Senior Housing Shortage Grows As Baby Boom Leading Edge Hits 80

Demand for senior housing is hitting record highs as the oldest Baby Boomers turn 80 this year.​

The tipping point was never a question of “if.” Only “when.” When is now, and the challenge of now is to catch up.

New survey results from commercial real estate firm Cushman & Wakefield show that demand is rising faster than new construction, tightening the market. Construction is at its lowest level in more than a decade, Cushman reports.​

That mismatch between surging demand and underbuilding promises to benefit senior living real estate investors. The firm’s survey shows that property sales have increased as investors increase their bets on a sustained valuation rebound.​

For America’s aging population, rents have risen steadily. Senior housing is now a pressing priority amid the nation’s acute affordability challenge. A pervasive chokehold: Developers willing, able, and determined to build face a now-familiar gantlet of zoning barriers and local opposition.​

Cities and states across the country have wrestled with housing affordability for several years, passing laws to allow greater density in single-family neighborhoods, near transit and by right in commercial areas. Texas, Colorado, Florida, Washington, California and Oregon are among the states to adopt reforms to encourage density.​

Housing reforms such as these provide for the development of more multifamily senior housing. However, rental senior housing, particularly affordable projects, typically faces greater opposition than owner-occupied housing.​

Neighborhood groups fight them with the same vigor they bring to rental housing in general. Without state laws that require local governments to permit more housing, elected officials often yield to residents who oppose rental projects.​

At the federal level, Congress is advancing legislation, the Housing for the 21st Century Act, which includes provisions for senior housing. The House passed the measure Monday night.​

The law would require the Government Accountability Office to investigate barriers in the U.S. Department of Housing and Urban Development’s elderly housing programs and recommend specific fixes. That mandated review would provide Congress with technical evidence to expand or reform the Supportive Housing for the Elderly program and related tools to enable future senior housing production.

Where the senior housing market stands

Analysts have warned for decades of a mounting senior housing shortage. As a result, the gap is projected to reach roughly 350,000 to 400,000 units by 2030.​

Cushman data shows the number of units under construction fell to 2.3% of inventory, the lowest share since 2012. Meanwhile, occupancy reached 90% in Q4 of last year, the highest level since 2017 and the result of 20 straight quarters of stabilized occupancy growth.​

Net absorption – space leased minus space vacated – outpaced new supply by nearly five times in 2025, tightening an already constrained market.​

“To meet market demand at peak levels, the industry must deliver roughly 70,000 units per year, between now and 2036,” Zach Bowyer, executive managing director and head of living sectors at Cushman, said in a statement. “With less than 6,000 units delivered in 2025, the sector is facing a massive shortfall in housing and care options for our senior population.”​

That supply‑demand imbalance is pushing senior housing performance to the top of commercial real estate sectors. The National Council of Real Estate Investment Fiduciaries Property Index showed that senior housing topped all property types in returns in the final months of 2025.​

That outperformance has held throughout 2025, as well as 2024. A one-time buyer’s market has turned into a seller’s market.​

Cushman reports senior living valuations rose more than 10% in 2025 and transaction volume jumped more than 50% late in the year. Most senior housing leaders who responded to the survey expect property values to rise this year, a sentiment that is sharply higher than a year ago.​

Rental affordability becomes a major fault line

Cushman’s outlook projects that the middle‑income senior population will double by 2029, with more than half of these seniors unlikely to be able to afford traditional senior living models.​

Active adult living ranks among the strongest investment categories in the survey. Occupancy in those properties is nearly 96%.​

The challenge is securing approvals for projects, especially those that include affordable units.​ For example, a proposed project for low-income residents 55 and older in Dunwoody, an Atlanta suburb, failed at the city council last September after months of work and battles with residents.​

Minnesota-based affordable housing developer Dominium sought a zoning change from commercial to planned-unit development to permit apartments. Dunwoody’s planning commission approved the change following a contentious July meeting that prompted revisions.​ The developer complied with those changes, reducing the unit count from 215 to 165 rental homes. Residents objected to the density and that every home would be a rental.​

“They just don’t know enough about the program to understand what guys like me as developers are trying to develop, especially 55 and older properties,” Ken Blankenship, president of the Georgia Affordable Housing Coalition, said in an interview with The Builder’s Daily.​

“At some of the last 55 and older deals that I did in DeKalb County (where Dunwoody is located) when I was still active with Prestwick, we had people clamoring for the units when we broke ground, not as we were getting ready to rent up.” Blankenship, a founding partner of Atlanta apartment developer Prestwick Cos. and now retired from the company, says. “There’s a huge demand for it.”​

Future of rental senior housing

Without more development and policy solutions, today’s rally in senior housing property valuations could solidify into tomorrow’s access crisis for aging Americans. The same forces that are driving record real estate investment performance threaten to price out the very residents this housing is meant to serve.​

Closing that gap will require local approvals that align with state and federal intent, capital willing to back more income-diverse projects and community support for rental options that let older adults age in place. How cities, states and Congress respond over the next decade will determine whether senior housing becomes a resilient care platform or an acute pressure point in the broader affordability crisis