What are the biggest barriers to affordable seniors housing?
Lately, this issue has received considerable discussion and some debate. For my money, two challenges rise above the rest. One is labor costs. The other is construction-related expenses.
Until one, or preferably both, of those Gordian knots is undone, affordable senior living on a large scale is unlikely.
There also seems to be some ambiguity surrounding what affordable senior living means. I view it as senior living in the context of what a typical American likely could afford. Not affordable in the sense of the vastly inflated number that some developers seem to consider reasonable. For context here, consider: The median household income in the United States is less than $70,000 each year. And a relatively small portion of that total (30%?) would presumably be available to pay for senior living housing. That is, assuming residents also will do things such as eat, pay taxes, occasionally purchase clothing and have some other incidental expenses.
Fortunately, there are promising signs on both fronts.
Regarding the labor challenge, we can thank technology-related advances for making staff more efficient and in some cases, less necessary. I also happen to believe that going forward, robotics will be a game changer.
Which brings us to the second hurdle. As it happens, my colleague Amy Novotney recently wrote about an exciting development here: modified shipping containers.
Before you laugh this option off, consider: Modified shipping containers are structurally sound, waterproof and fireproof. They also can stand up to natural disasters.
According to Dreien Opportunity Partners CEO Sam Ware, they provide great value for developers. He said he has seen bids for finishing out a single container with one bedroom, one bathroom, a kitchen and a living room in the $15,000 to $35,000 range. When is the last time senior living saw numbers in that ballpark?
Builders also note that shipping containers — which come in both 20- and 40-foot lengths — are relatively easy to move and stack. That can come in handy when odd-size land parcels are in play.
Are ship containers the answer to more affordable senior living? Of course not. But there is no reason why they can’t be one of the solutions.