Seniors Housing & Healthcare Trends

MELBOURNE: Assisted living’s market penetration is as varied as the setting, but six factors support greater market penetration rates in the sector, according to the findings of a new study by the National Investment Center for Seniors Housing & Care.

The findings could lead to more older adults being able to choose assisted living.

Using 2022-2023 data from 99 geographic markets, NIC researchers identified substantial variation in assisted living penetration rates nationwide, finding that penetration is a collective measure of progress in reaching, educating and serving older adults.

“A market’s penetration rate measures how effectively the entire senior housing ecosystem reaches and supports older adults,” Lisa McCracken, NIC head of research and analytics, said in a statement. “Understanding how these forces interact can help operators, investors and policymakers expand access and choice, especially as the population ages.”

The results revealed that assisted living penetration — or the share of households aged 75 and older residing in assisted living communities within a given market — cannot be explained by demographics or economics alone. Instead, according to NIC, higher adoption occurs when a multitude of forces align, including economic foundations, consumer awareness, workforce capacity and supportive public policy.

“Our goal was to move beyond assumptions and understand what really influences assisted living penetration rates at the market level,” NIC Senior Principal Omar Zahraoui said in a statement. “We found that penetration is influenced not just by personal finances or functional care needs, but by how well a market supports awareness, confidence, planning and workforce stability early enough for families to choose assisted living proactively.”

The six key points identified by NIC as supporting greater market penetration rates:

1. Structural foundations define market potential, not penetration. Markets with higher income levels, greater homeownership and wealth, and deeper workforce capacity — and lower poverty — tend to have higher assisted living use, but not always.

2. Higher care needs don’t always mean higher penetration. Markets with lower activities of daily living prevalence show higher penetration, suggesting that a move to an assisted living community can be a proactive choice and not purely a reactive decision.

3. Cultural attitudes, familiarity with assisted living and perceptions of the setting strongly influence adoption. These factorssometimes outweigh financial or demographic capacity.

4. Affordability is both a misperception and a reality. In many markets, options are within reach for middle-income older adults, but lack of awareness and delayed planning can delay move-ins.

5. Workforce availability is important. Markets with strong caregiver pipelines are more likely to expand and serve more residents.

6. State and local policies shape access, affordability and development. Medicaid waivers enabling home- and community-based services provision, discharge rules, certificate of need processes and development pathways can shape access, supply, affordability and development.

One data standout, according to NIC, is the affordability challenge, which Zahraoui said was less about absolute cost and more about perception, confidence in planning, delayed decision-making and alignment with available options. Although affordability and absolute costs are real, Zahraoui said, the data suggest that confidence in assisted living and a disconnect between current lifestyle and future plans for aging can be more significant barriers than cost.

The study focused on four contrasting markets: Minneapolis (10.1%) and Portland, OR (7.5%) with the highest penetration rates, and Miami (2.4%) and Las Vegas (1.9%) with the lowest penetration rates.

Zahraouisaid that Minneapolis benefits from strong socioeconomic fundamentals, but it also has a mature senior living market with a deep base of reputable providers. The market also enjoys a “culture of acceptance” for assisted living, along with a “robust” healthcare system, he added.

The findings, according to NIC, underscore that improving assisted living penetration requires coordinated effort from operators, investors, policymakers, educators and advocates to expand awareness, strengthen affordability, stabilize workforce pipelines and normalize a move to assisted living as a proactive option rather than a forced decision.