A slowdown in construction starts and inadequate capital investment is not doing much to bring the necessary additional senior housing units this decade, according to a new report from NIC MAP Vision.
Calculations by NIC MAP Vision project the need for an additional 156,000 additional senior housing units by 2025 for those ages 80+, 549,000 additional units by 2028, and 806,000 additional units by 2030.
Last year saw record-low construction starts and currently, only about 40% of the $400 billion investment needed by 2030 is currently on-pace to be fulfilled.
In 2025, the first Baby Boomers will turn 80. NIC said the 80+ population is set to increase by 3.7% in the next year by 12% by 2025, by almost 25% by 2027, and over 40% by 2030.
The report, too, said those who are aging are also proving healthier. Yet, “there is an increase in care and acuity needs. Chronic conditions and age-related ailments necessitate specialized care, and as these needs rise, the traditional support systems will also change.”
As for supply falling short of demand, this would result in seniors having limited housing options and therefore will need to “make unwanted compromises” related to quality or location. The lack of supply also means a bump up in rates.
NIC said that while the industry is moving in the right direction, it is not moving fast enough.
“The required investment to maintain the current market penetration rates is estimated to be over $1 trillion, the majority of which is not estimated to be met,” according to NIC.