According to Census data, about 10,000 people living in the U.S. turn 65 every day, while the life expectancy for these folks continues to increase. The U.S. seeing its largest-ever per-capita population of seniors is great news: we are living longer, healthier lives than at any point in our history. However, the data also suggests a present crisis of senior housing availability. Growth of demand for assisted living options, especially for seniors in low to moderate income brackets, outpaces new supply.
State-level restrictions on use of Medicaid funds are steering many relatively independent seniors who require some help with activities of daily living – for whom assisted living facilities (ALFs) are ideal – often wind up in congregate settings like nursing homes, which are much more restrictive than they need, and more expensive. A recent cost-of-care survey indicates a median annual assisted living cost of roughly $74,000, about 35 percent lower than the cost of a semi-private nursing home room. But that cost is still too high for many seniors and their families.
We are already faced with a growing shortfall of affordable assisted living units, including here in Massachusetts. We urgently need to spur the development of affordable ALFs, immediately. Lawmakers here at home and in Washington must act to address this crisis.
Potential for Development
Senior care represents a significant and lucrative sector of economic activity and growth. Designed for residents who are able to live largely independently but requiring some help with daily living, ALFs represent a net positive in every metric. As of 2020 in Massachusetts alone, 272 ALFs providing 18,784 units or beds employed about 9,000 people while creating nearly $2 billion in total economic impact – and generating $55 million in annual tax revenue to the state, $218 million to the federal government.
The numbers of senior communities and ALFs are projected to grow nationally by about 2.6 percent yearly through at least 2030. In that time, the 75-plus population is expected to grow each year by about 3 percent, and by 5 percent for the 85-plus cohort. In other words, without action to promote development of ALFs, the gap between available assisted living units and demand for them will widen, and individual care costs will rise instead of fall. Spurring development of affordable assisted living would be a boon to many lower-income seniors and their families, while addressing the supply gap and realizing untapped economic potential.
As an architecture firm that regularly performs design and master planning for ALFs, we have seen how legislative efforts promote investment in this sector. As an example, Evergreen Village in Bloomington, Indiana was conceived to serve Medicaid-eligible seniors who earn less than 60 percent of the area’s median income, and who now occupy 115 studio and one-bedroom homes in a complex that fosters independence and socialization.
Meeting the Moment
Right now, our elected leaders must address these affordability and investment gaps. Here at home, Massachusetts legislators can redouble efforts to pass “An Act Relative to Assisted Living and the Frail Elder Waiver” (H.791/S.474) which was introduced in the state House two years ago, has languished in committee review, and which when signed into law would direct MassHealth to implement an assisted living alternative capped at 80 percent of the average cost of nursing home care.
Many other states have similar legislation already in place, helping to address the issue of demand outstripping supply by directing subsidies to improve the pro forma for developing and owning ALFs that can serve seniors with a range of income levels. Whether the delay is due to the congregate setting (nursing home) lobby as some advocates suggest or for other reasons of politics, it is urgent that Medicaid funds be allowed to support development of new ALFs in the Bay State.
On the federal level, lawmakers should look to expand low-income housing tax credits to apply to the broadest possible range of housing types, including ALFs, and to as many development approaches as possible. Whether new ground-up construction, or adaptive reuse of existing structures, opportunities abound for creating senior care communities of all kinds. Ensuring that tax credits tied to affordable housing applies to senior settings will increase the number of affordable assisted living units available as new communities open their doors.
Finally, lawmakers at every level should back efforts to promote training programs, so that growth of physical capacity is matched by adequate growth in pools of skilled labor, an essential component in the calculations of owners and developers considering investing in an ALF.
Ultimately our leaders need to lead. The moment to address this crisis is not coming – it’s here now.
Anthony Vivirito is senior associate at The Architectural Team.
