Seniors’ housing occupancy rates hit an all-time high in the first quarter in the United States, even as vaccination rates rose and coronavirus infections declined.
Residency in assisted and independent living facilities fell to 78.8% in the first three months of 2021, down 1.8 percentage points from the previous quarter and 8.7 percentage points from the previous quarter. a year earlier, according to a survey of for-profit and non-profit managers. speakNational Investment Center for Housing and Elderly Care. The trend is a potential concern for industry debt investors.
Although elderly residents of housing have been extensively vaccinated against Covid-19, there is a “natural lag” between when someone asks to enter a facility and when they actually move in, said Thursday the The group’s chief economist, Beth Burnham Mace, in a press release. Over 29 million people aged 65 and over are fully vaccinated in the United States, according to theCenters for Disaster Control and Prevention. The Census Bureau put the number of people in this age group at over 54 million as of July 1, 2019.
“Data for the next two quarters will show whether consumers have passed the pandemic and are once again considering senior housing properties,” Mace said.
The coronavirus, especially deadly for the elderly, has made the senior sector the riskiest segment of the $ 3.9 trillion municipal bond market. Muni defaults are extremely rare because states and cities have broad power to raise taxes to cover their debt. But it’s also open to nonprofits, including those who run retirement communities, which can sell bonds through local government agencies. Amid the pandemic, these facilities faced increased costs for personnel and protective equipment, as well as relocation restrictions from state health agencies. As a result, many are unable to repay what they have borrowed.
The coronavirus pushed $ 765.8 million in municipal bonds issued to defaulting senior communities last year, and this year assisted living and continuing care retirement communities – which offer independent housing , an assisted living facility and skilled nursing care on a campus – defaulted on $ 425.1 million in munis, according to data compiled by Bloomberg.
Continuing care retirement communities, known as CCRC, and assisted living centers account for half of the defaults in the state and local bond market this year. The survey released Thursday includes CCRCs, which account for about 85% of the roughly $ 42 billion in municipal bonds issued for senior housing.
Data for the first quarter show that the occupancy rate of assisted dwellings fell by 2 percentage points to 75.5% and that the occupancy rate of free-standing dwellings fell by 1.6 percentage points. percentage to settle at 81.8%.
“As the move-in moratoria continue to be lifted and operators receive more and more requests from potential residents, prospects and property visits, the occupancy rate may increase in the coming months”, said Chuck Harry, COO of NIC.