Here’s what happened last month in senior living.
The U.S. Department of Housing and Urban Development (HUD) introduced changes to their healthcare mortgage program that will make it easier for senior living buyers to access financing. The program provides assistance with:
- financing purchases
- new construction
- substantial rehabilitation
The revisions may also eliminate waiting and seasoning periods in certain circumstances. For example, a qualified borrower may bypass the two-year waiting period for a bridge loan. Deals that include solid partner buy-out scenarios may forgo the typical two-year seasoning period. Analysts say this could present a tremendous opportunity for growth in senior housing.
Source: Senior Housing News. New HUD Financing Proposal Offers ‘Tremendous Opportunity’ for Senior Housing.
According to a recent report from Zeigler-Greystone, 41% more senior living nonprofit executives indicate that they are optimistic about the market than last year. Of the 23 organizations surveyed, 20 described the real estate market as “strong” or “excellent,” and only three were skeptical about market health.
This hopefulness comes despite significant threats to revenue, including decreased insurance reimbursements, increased operational costs, and competition from for-profit companies.
Source: Senior Housing News. Senior Living Nonprofits Remain Bullish Despite Looming Threats.
The results from the most recent Cost of Care survey indicate that the average cost of assisted living nationwide has risen just over 2% in the past five years. However, some states have seen much higher increases. Nebraska, North Dakota, Vermont, and Washington, DC, have all seen prices rise by over 4% over the same time period.
In-care home health costs have risen even more dramatically. Costs for in-home domestic duties have increased, on average, by as much as 11% in the past five years and continue to snowball.
Source: Senior Housing News. Places Hit Hardest by Higher Assisted Living Costs; Argentum. Study: Cost of Assisted Living Shows Low 5-Year Annual Growth.
New survey data from the University of Chicago indicates that 77% of adults over 40 would prefer to age at home. Only 11% of respondents said they would choose a senior living community.
This report also illustrates that older adults prefer family as caretakers, though those surveyed also recognized the amount of stress family care often creates. The data supports a continuing trend towards aging in place.
Source: Senior Housing News. Home Care Wallops Senior Living Communities in Consumer Appeal.
The Department of Labor doubled the salary threshold of employees who must receive mandatory overtime. The so-called "white collar" rule raises the earnings threshold to $47,476. Employers must pay time-and-a-half to all employees below this pay grade.
This change will likely impact the senior living industry. Executives are already working to reorganize and reevaluate to avoid increased labor costs.
Source: Argentum. Labor Department Finalizes ‘White Collar’ Rule.