’s Grape bought a struggling assisted living complex in Lincoln last year and is moving ahead with plans to build a new 87-unit project in Woburn.

The industry has also expanded to the point where it is chasing different market segments. In a bid to attract the most affluent seniors, some developers are taking a cue from upscale condo/hotel projects to create a luxurious environment.

“When you walk into the facility, it is very similar to a five-star hotel,” said Papantonis of some of the newer, more upscale senior living residences. Others, like Senior Living’s Mullin, are focusing on attracting more middle-income seniors who have been priced out of the market until now.

Overall, developers are targeting relatively small areas with their new projects, with years of experience and data showing that most of the demand for any new development will come from seniors living within a five- to seven-mile radius.

A Largely Unregulated Industry

But the boom times are also fueling some challenges for the industry.

For starters, the rapid expansion has caught the eye of state regulators, with a recent report in the Boston Globe highlighting cases of neglect and questionable decisions by staff at a few facilities.

As it stands now, oversight of the industry is fairly light, with federal regulators a nonfactor, since Medicaid and Medicare won’t foot the bill for assisted living. The state has some limited powers of supervision, with the Executive Office of Elder Affairs looking to add staff and beef up its oversight to keep pace with the rapid growth of senior housing.

Instead of battling tooth and nail against the move, Meyer and Mass-ALFA are taking a soft-sell approach, meeting with state officials to help shape the new effort. We’ll see how that works, but sometimes diplomacy works better than screaming and yelling.

However, a much bigger challenge to the continued expansion of the senior housing sector comes from competition from other developers. With home and condo prices soaring and rents relentlessly rising, residential developers are back in the game, scouting out potential building sites. And they have the ability to pay much, much more for land – in some cases three times what a senior housing developer could offer.

The combo of scarce building sites and crazy prices have made it difficult, if not impossible, for senior housing developers to penetrate the inside 128 market, including Cambridge and Boston. But developers like Grape and Mullin have been at this game for a couple of decades, and they know markets come and go. And when real estate prices level off again in red-hot Cambridge and Boston, senior housing developers may get another shot at breaking into that largely untapped market.

Certainly time is on their side – Massachusetts is  one of the most rapidly greying states in the country, with an average age of nearly 40 and with a big decline over the 2000s in residents under 45.

After all, if there is one thing that’s for certain, Massachusetts is not getting any younger.

Email: sbvanvoorhis@hotmail.com