Below is the second of a two-part interview. The first segment ran as a Provider News Alert on Oct 20.

Provider posed a series of questions to Beth Burnham Mace, chief economist and director of outreach at the National Investment Center for Seniors Housing & Care (NIC), on issues tied to COVID-19 and how the marketplace in all senior housing sectors will move forward even as the pandemic shows no signs of letting up.

Provider: Will all market segments have to make changes to the way in which they build due to what has happened with the COVID crisis?

Mace: Yes, building design for all segments will change due to the COVID crisis. The ability to segregate a portion of a property to prevent the spread of illness will occur. This may evolve to “neighborhoods” within properties. Touchless technology will become more common, for elevators, doorways, lights, etc. HVAC systems will evolve as well to ensure fresh air circulates frequently, and systems will be put in place to keep air healthy.

Provider: What is the outlook there for new building in the assisted living market? 

Mace: The near-term outlook for new construction is weaker today than it was pre-COVID as evidenced by slowing starts activity. Starts, literally, when shovels break ground, totaled roughly 800 units in the second quarter for assisted living for the 31 NIC MAP Primary Markets. This was the fewest quarterly count since 2009.

On a four-quarter aggregate basis, starts totaled 7,635 units, the fewest since 2012. As a share of inventory, this amounted to 2.5 percent. For perspective, at its peak in late 2015, this figure was 6.2 percent. For independent living, starts on a rolling four-quarter basis totaled 7,836 units in the second quarter. As a share of inventory, this equaled 2.3 percent.

Provider: What is causing the slowdown?

Mace: The slowdown in starts activity in turn can be traced to debt providers who are being more cautious in their lending activity, longer bureaucratic times for inspections and entitlements and such, developers who have become more hesitant in a less certain environment, equity providers who have slowed plans, and supply chain constraints.

Provider: What lessons have been learned throughout this crisis?

Mace: I believe the COVID-19 pandemic will provide “lessons” for years to come. I said earlier that flexibility and responsiveness are key, and the industry can take pride that it has exemplified flexibility and responsiveness to an unparalleled crisis. Early on, operators did what they are charged with, that is, caring for, serving, and housing their residents. The challenge for many of those same operators stemmed from the broader environment and a lack of a national coordinated response to provide appropriate PPE [personal preventive equipment] including masks, cost-effective and timely testing, and contact tracing. 

Provider: Any specifics on rules that are now the norm for infection control, for example?

Mace: Many protocols that have been put in place to combat the virus will stay in place. This includes sanitation and safety protocols, for example. A singular entry way as opposed to several entry ways into a property may be an example of this, as well as cleaning regimens. Digital marketing, virtual tours, and the ubiquitous use of technology will grow further, including telehealth practices. “Cohorting” of staff with residents where a few staff are assigned to a few residents on a consistent basis may become a broader practice, and perhaps the use of universal workers. 

I think that we have learned and relearned about the importance of staff and culture as well, and that these lessons will stay in place. Operators who have developed programs that provide support for COVID-fatigue and exhaustion—both physical and mental—are creating loyalty among their staff. And, loyal staff and strong employer-employee relationships are key to establishing loyal residents who value consistent staffing. These residents, in turn, provide good word-of-mouth marketing. Successful property operations can flourish with this interdependent symbiotic loyalty.

Provider: What is the overall take from NIC on this pandemic as we wind our way into what is expected to be a very challenging and trying winter?

Mace: The COVID-19 pandemic is far from over and continues to threaten older adults.  Operators are implementing new protocols to keep residents safe, but the future is still unknown due to the nature and duration of the COVID-19 virus. As a result, the context of operating under these circumstances has shifted from a sprint to more of a marathon, but a marathon without a yet known finish line.

Operators, many of whom have been in lockdown for several months, increasingly must wrestle with how to maintain critical health and safety protocols, while beginning to allow for needed interaction with family and some form of communal activities. Social isolation and its negative impacts on quality of life are real, and all efforts to support resident socialization are to be lauded.

NIC also continues to support any and all efforts aimed at making it easier for operators to respond to the ongoing pandemic and crisis. This includes all efforts to continue to provide consistent and easy access to high-quality PPE, ample and cost-effective timely testing to ensure a safe environment for staff and residents, as well as contact tracing.

Lastly, NIC supports all efforts to provide data and transparency to the industry and the public at large. Misinformation and headline risk is a threat. Through our many data initiatives, NIC provides objective data to help all of us better understand the impact of the pandemic on the senior housing and care sector.

To read Part 1 of the series, go to NIC Interview, Part 1.