America’s senior population is growing rapidly, fueling a boom in construction of senior assisted living properties. The assisted living construction boom is anything but geographically uniform, however, and a handful of metropolitan markets account for a wildly disproportionate share of new construction of senior assisted living properties.
The population of seniors aged 65-74 is expected to grow1 faster than any other demographic segment in the country between 2015 and 2020, continuing an annual growth rate of over four percent.
Geographically speaking, the growing senior population is concentrated in the southern and western states. A mere seven states, Florida, Texas, Virginia, Maryland, North Carolina, South Carolina, and Tennessee are expected to account for 40 percent2 of the growth in the senior population.
Many of these seniors reside in, or move to, large cities. As a result, construction of new assisted living facilities is disproportionately concentrated in a handful of major metropolitan markets. Here are five of the most important.
#1 Boston, Massachusetts
Boston had 675 new units of assisted living under construction in the third quarter of 2013. This is an important part of a broader trend in the state, one that saw Massachusetts labeled3 as one of the top 10 states for senior housing construction.
However, Boston may be experiencing the effects of a statewide bubble4 in housing prices, which have been rising faster than the costs to either build or rent a home. Whether the current boom in assisted living represents over-development remains to be seen.
#2 Chicago, Illinois
Chicago had 676 new units of assisted living under construction in the third quarter of 2013. Between Chicago and other metropolitan centers, Illinois made the list5 of top 10 states for senior housing construction.
The State of Illinois has played a significant role in the current assisted living construction boom, by expanding the number of facilities that can receive Medicaid6 payments. Some of these facilities are new constructions, while others are being converted from other uses.
#3 Phoenix, Arizona
Phoenix had 858 new units of assisted living under construction in the third quarter of 2013. This is perhaps small wonder, given Phoenix’s status7 as one of the most rapidly growing metropolitan areas in the United States. Cost of living is relatively low, a significant draw for many new residents.
#4 Houston, Texas
Houston had 1,071 new units of assisted living under construction in the third quarter of 2013. Indeed, Houston is at the forefront of a senior assisted living construction boom in Texas.
Texas’s business-friendly climate has encouraged general population growth, leading to rising rents and more construction.8 In many cases, non-senior adult transplants, notably from Michigan and California, are later followed by their senior parents.
Thanks to Houston and other major metropolitan markets, Texas was named9 one of the top 10 states for senior housing construction.
#5 Minneapolis, Minnesota
Minneapolis had 1,072 new units of assisted living under construction in the third quarter of 2013, rocketing past10 Houston to take the top spot for that year.
Along with Saint Paul, Minnesota, Minneapolis is experiencing a boom in assisted living construction in response to a so-called “silver tsunami,” the 1.5 million baby boomers in the state who are either retired or close to it. Small wonder Minnesota was also named11 one of the top 10 states for senior housing construction.
As of 2013, over 6,00012 new senior housing units were planned for the Twin Cities. The sector offers a plethora of options, including nursing and memory care options for patients with Alzheimer’s and other dementia-like conditions.