Capital availability is “tough,” land remains expensive, material availability is volatile, and finding labor is challenging, said Joe Daniels, Direct Supply vice president of business development. But if the industry doesn’t figure out a way to get new units into the market more quickly, someone else will, he added.
Daniels was part of a panel of experts who, during a session on the last day of the National Investment Center for Seniors Housing & Care’s 2025 Fall Conference in Austin, TX, discussed the state of the construction environment, innovations in designs and construction methods, and strategies to gain support for projects.
The speakers pointed out that demand for new senior living units has never been higher as the nation faces the most significant demographic wave in its history. But with construction activity at historic lows, the industry is challenged to provide housing to meet demand, they said.
“I think we should all treat it very carefully as a warning across our sector,” Daniels said. “If we, as an industry, don’t find new ways to design, build and gain support for new units in our space, the void will absolutely be filled. It just might be filled by players who don’t necessarily understand the complexities of care that we all deal with, that are building for-profit without purpose, and so forth.
Now is the time for the industry to stand up and lead the way, he said, adding that conventional financing and legacy construction practices aren’t going to help the industry scale to what it needs to do going forward.
Panelist Ken Simonsin, chief economist for the Associated General Contractors of America, said that until last month, the construction field still was adding jobs at a faster rate than other areas of the non-farm economy.
But rising construction costs, tariffs, “harsh” immigration enforcement practices and high interest rates are having an impact, he said.
In an AGC survey on how the construction industry is being affected by the current political climate, 38% said that it already is being affected directly or indirectly by immigration enforcement actions, Simonsin said. Additionally, 20% of responding subcontractors said they lost workers due to immigration enforcement, and 10% said that workers failed to show up or left for fear of Immigration and Customs Enforcement raids. All of those factors are feeding into barriers to bring senior living construction projects to fruition, he said.
Opportunities exist
But the panelists offered examples of how they are addressing the shortage of senior living units and building to attract prospective residents.
Chris Krager, founder and principal with developer, designer and builder KRDB, said that Kindred is filling a specific niche in the housing community for baby boomers with different attitudes and expectations about their final chapter compared with previous generations.
With its small-format cottage model, he said, Kindred’s communities have a smaller footprint than traditional senior living communities and can plug into areas where other projects may not fit. Although the company doesn’t position itself as affordable housing, its rents make it more attainable for a broader cross-section of older adults, Krager said.
Kindred, he said, has evolved from the traditional, gated enclave retirement community to flexible communities that can insert themselves into existing greater communities that are in or near urban communities.
“Our model is to integrate, not isolate,” he said. “Our target market wants integration, to be part of a vital, existing community.”
The key concept at Kindred is small, modular unit sizes based on broader acceptance of tiny homes and downsizing, Krager said. But, he added, residents “live much bigger” than the square footage of their units suggests, with open spaces, tall ceilings and lots of natural light. The model, he said, contrasts with the typical 55+ “cruise ships on land with amenity after amenity.”
“With Kindred, we wanted to provide more provisional programming,” he said. “We felt we didn’t want to predetermine what the personality of the community would be or what folks would want. That programming will happen organically over time.”
Stuart Jackson, executive vice president of Irving, TX-based Greystone Communities, said that his company is discovering that an increasing number of older adults have more economic resources than previously thought. And early boomers are looking for service-rich, choice-filled, wellness-focused, self-directed options, he added.
Jackson said that projects have declined in size, but square footage of all units has increased. That reality is leading to more independent living units and less healthcare in communities. The average unit size of 10 to 15 years ago in independent living was 1,050 square feet. Today, he said, a typical independent living unit is 1,325 square feet.
“I think there’s a massive opportunity to grab that segment of the population and pull them into communities that offer something different than what’s been offered previously,” Krager said.
link