NIC Special Report: A New Approach to Senior Housing
An inside look at how operators are applying a co-living model to memory-care communities.
As senior housing developers, owners and operators look for ways to expand their long-term care capabilities, some are turning to smaller residential models as an alternative to traditional assisted living. With large-scale construction slowed in the current market and many existing projects still years away from completion, panelists at the National Investment Center’s Spring Conference discussed a small-scale model that is gaining traction as a flexible option in the sector.
The model typically operates out of single-family homes, with a smaller number of residents in a more familiar, residential setting. By adapting these homes for care, staff are able to spend more time with each resident in a controlled environment that operators say is especially beneficial for those with memory care needs.
During a session titled “Residential Care Reimagined: The Rise of Small House Models,” George Kutnerian, co-founder and CEO of Wellpointe, Loe Hornbuckle, operating partner at Sage Oak and Francis LeGasse Jr., founder and managing partner at Assured Senior Living, discussed how the concept is performing across care delivery, staffing, affordability and capital markets as it scales.
Panelists said that these smaller models, especially in the memory care sector, provide more focused care and in some cases a sense of independence for residents.
It has not been without challenges. LeGasse said institutional lenders are unsure about the approaches and are hesitant to deploy capital. Unlike traditional senior housing, where financing is often available but construction costs can be difficult to pencil, operators said small-house developments can make sense on a cost basis. However, it has struggled to attract funding from outside investors.
“You can create a niche at scale,” Kutnerian said. “Think of each home as its own mini affinity community.”
How does it work?
LeGasse said Assured Senior Living communities typically house eight to 10 residents, with two staff members on-site at all times. “The level of intimacy that we can provide is second to none,” he said.
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Operating in a smaller setting allows residents to avoid overstimulation that could lead to behavioral disruptions. In memory care settings, panelists said they have seen improvements in resident engagement and independence. Kutnerian and LeGasse said some residents are able to take part in daily routines such as cooking under staff supervision, reinforcing their senses of familiarity and autonomy.
Hornbuckle added that this older generation grew up in houses, rather than apartment buildings. Waking up in a single-family home provides a level of comfort that is easier to process for these individuals.
Staff wear many hats
Staffing at these communities differs from traditional memory care or senior housing development. In larger communities, staffing ratios are typically around one caregiver for every 14 to 18 residents, compared to roughly one to four or one to six in smaller residential settings, depending on the home. Scaling down in this instance allows staff to act as a “holistic caregiver.”
“Where would you rather work—taking care of four or five people, or 15 to 18 residents across long hallways and multiple floors?” Hornbuckle asked.
The panelists added that the model encourages more direct engagement between staff and residents. With fewer residents to support, caregivers can spend time interacting with individuals—be it playing cards or simply sitting and talking—helping build stronger relationships and continuity of care.
Even though the responsibility of the individual worker is higher in these models as they are managing medications, housekeeping and observation, the work has the opportunity to be more meaningful for employees at this level. Long term, these sorts of jobs have a more manageable workload and consistency.
Flexible on affordability
A boutique housing model like this isn’t a one-size-fits-all, and can be adapted to different markets. The panelists, based in California, Colorado and Texas, each described how pricing and positioning vary depending on local demand, reimbursement structures and resident needs.
In California, Kutnerian said Wellpointe’s communities are heavily reliant on Medi-Cal waiver programs, allowing the company to serve more lower-income residents. “We’re offering a market-rate product for the affordability segment,” Kutnerian said.
In Texas, where Medicaid support for assisted living is more limited, operators tend to rely more on private-pay models. Colorado falls somewhere in between, with LeGasse describing a blended approach that includes both private-pay and Medicaid-supported residents.
Looking ahead, the panel is considering expanding into other markets even outside of their home state. These communities can be developed through redevelopment projects or even ground-up construction. They are also looking to acquire property to develop multiple single-family homes and create the equivalent of a built-to-rent community, but for senior housing.
While development across the broader senior housing sector remains slow, this model offers a potentially scalable way to add supply. This also maintains a more personalized approach to care with efficient staffing and high occupancy as the sector continues to improve.
