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15 Problems with Over 55 Communities

This article takes a look at the 15 problems with over 55 communities. If you wish to skip our detailed analysis on senior housing, you may go to 5 Problems with Over 55 Communities.

Senior Housing: Insights and Challenges Ahead

Senior housing occupancy rates are on the rise, reveals data from the NIC MAP Vision released by the National Investment Center for Seniors Housing & Care (NIC). This senior housing occupancy rate increased from 83.6% in Q2, 2023 to 84.4% in Q3,2023. Meanwhile, the occupancy rate has witnessed an overall increase of 6.6 percentage points from a pandemic low of 77.8% in Q2, 2021. Finally, Q4, 2023 has represented the tenth consecutive quarter of occupancy gains. Such has been the recovery and growth in occupancy rates that the NIC has anticipated senior housing occupancy recovery to reach pre-pandemic levels in the second half of 2024. Given the rate at which baby boomers are retiring and the Peak 65 period of 2024, such statistics merely reaffirm what is already evident.

Of the prominent gains in the senior housing communities, one is experienced by Brookdale Senior Living Inc. (NYSE:BKD), one of the largest senior living companies in the USA. In its consolidated occupancy report for February 2024, Brookdale Senior Living Inc. (NYSE:BKD) reveals that the weighted average occupancy increased by 160 basis points year-over-year to 77.9% in 2024. Such are the achievements of this company that US News & World Report has recognized Brookdale with the most communities that are “Best of” for three consecutive years.

“Achieving this recognition three years in a row is a testament to our associates’ dedication to enrich the lives of those we serve with compassion, respect, excellence, and integrity. We remain steadfast in our commitment to providing our residents compassionate and high-quality individualized care and services”.

– Brookdale Senior Living Inc. (NYSE:BKD) CEO Cindy Baier.

The occupancy gains and growing demand for senior living arrangements underscore another necessity for the senior living community: the urgency for additional senior housing. However, two factors are proving to be major bottlenecks in bringing the necessary additional senior housing units this decade, namely, inadequate capital investment and a slowdown in construction starts. According to NIC, year-over-year inventory growth in Q3,2023 was only 1.3%. This slow inventory growth, coupled with factors such as an aging population, economic uncertainty, and growing income inequality is keeping the demand high for affordable senior housing options.

As such, there are many advantages of living in a 55-plus community. For instance, Senior Housing News reports living in communal senior housing to be associated with greater longevity as compared to people living in the community. Here is the main takeaway from the research conducted by NORC at the University of Chicago, funded by the NIC:

“Our main takeaways include that senior housing residents experienced greater longevity than the non-congregate comparison group in the first two years following moving overall and across all property types”.

-Dianne Munevar, vice president of health care strategy at NORC.

The research analyzed both groups in two years, revealing that senior housing residents had a mortality rate of 20.1%, while those in the comparison group had a mortality rate of 22.4%.

“The mortality is two percentage points lower than in the community … it’s not 2%, it is two percentage points. So that’s quite a bit more, or quite a bit better. They live about 10 days longer than in the community.”

-Dianne Munevar

Besides the apparent advantage of living longer, some other advantages that the research findings revealed include that senior housing residents received more rehab and preventive days, more home health care days, and even spent fewer days on antipsychotic medications versus the comparison group.

Another advantage of such communities is they are reasonably affordable, which brings us to the question: why are 55+ communities cheaper? Sinceri Senior Living reveals how senior housing tends to be cheaper because of streamlined property maintenance. Maintenance expenses are usually part of rent and tend to be cheaper because one, you live in a smaller property, and two, many residents live together which grants economies of scale. Also, included meal plans and potentially low costs of care are two more reasons a 55+ community may turn out to be cheaper than living elsewhere.

However, it isn’t all a bed of roses when a senior goes to live in a senior living community. There are many problems one must be aware of. Let’s check out all the problems with over 55 communities:

Exterior of a luxurious senior living complex, capturing the high quality of life offered by the company.

Methodology

To compile the list of problems with over 55 Communities, we used a consensus approach by using prominent sources such as MoneyWise, Mass Mutual, Home Selling with Randy, and retiree opinions on what they think are the biggest problems with over 55 communities. Each problem was given a point each time it was recommended by a source. Scores were added and problems were ranked in an ascending order from the lowest to the highest scores.

By the way, Insider Monkey is an investing website that tracks the movements of corporate insiders and hedge funds. By using a similar consensus approach, we identify the best stock picks of more than 900 hedge funds investing in US stocks. The top 10 consensus stock picks of hedge funds outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). Whether you are a beginner investor or a professional one looking for the best stocks to buy, you can benefit from the wisdom of hedge funds and corporate insiders.

Here are 15 problems with over 55 communities:

15. Health Challenges and Mortality

Insider Monkey Score: 3

The one heartbreak you can never get over is when you make friends, but they eventually get sick and leave you forever. This is the most common issue highlighted by those living in over 55 communities, and it’s not even in their hands, or the management’s. It can be very difficult when someone you know has deteriorating health, and it can eventually impact your happiness and outlook on life. Everyone is 55 or over, so typically everyone is aging and getting sick more often than they did in their younger years.

14. Over 55 Communities Can Be Expensive

Insider Monkey Score: 6

The next problem with over 55 communities is that they can be pretty expensive. Since seniors are on fixed incomes once they retire, they are usually on the lookout for living situations and places that can help them lower their cost of living. However, that’s not always the case with over 55 communities. Activities, amenities, and maintenance are going to cost you, and are covered in what is called the Home Owner’s Association Fees. Regardless of whether you choose to avail the services or not, you’d have to pay for them. Moreover, these fees increase every year due to inflation. According to A Place for Mom, the national median monthly cost for independent living in a retirement community is $3,000.

13. Smaller Homes

Insider Monkey Score: 7

Homes in over 55 communities are smaller and are usually meant for two adults. Moving into a smaller home can be another problem when moving into an over-55 community. You may have bigger possessions, furniture, and other belongings that you may have to give up on when moving into your new home.

12. Strict Rules and Regulations

Insider Monkey Score: 9

The Home Owners Association has a set of rules and regulations that one needs to follow when living in a senior community. The first one is, of course, the age restriction. However, that isn’t all. Some regulations extend to the exterior aesthetics of your residence, dictating guidelines for decorations and other determinations concerning guests’ accommodations and duration of stay.

11. Remote Location

Insider Monkey Score: 11

The ideal retirement communities come with large swimming pools, golf courses, and even expansive neighborhoods. While that is all fun and exciting, drawing up a space for all this means there is a large chance that your community is in a remote location. This is why it’s important to see how far you are from important amenities such as healthcare when choosing a 55+ community for yourself.

10. Lack of Age Diversity

Insider Monkey Score: 12

Everyone in an over-55 community is going to be 55 and above. While this means there is a higher chance of connecting with like-minded individuals, it also means that there is a lack of age diversity. Seniors may enjoy connecting with other age groups as well, which is something that they will miss out on when they choose to live in a senior community.

9. Limited Transportation Options

Insider Monkey Score: 14

Next on our list of problems with over 55 communities is that there are limited transportation options for seniors in 55+ communities. This in turn impacts their ability to access medical care and essential amenities, and even face isolation in the process.

8. Restrictions on Visitors

Insider Monkey Score: 15

Many 55+ communities also have a restriction on visitors. Anything and everything from how long a visitor can stay to how often they can visit can be serious problems for seniors. This is especially true when you have grand kids. This is also a downside if you are someone who loves large gatherings and wouldn’t mind them from time to time. Therefore, it is best to address such concerns before buying a home in any community.

7. Difficult Resale

Insider Monkey Score: 17

Next on our list of problems with over 55 communities is the difficulty in resale. Since there is a limited market available to buy these homes, getting them to sell can be a huge task. Why is the market limited? Well, simply because there is a 55 and above age restriction for members who can buy homes in such a community.

6. Staffing Problems

Insider Monkey Score: 19

Even though the pandemic is long over, nursing homes, assisted living, and over 55 communities continue to suffer from a staffing crisis. According to National Center for Assisted Living, 90% of assisted living providers say that one of the biggest obstacles in hiring new staff is that there is a lack of interested or qualified candidates. Such is the case of staffing shortages that 98% of them have asked their staff to work extra shifts or overtime to help with the shortage.

Click to continue reading and see the 5 Problems with Over 55 Communities.

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Disclosure: none. 15 Problems with Over 55 Communities is originally published on Insider Monkey.

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