Hdg Execs: These 6 Trends Could Reshape Senior Living In 2026 

Senior living operators in 2026 must adapt to a new operating environment and talent, technology, meeting customer expectations and finding ways to grow are the key to doing so.

Six trends in particular could impact the industry in 2026, according to Health Dimensions Group executives: sweeping Medicaid cuts, states embracing alternative care models, the continued growth of AI, changing staffing dynamics, strong capital market activity and managing strategic growth during a period of decreased development activity.

In the year ahead, operators able to manage staffing challenges, adapt staffing ratios and support teams with technology will set themselves up to capture incoming demand, according to HDG Senior Vice President of Recruitment Services Sarah Friede.

“Workforce has now become an operational, strategic imperative,” Friede said during a webinar Thursday. “It’s the single-biggest factor driving resident experience, staff stability and financial sustainability.”

To make headway on staffing challenges, senior living providers must rethink staffing strategies, from recruitment to retention rather than “posting the same jobs and offering the same benefits.”

HDG has experimented with different scheduling amid the rise of four-hour “micro-shifts” that better align with an employee’s work-life balance. To do that, HDG communities create an “internal staffing pool” of available shifts for employees that want to take on extra shifts at sister communities, Friede said.

To bring staff onboard quickly and improve retention, operators can outsource some administrative functions or use AI-supported scheduling and virtual interviews to streamline the hiring and onboarding process. Providing tuition support or mentorship pathways for staff to advance in their careers, for example, a certified nursing assistant earning their licensed practical nursing certification, can also help, Friede added.

“The key takeaway here is flexibility. It’s no longer a perk, it’s a retention strategy, rethinking employee experience,” Friede said. “Providers who invest in people, creativity and technology today will define the next decade of care.”

Operators like HDG are using AI-supported tools to forecast health changes, triage clinical needs and aggregate resident data.

The operator’s communities use AI tools to bring more personalized engagement, with HDG interviewing incoming residents to form personalized engagement and programming plans that considers life history and interests, according to HDG CEO Erin Shvetzoff Hennessey.

In the near-term, operators should treat AI and software platforms that integrate AI like a tool to reduce time consuming tasks for staff so they can spend more time with residents, while defining clear goals for staff in what AI tools should be used for. To manage AI rollout and AI use, HDG has formed an AI task force to monitor AI use across its communities, Shvetzoff Hennessey said.

“We never want technology to replace the care and services that we provide that are personalized and engaging human-to-human,” Shvetzoff Hennessey added.

While providers adapt to these changes, the capital markets continue to remain strong, fueled by three Federal Reserve interest rate cuts in 2025 that could set up this year expecting to see “another record year” in senior living M&A, according to HDG Executive Vice President of Growth Paul Branin, led by a “lower level of risk” for M&A over new development.

Development activity could remain muted in 2026, Branin added, noting challenges around entitlements, debt financing and rising construction costs, along with the time it takes to get a new project out of the ground and open for move-ins.

“We should start to see new development at least become a topic of serious interest in the next few years,” Branin said. “The demographics certainly point in that direction as the risk of new development is also mitigated by the continued occupancy gains and rapidly aging population.”

The baby boomer generation started turning 65 in 2011 and 10,000 boomers turn 65 every day until 2030, over 4 million turning 65 annually, according to the Alliance for Lifetime Income cited by AARP, with peak years of demand from 2024 to 2027, Branin said. Due to the boomer demand influx, the industry has reported independent living occupancy rates of over 90% in the fourth quarter of last year—the first time since 2019, according to the National Investment Center for Seniors Housing and Care (NIC).

The boomers continue to bring “generational shifts” demanding independence and choice, and in the coming years, the industry will grapple with affordability challenges that could impact assisted living. While these impacts remain to be felt, Branin said aging, vintage AL properties “are not proving to be an appealing option” for private-pay baby boomer older adults.

But the industry cannot simply “build it and they will come” as seen in pre-pandemic years, Branin said. Those undertaking new projects must understand local market dynamics, knowing what amenities are popular as all projects should start with a feasibility study. Some trends to watch in development include the popularity of two-bedroom units, smaller dining areas, parking availability and multiple gathering spaces, he said.

“It will be critical to be strategic in pursuit of growth and to stay disciplined, Branin said. “Price escalations are occurring and will continue and growth into new markets or outside existing geographic boundaries is always a temptation.”

In 2026, successful organizations are planning ahead, thinking about strategic growth capable of capturing incoming boomer-driven demand, Shvetzoff Hennessey said.

“You need to be diligent in making sure you execute on things and make sure that strategy is the lens that you’re looking through,” Shvetzoff Hennessey said.

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