**Innovations in Senior Housing: Expanding the Reach**
Senior housing presents an intriguing paradox. These types of residential communities are specifically designed for the aging population—often located near essential amenities and medical care. Yet, despite these advantages, adoption remains low.
According to McKinsey & Company, just 5% of seniors move into senior housing internationally. This low engagement rate raises critical questions about how the industry can better support older adults while achieving sustainable growth.
Katy McLaughlin of McKinsey Global Publishing explored this issue in greater detail during a conversation with Sam O’Gorman, an associate partner at McKinsey.
While cost is often assumed to be the primary barrier, O’Gorman noted otherwise. “The majority of those surveyed said they could afford senior care. But they want to stay in their own homes as long as possible,” he explained.
“The default assumption for many people is, ‘I’ll stick it out in my own home for as long as possible. And then, when I really have to, I’ll move into a care home of some distinction,’” said O’Gorman. However, this mindset results in many seniors living for decades in homes that may no longer suit their evolving needs. “They end up living in a kind of hiatus where it’s suboptimal for an extended period of time,” he added.
One of the challenges lies in the structure of senior housing models. In regions such as Australia, New Zealand, and the United Kingdom, people often purchase units. In contrast, in the U.S. and Canada, senior housing is primarily rental-based—often requiring a substantial upfront deposit, which can be a hurdle for many.
O’Gorman suggested introducing more flexible approaches, such as a “try-before-you-buy” model. This would allow seniors to rent for a specific trial period in locations where senior housing units are for sale. In rental-based markets like the U.S. and Canada, offering shorter leases—perhaps three-month commitments instead of year-long leases—could provide an opportunity for seniors to test the waters without making long-term decisions.
Another key issue is a lack of awareness. Many people still equate senior housing with nursing or care homes, which can deter interest. Improving the industry’s messaging and marketing efforts is crucial. O’Gorman also emphasized the importance of engaging not just the seniors themselves, but their broader support networks—family, caregivers, and community resources.
Despite these strategic improvements, O’Gorman acknowledged senior housing won’t be a fit for everyone. He noted that even a strong market penetration might only reach 10%. “I think the question operators should ask themselves is, ‘How do we offer services and support to that pool of people who are unlikely to be customers?’” he concluded.
With innovation, thoughtful outreach, and flexible models of engagement, the senior housing sector has opportunities to grow—creating better outcomes for older adults and the industry alike.
