A labor shortage is necessitating longer amounts of time to complete long-term care construction projects, and labor costs are rising due to annual hourly increases, overtime and labor risk, Larry Graeve and Amy Burk of The Weitz Company write in a new issue brief for the American Seniors Housing Association.
Overall, however, the long-term care construction market “remains steady,” they said. Tariff issues have “settled down” for now, according to the brief. Construction prices continue to inch upward, although a recession may be looming, Graeve and Burk said.
The per-square-foot cost of construction in winter 2020 in independent living has averaged $168 to $255 per gross square foot, depending on materials and finishes used, according to the brief. Costs in assisted living, meanwhile, have averaged $194 to $309 per gross square foot, and costs in skilled nursing have averaged $223 to $361 per gross square foot.
The calculations, based on an index of 100 cities, include general conditions, insurance, tax, bond and fee but not site construction costs.