‘economics Of Aging’ Shifting Faster Than Senior Living Operators’ Ability To Make Services Affordable 

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Expensive and more expensive are the two main price points for many assisted living communities in 2026.

That was the sentiment of Agemark Senior Living Co-CEO Michael Pittore, who recently told me that the senior living industry must face the fact that “our product is not affordable.”

Since having that conversation and writing that story, I have turned this idea over in my mind. I think Pittore is right that there is not a true middle-market option with national scale for assisted living residents. Though there are several communities that offer more affordable services using Medicaid waivers or creative operational models, these kinds of communities require careful planning and forethought and are thus just not as common as their more-expensive counterparts.

A lack of more affordable assisted living will help send penetration rates down in the years to come if it isn’t addressed.

The problem is that it is not an easy problem to fix with the still-high cost of staffing and other expenses. Operators must also generate healthy revenue to make better margins, and rental rate increases are typically the way they achieve that.

The simple truth is that assisted living and memory care still is not affordable for millions of older adults, and I think the financial pressures on many operators today incentivize them to move toward higher-end, higher-rent type communities.

The updated Forgotten Middle study from NORC and the National Investment Center for Seniors Housing and Care (NIC) found that nearly three-fourths of middle-income older adults in 2033 will not have the financial resources to pay for assisted living without selling their home. But even among people who have home equity, nearly 40% still would be unable to afford assisted living as it is priced today.

Among 65 and older, 34% are cost burdened paying over 30% of their income for housing, representing an increase of 2.3 million such households since 2019, according to the Harvard Joint Center for Housing Studies., Less than 15% of older adults age 75 and older can afford both the cost of housing and long-term care services, a 2023 analysis by the National Low Income Housing Coalition found.

“That is a clear signal that the economics of aging are shifting faster than our delivery models,” Vitality Society Founder Meredith Oppenheim told me.

The good news is that there are stakeholders working on a solution. Oppenheim and Formation Capital CEO Arnold Whitman recently launched a new framework to help improve frozen penetration rates, partly through affordability of services. But as Senior Housing News has written before, the clock is ticking now that the oldest boomers are turning 80 this year.

In this week’s members-only, SHN+ Update I analyze the state of senior living affordability in 2026 and offer the following takeaways:

• Why operators must “think differently” to solve affordability 

• Where solutions for middle-market assisted living affordability exist 

• How the industry must evolve to meet assisted living demand

Industry must act faster, ‘think differently’

The cost of senior living for residents is rising with every passing year.

Demand for senior living is currently high as the number of newly opened communities stays historically low. That has given senior living operators more pricing power in their communities, which has enabled them to make up margins as they’ve grown occupancy.

On the other end of the spectrum, however, there aren’t many forces pushing senior living to become cheaper.

In 2025, the national median annual cost of assisted living was $65,028, an increase of 4.4% from 2024. The annual median cost of memory care was $80,280—up 3.7% from 2024, according to a cost of care analysis by A Place For Mom. In contrast, the median household income of households aged 65 and older is $56,680, per a 2024 analysis by the U.S. Census Bureau.

As Oppenheim said, the economics of aging are growing more dire faster than senior living operators can create new products that meet their financial needs.

The original vision of the middle-market problem assumed that a solution would require more collaboration between public and private stakeholders – in other words, states and the federal government. Currently, there are states like Illinois that blend private-pay options with Medicaid waivers that help offset the cost of assisted living. But those kinds of models are only viable in a small handful of states that offer a strong waiver program. And the spending bill that Congress passed last year is imperiling access to assisted living by slashing spending and reducing the amount of money the federal government gives to states for such programs.

At the same time, some Medicare Advantage plans that older adults are using to help pay for assisted living are drying up in certain states even as the program continues to grow nationally.

Boosting the supply of assisted living that more older adults can afford also hinges on increasing government support for middle-market assisted living or expanding the Low-Income Housing Tax Credit (LIHTC), HealthTrust Chief Information Officer Colleen Blumenthal told me.

Staffing is another critical area that impacts affordability. Operators have made investments in top clinical and operations leaders paying higher wages in recent years. Last year, 36% of senior living operators polled by investment bank Ziegler said staffing costs had “increased significantly” while 60% reported slight staffing cost increases in 2025.

Wages and rising resident acuity pit senior living’s mission to create an affordable assisted living product against realities of operating communities today—creating an impasse that is holding the industry back.

“The primary headwind facing the industry is labor, and anything we can do to work more efficiently, will reap dividends in reducing the cost for the middle market,” Blumenthal told me.

I view technology playing a large role in how operators optimize their staffing ratios and more closely monitor resident acuity through things like fall management systems. This new look at senior living staffing, one that includes operators conducting time motion studies of their employees to determine efficiencies, must be part of the puzzle that creates an affordable assisted living product.

Senior living providers must use technology, including remote monitoring and new assessment processes, to improve care, reduce costs and help older adults age in place, with Oppeinheim telling me that predictive analytics and coordinated care pathways are “prerequisites” for creating an affordable assisted living product.

“For middle‑market models to work, we must rethink, redesign, and rebuild how housing and care are delivered together,” Oppenheim said.

The bottom line is that the senior living industry needs to “think differently” about options that could help make the sector more affordable and accessible for a larger swath of older adults, according to NIC Head of Strategy Lisa McCracken.

“We often get stuck in our traditional way of thinking and this is going to require a completely different mindset. This is not taking a high-end private pay model and just removing some bells and whistles,” McCracken told me.

I agree with McCracken that more creativity is sorely needed. To me, part of the problem with all of this is that the industry seems to be stuck at the starting line with regard to those efforts. About seven years ago, Senior Housing News first began chronicling the industry’s quest to broaden services to the middle-market. Back then, discussions centered on the “opportunity” of reaching millions of older adults who otherwise couldn’t afford senior living.

Nobody predicted that a deadly worldwide pandemic would bring the world to a halt only a year later after that report in 2019. But I am struck by how little the senior living industry has progressed since then. In 2026, there are indeed multiple true middle-market options for seniors, but not nearly enough to meet looming demand, especially given the shortfall of development versus demand.

Although I’m not ready to declare the senior living industry’s middle-market push a failure given the rise of some of these models, I do think the industry could fail to serve a good portion of those middle-market older adults aging into retirement in the years to come if it cannot moderate costs. In fact, I think that without a major course correction, that is where the industry is heading.

Models to watch

In the VITALS report, Oppenheim highlighted how Springpoint Affordable Housing operates 19 HUD-subsidized, LIHTC-funded communities “with fitness and wellness programming funded by its own foundation and a unique long-term care-at-home membership program.” Oppenheim also serves as strategic advisor to Springpoint’s leadership.

Similarly, Weinberg Commons, a modular community in Washington, D.C., was developed with LIHTC funding and philanthropic support, “combining deeply affordable housing with wraparound services including wellness checks, transportation, and food access,” the VITALS report reads.

Both of these models demonstrate that, with planning and forethought, senior living operators are expanding access to assisted living and other services. They are not the only ones.

Chicago-based Gardant Management Solutions manages over 80 communities in five states, specializing in Medicaid-waiver programs in states like Illinois, Indiana and Ohio. In 2024, Gardant Co-President Greg Echols told me the industry faced a “capacity of care crisis” regarding senior living affordability. Other providers that are taking steps to grow affordable senior living options include Innovation Senior Living, Priority Life Care and Silver Birch.

Another bright spot for the future of affordable senior living is 2Life Communities’ Opus continuing care retirement community in Newtown, Massachusetts that helps older adults afford senior living in the middle market for those unable to qualify for traditional low-income housing but where traditional assisted living is too expensive. The model blends per-hour care billing with resident-led engagement to reduce costs for both residents, while reducing staffing costs for 2Life.

These models aren’t pared down options for older adults unable to afford traditional senior living, but have been redesigned to create a future of affordability that is more like a portfolio rather than a single, silver-bullet solution.

Medicaid-waiver specialists like Gardant have successfully scaled their model around reimbursement, while 2Life has created a standalone affordable, middle-market assisted living product through intentional design and financing.

“The middle market is not forgotten,” Oppenheim told me. “It is waiting for the industry to catch up with the creativity, the courage and the conviction required to serve it at scale.”

These approaches must scale in order for the industry to create a truly affordable assisted living product to keep pace with demographic demand. If not, the industry faces becoming only a premium product that the richest older adults can afford, making affordability a permanent issue rather than a temporary impasse.

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