Senior Living and Senior Housing Definitions

Introduction

As a result of consulting engagements and discussions with lenders, investors, operators, managers and appraisers in Senior Housing and Senior Living, the definitions to follow that Senior Consulting, LLC (SC) uses in its Market Analyses are widely considered to be industry standards. Increasingly, we find developers and operators are attempting to, and succeeding in, blurring the definitions of Active Adult/Active Living to Independent Living, and more frequently, Independent Living to Assisted Living, in their marketing efforts.

With such a high percentage of both Senior Living and Senior Housing operators marketing themselves as an alternative to what would often be a different definition of Senior Living or Senior Housing, it is imperative that a Market Study be completed that includes mystery shopping and physically touring the competition to compare unit mix, sizes, rates, costs for additional services, amenity and common spaces, and the age and physical characteristics of the building prior to considering a new project for development. SC’s CEO, Tim Cassidy, mystery shopped approximately 2,000 facilities in the last dozen years, giving the company a unique perspective on Senior Living Market Analyses and project development.

Senior Living Definitions

Senior Living includes Independent Living, Assisted Living, and Memory Care rental communities for seniors over 62 years old, defined as follows:

Independent Living

Independent Living means housing for senior citizens that is not licensed (like Assisted Living) but does provide a minimum of one main meal (with the option for or access to three meals per day), and housekeeping and laundry included in the rent. Unlike Assisted Living, residents also have a full kitchen that includes a stove, cook top and full-size refrigerator. Hence, many Senior Housing projects call themselves Independent Living when they are in fact a form of Senior Housing. Notwithstanding, there are exceptions. Some Independent Living apartments do not have full kitchens, but instead have smaller kitchens without a stove. All meals are included in the rent and care is not provided.

Assisted Living

Assisted Living means housing for elderly or disabled people that provides nursing and personal care, housekeeping, prepared meals and various services as needed. Assisted Living is licensed by the state. With one substantial exception, namely Assisted Living facilities claiming they offer Independent Living when residents do not have full kitchens with predominately small studio apartments, licensed Assisted Living facilities adhere to industry definitions that closely comport to licensed definitions. While the overwhelming majority of Assisted Living facilities do not have kitchens, there are exceptions including some newer Best-of-Class communities that also have substantially more one- and two-bedroom units than older facilities.

Memory Care

Memory Care, or care for patients with dementia or Alzheimer’s, is a type of Assisted Living. When many Assisted Living, or even Independent Living residents, have a form of dementia, a Memory Care facility, or Memory Care unit or wing, within an Assisted Living facility provides a safe and secure environment with specific design and operational features for dementia and Alzheimer patients.

Note: Continuing Care Retirement Communities (CCRCs) typically provide Independent Living, Assisted Living and Memory Care, as well as Skilled Nursing Facilities. CCRC’s typically require a significant six-figure entry fee in addition to monthly rents. They are licensed by the State Department of Insurance versus the State Department of Health or State Department of Social Services in some cases. Hence, components of CCRCs are included in analysis of Senior Living demand and development consideration.

Senior Housing

Senior Housing is defined as over-55 or over-62 age-restricted housing with potential amenities and services available on an optional basis. Senior Housing includes: i) Active Adult Communities (typically for-sale, age-restricted single-family homes in larger communities with a community center, although some communities have attached homes and/or multi-story senior apartments); ii) over-55 condominiums and townhouses (typically for-sale apartments); iii) market-rate Senior Housing (varies from single-story with attached garages to multi-story buildings); and iv) Active Living communities (rental units typically in a multi-story elevator building with more common space and amenities than market-rate Senior Housing). Additional definitions are as follows:

Active Adult Communities

The most predominant type of Senior Housing is Active Adult communities that are typically age-restricted residential developments with single-family homes, although some communities have attached homes. Nationwide these communities are typically larger (by acreage and number of units) than other types of Senior Housing with amenities that include a community center or clubhouse and, in warmer climates, may feature one or more golf courses. Most Active Adult units are for-sale properties.

Over-55 Condominiums and Townhouses

Condominiums are typically in apartment buildings, occupying less land than Active Adult communities. They usually do not have a community center and may be built as an infill development. Units are for-sale properties.

Market-Rate Senior Housing

Market-Rate Senior Housing units can vary from single-story with attached garages to multi-story apartments. This type of housing is typically found in an urban or older suburban setting. Most buildings have some common areas and amenities, but unlike Active Living, they have fewer amenities and limited optional services and staffing. Units are rentals.

Active Living Communities

Active Living Communities are the fastest-growing form of Senior Housing in a multi-story elevator building with amenities and common space, but without meals or services included in the rent like Independent Living. Since neither Active Adult communities nor Active Living communities are licensed, many in the industry have taken liberties with the overlapping definitions. Active Living developments are single buildings with unit counts of 100-200 that occasionally have a limited number of villas, while Active Adult communities are usually much larger with single-family, age-restricted homes. Active Living communities sometimes have restaurants or cafes, but unlike Independent Living, meals are only available on an optional basis. SC believes more and more Active Living communities will be developed in the future with the capacity for this option.