What’s all the Hype About? Mitigating Hyperinflation and Hypo Supply

November 14, 2022

Soaring costs for building materials and labor, along with a major workforce shortage, conspire to make the construction and operation of senior living communities even more challenging in the post-pandemic environment.

Such was the analysis of the panel, “What’s all the Hype About? Mitigating Hyperinflation and Hypo Supply,” at the 37th Annual SFCS By Design Conference.

Hosted by SFCS principal emeritus Tye Campbell, the panel was a sobering assessment during an otherwise inspiring conference titled “Infinite Possibilities: Finding Longevity.”

Since the Great Recession, the construction and building materials industries have not faced inflationary pressures like the ones that began in 2020. The current climate is characterized by not only excessive inflation, but also restricted supply of key commodities (which are constantly changing) and wildly unpredictable delivery schedules. It’s a perfect storm for contractors and building operators attempting to maintain, improve, and build appropriate environments for our elders.

Featured on the panel was a trio of senior living community development and construction veterans: Michael Matthews, president of Matthews Development Company LLC; Brendan Baloh, vice president of Whiting-Turner; and Todd Shaw, vice president of development, LCS Development.

With “interest rates low and pocketbooks full,” Matthews said that construction demand is extraordinarily high. He encouraged owners and project development teams to:

“It’s a contractor’s market, so sell yourself,” said Matthews.

Brendan Baloh noted that many of the construction delays and inflation-related issues stem from subcontractors who are facing a variety of challenges including a shortage of skilled workers and supplies, higher wages and material costs, and greater overhead with healthcare costs, benefits, and taxes.

Baloh urged the audience to consider that the construction industry lost 1 million employees between February and April 2020, and only 80 percent have returned. The industry needs to hire over 60,000 new workers per month over the next three years to meet current and future demand and that’s before factoring in the 41 percent of construction workers projected to retire by 2031.

To mitigate these challenges and avoid added risk, Baloh encouraged owners and project development teams to:

According to Todd Shaw, Innovative thinking is just as vital on the operations side. A shortage in nursing labor, plus rising costs for utilities, food, and so forth, will continue to pose challenges for the foreseeable future.

To help with staffing issue, Shaw recommended:

Residents understand the inflationary pressures that currently exist, so use this opportunity to increase monthly fees as well as entrance fees. Furthermore:

Hearkening to the conference theme, Campbell summed up the challenges of today by noting, “We try to give you buildings and communities that allow you to operate infinitely, but we unfortunately have to operate within finite restrictions like budget and supply chain. I’ve never seen a time when contractors have worked so hard to get things done.”

Join us for next year’s By Design Conference set for February 20 – 22, 2023 for more insights, inspiration and recommendations from senior living experts.

SFCS Sponsored Studio for Senior Living at Virginia Tech

Throughout the 2021-2022 academic year, SFCS continued its dedication to mentoring students on research and design projects for elder adults through a partnership with the School of Architecture + Design at Virginia Tech.

The Studio for Senior Living allows Virginia Tech students to research and understand the everyday challenges our seniors face and to design new products and systems to improve their lives.

According to Ben Kirkland, Adjunct Instructor of Industrial Design at Virginia Tech, 18 students participated this year via a “hybrid learning system” that offered both in-person and online classes.

The students were divided into eight teams. Working alongside an SFCS mentor, each team interviewed and collaborated with residents of Warm Hearth Village senior living community in Blacksburg.

The students developed products and designs Including:

·       “The Pretzel,” a collapsible walker/grocery cart.

·       A modular window that aids sleep.

·       A habit-forming medication management system.

·       A standing aid to promote mobility.

·       “Mosaic,” an expansive and customizable digital puzzle that promotes social interaction with loved ones.

Now in its 12th year, Kirkland described the Studio for Senior Living at Virginia Tech as a win-win-win. “SFCS designers get inspiration from working with enthusiastic college students; Virginia Tech students receive real-world professional mentorship and experience; and senior residents enjoy the social engagement with both groups as well as the opportunity to enhance their lives and those within their community.”

Beyond Senior Living: Creating Meaningful Connections and Places for Older Adults

Enjoying longevity and living well as we age, with services and social connection, is everyone's dream. But traditional communities and service options cannot meet the burgeoning demand and are not the solution for everyone. Coupled with the implications of the recent pandemic and world events, now is the time to think outside of our conventional lenses and comfort zones.

Ryan Frederick, Founder and CEO of SmartLiving 360, and Sean Kelley, President and CEO of The Kendal Corporation, spoke during the final panel discussion, “Beyond Senior Living,” which was hosted by SFCS Principal Emily Jimerson.

Frederick began by noting that both men and women describe themselves as increasingly lonely and without close friends. In 1990, just 3 percent of men described themselves as having no friends, while 40 percent said they had 10 or more friends. Today, both those statistics stand at 15 percent. A similar disconnection exists for women.

“How can we create meaningful connections so that people can thrive,” Frederick asked. “We live in a time when it’s harder to get to know people than it once was. We have to work harder now to create these connections across our different backgrounds.”

When it comes to caring for seniors who prefer to age in place, meaning stay in their single family home, Kelley added: “Connection is the most difficult thing to provide in the home.”

For Frederick, “place” is more than just four walls stocked with services and amenities. It’s also one’s neighborhood, environment, city, state, even region.

“Many people see this as a binary choice of either ‘aging in place’ or ‘skilled nursing.’ When those are your options, people are going to age in place, but rarely is that your best place for every chapter in life,” said Frederick.

Kelley introduced the Kendal Corporation’s Life Plan Community model that is “not created for care but for purpose.” Founded on Quaker principles, Kendal Corporation has created 13 communities in nine states that revolve around environmental stewardship, integrity, social engagement, meaningful connection, lifelong learning, intergenerational lifestyle, wellness, and mindfulness.

In particular, Kelley showcased Kendal’s newest “Zen-inspired” community, Enso Village in California. “We must listen to the people we plan to serve, and meet people where they are with an openness to where they want to go.”

Kendal communities don’t have resident activity directors, he said. Instead, the residents themselves drive the activities.

Market studies traditionally focused on demographics to determine the viability of a senior living community, Frederick concluded. But studies now are starting to incorporate a “psychographic lens” to help determine the mix of people who can add value and meaning to your community.

Kelley concluded: “This moment in time is a real opportunity for developers to be less focused on the type of housing they build and more mindful of how place can positively and profoundly affect the trajectory of people’s lives.”

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