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The Impact of the Election on Senior Housing

While there is still a lot up in the air regarding the results of the presidential election, several important initiatives passed at the state level that senior housing officials should be aware of. In numerous states throughout the country, there were initiatives on the ballot that carry the possibility of completely shaking up the senior housing industry. Many of these ballot points aimed to offer more support for the senior housing industry and long-term care facilities in general.

As with any new law or regulation, the implementation process can be a little tricky. Depending on the issue in question, many can feel uneasy about what is to come, no matter how beneficial it will be in the long run. This is why it is important to create an open forum for SNFs to discuss any new initiatives and ensure that everyone involved has a good understanding of what the potential regulation entails. With this in mind, some senior housing officials have taken it upon themselves to track the impact of new state legislatures. Some topics of industry interest in this year’s election included:

  • End-of-life issues
  • Medical marijuana
  • Minimum wage

All of these topics – and many others – have the potential to dramatically impact the senior housing industry. It is therefore important that those working in senior housing keep a watchful eye on various ballot measures – in both their state and others. With Colorado passing its assisted suicide bill this year, for example, we expect more states to follow.

What Changes Were Made?

In addition to big changes in Colorado with the “right to die” bill passing, a handful of other states passed legislation that those in senior housing should be aware of. Florida was successful (for two years in a row) in passing important laws related to continuing care communities. The state also elected several new officials who are interested in new construction and demographics in senior housing, which could impact future development plans.

Along with North Dakota and Arkansas, Florida also legalized medical marijuana on November 8th. California, Maine, Massachusetts, and Nevada all voted to legalize recreational marijuana, joining Colorado, Washington, Oregon, and Alaska. Both of this measures have the possibility of impacting senior living facilities, leaving it to the long-term communities to figure out how they would like to tackle marijuana treatment.

Colorado (as well as four other states) also voted to increase minimum wage, something that will undoubtedly impact the senior living industry.

On the national level, we are still unsure what is to come of the Affordable Care Act (ACA). We do, however, expect Medicaid providers to see changes in regards to reimbursement, but whether this will have a negative or positive affect on senior housing is yet to be seen.

Do you work in senior housing and have any input on how this election has impacted the industry? If so, we would love to hear from you.

Understanding the Evolving Senior Healthcare Model

At the recent NIC Spring Investment Forum there was a lot of talk surrounding the changing senior healthcare model, and what kind of an impact it will have on investors and those within the industry in general. One of the highlights of the forum was an open discussion amongst industry leaders about how the industry is changing, and what we are going to do about it. As anyone in the senior housing industry knows, things aren’t how they used to be when it comes to Skilled Nursing Facilities (SNF). As Baby Boomers enter into retirement, the overall landscape of senior care and their expectations will undoubtedly change. So, what does this mean for senior housing?

First, let’s go over a few of the main talking points from the NIC Spring Investment Forum on this subject:

  • The median age of nursing home residents is increasing
  • Residents have a higher level of acuity than ever before
  • Medicaid and Medicare will continue to play a role
  • Instead of a cost/benefit model, we are shifting towards a nonmedical “quality of life versus quality of care”
  • Quality and measures are at the center of this new model
  • SNFs need to shift their focus and work to provide more social and emotional resources for residents

These are just a handful of the topics that were discussed during that open forum, but they are all important when looking at the changing landscape of senior living. With those points in mind, let’s take a closer look at a few trends we are seeing in senior living today:

More and more people are looking to “age in place”

We expect to see continuing care retirement communities (CCRCs) become even more attractive to Baby Boomers and the likes in the coming years. This is due in large part to the fact that CCRC’s provide a high level of continuum care with a variety of options for residents, such as independent living, assisted living, and more.

Access to technology will be a must

While Baby Boomers are not as high-tech as the generations to follow, a large majority of them have turned to the dark side and have iPads, iPhones, laptops, tablets, and everything in-between. Because of this, SNFs will need to adjust accordingly. Furthermore, the wearable tech market for seniors is about to take off, which should also be a consideration for those in senior housing.

Senior co-housing will be a thing

The trend of today to “go green” will transfer over to senior housing, too, as many older Americans will find co-housing options attractive. Think of it as a cross between single-family homes and communal living arrangements, if you will.

Senior housing will “go green”

Along the same lines as the above point, we expect to see a trend of assisted living facilities “go green”, or adopt more eco-friendly practices, such as:

  • Improve indoor air quality
  • Make changes in an effort to meet water conservation measures
  • Weatherize buildings
  • Switch to renewable energy sources

We expect big things from 2016 in senior housing as Baby Boomers continue to enter into their retirement years and make waves in assisted living. For more information on topics discussed at the NIC Spring Investment Forum, or to discuss senior housing investment in general, please do not hesitate to contact the JCH Senior Housing Group.

How the Lack of SNF Construction in 2016 Will Impact the Industry

According to a recent report from Integra Realty Resources (IRR), a successful real estate consulting firm, construction will be slow in the world of senior housing throughout the remainder of 2016. In the report, the firm indicates that skilled nursing facility (SNF) development will be “minimal” and that the facilities that are newly erected will likely focus on short-term, post-acute rehabilitation services. This should come as no surprise to those within the industry, as we are seeing more and more facilities close their doors and eventually reopen under new ownership. It is no secret that many existing SNFs have struggled over the last decade. Whether due to the recession or some other factor, we have seen numerous facilities file bankruptcy. So, what does this mean for senior housing – more specifically those interesting in investing in an SNF?

Depending on where you stand, the lack of SNF construction is viewed as a positive. As we continue to see troubled, older facilities close their doors, we expect to see a trend of interested investors swooping in and capitalizing on the situation. Under new ownership, many SNFs are able to get back on their feet and provide residents with high quality services. While we may not be seeing very much new construction in senior housing, the following is taking place:

  • More than 7,000 SNFs were under construction throughout the United States as of the third quarter of 2015
  • During the same quarter of 2014, only 3,600 were under construction

These numbers show that more and more facilities are being bought and renovated, instead of brand new nursing homes being constructed. In many instances, the older facilities are simply in need of an overhaul and specific interior renovations.

When looking at the impact this will have on the senior housing market, it is important to take all factors into consideration. We are not in need of new SNFs, we simply need to focus on how to make existing facilities better and more efficient. Again according to a survey conducted by IRR earlier this year, people in general are optimistic about the nursing home market. In fact, 39% of those surveyed believe the senior housing market has yet to reach its high point. This is yet another great sign for those thinking about getting into the industry and investing in a troubled nursing home or assisted living facility. 2016 will continue to be a year of transition and change for the senior housing industry, and that’s not a bad thing.

If investing in senior housing is something that is of interest to you, we encourage you to contact us. Shep Roylance and the entire JCH Senior Housing Group team have years of experience facilitating senior housing transactions and we would be happy to discuss your options with you today.