Staffing and inflationary pressures combined with occupancy challenges are driving monthly resident fees for not-for-profit independent living communities to historic highs, according to specialty investment bank Ziegler.
A March CFO Hotline survey of 230 not-for-profit senior living chief financial officers and financial professionals found that the overall average monthly fee increase for independent living is 4.43%, up from 2.98% in 2021. The fee increase also is higher than last year’s predicted average increase of 3.71%.
The median monthly fee increase of 4% compares with a consistent 3% increase that has been reported each year since 2013.
Operators in the West reported the highest average increases, at 5.66%, followed by operators in the Midwest, at 4.45%, the South, at 4.40%, and the Northeast, at 4%.
Equity contracts produced the highest monthly fee increases, at 4.93%, followed by rental contracts at 4.54% and Type A contracts at 4.5%.
Respondents said that the historically high fees were necessary to ensure financial stability in the face of staffing and inflationary pressures, wage increases, expense increases, occupancy challenges and increased agency costs.
Several respondents also indicated that they are considering additional mid-year increases to compensate for those budgetary pressures.
Ziegler launches a CFO Hotline poll each fall focused on resident monthly fee increases. The specialty investment banker re-surveyed CFOs this month to assess current industry trends, given escalating costs and inflationary pressures facing senior living operators.
Value proposition
Despite the skyrocketing costs, the majority of senior living (independent and assisted living) residents — two out of three — said they are satisfied with the value of their communities, according to Activated Insights, which oversees data collection for Great Place to Work and Fortune magazine.
According to the Activated Insights survey, 47% of assisted living residents and 46% of independent living residents agreed with the statement that they are satisfied with the value they receive for what they pay. And nearly 90% of residents said the community is good, very good or excellent.
Family members also said they favor the communities where their loved ones reside, with 83% to 89% indicating that those communities are good or better.
Activated Insights surveyed 483,644 residents and family members in the last 12 months, with the majority surveyed between October and January.
