Occupancy in senior housing has hit a 15-year low with families bringing loved ones home, and some centers either limiting new residents or being unable to attract them given the threat to older Americans from the Covid-19 pandemic.

Since 2008, the number of assisted living facilities and independent living centers have seen unrelenting growth, jumping 33% to more than 8,000 nationally. But Covid-19 has added a puzzling new twist for the industry and consumers. Occupancy slid 2.8 percentage points to 84.9% in the second quarter, the largest quarterly drop and the lowest rate since the National Investment Center for Seniors Housing & Care began tracking the data in 2005.

Susan Ridge, who lives in Baltimore, moved her 87-year-old mother into an independent living facility in 2018 so she could easily socialize with others in her age group. Now, she’s debating moving her out.

The Covid-19 pandemic forced that facility, like other centers nationwide, to close their doors to visitors, cancel activities and quarantine residents in their apartments.

The end result: Aside from a few medical appointments and a wave to her mother’s fourth-floor balcony, Ridge said she couldn’t see her mom Betty for three months.

“It’s already a difficult choice to put your parents in facilities like this, and it’s expensive,” Ridge said by telephone. “Now, when you think about something like this happening, it just brought up everyone’s worst nightmares and guilt.”

The aging of America presents an enormous opportunity for the industry, with the U.S. Census Bureau projecting 73.1 million Americans will be older than 65 by 2030 and 94.7 million reaching that age by 2060. Meanwhile, the average cost to live in these centers has risen to about $4,000 a month.

But with the pandemic, operators have had to hustle to stock up on personal protective equipment, find coronavirus tests and attract employees, all of which increased their expenses without much help from the federal government.

“A lot of expenses grew, so the combination of fewer move-ins, lower occupancy rates, reduced revenues and expenses combined are going to squeeze your net operating income,” Beth Burnham Mace, NIC’s chief economist, said in an interview. “And depending on your financial position when Covid started, that’s going to be a challenge.”

Surge Concerns
Meanwhile, operators are increasingly concerned the rise of the virus in some U.S. states will mean more infections in their centers. On Tuesday, the American Health Care Association and the National Center for Assisted Living sent a letter to the National Governors Association warning of imminent outbreaks given those surges.

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