The starting point for making realistic assisted living demand estimates is to begin with the right question “Why to?” not “Where from?”  First, frail seniors (age 75 and over) aggregate in the vicinity of the adult children (age 45 to 64). But the adult children, typically, are still working. So the overall market area for assisted living is best defined as the labor market area. This initial starting point has several advantages.

Second, strong local economies attract adult children, and hence attract frail seniors (for example the Atlanta metro area today). Weak local economies lose adult children from the work force and generate net-out migration of frail seniors (such as in many mid-western counties during the recent recession). Labor is also an input to personal care, so there is a double reason to pay attention to local economic conditions. A continuing supply of affordable caregivers is essential to providing successful assisted living services. Labor market data is available monthly for all 3,000+ counties. 

Third, using the county as a start point for an assisted living market study simultaneously addresses the often asked question “Where from?”  The annual American Community Survey (ACS) shows recent movers in the county by age group including those age 75 and over. Nationally over a five-year period, 60 percent of the age 75 and over movers come from “within the same county”. Local markets vary, as one would expect. (Slower growth Lancaster County, PA is roughly 70 percent local, while faster growth Travis County, TX is about 55 percent local). In nearly all cases the majority of the older movers are within the labor market area. This makes sense if in fact the frail seniors are relocating to be near, or nearer, the adult children. 

Fourth, the calculation for frailty involves multiplying persons in households by a personal care frailty factor, then spreading this result over an income profile for individuals age 75 and over. Keep in mind that personal care demand includes assisted living as well as home health, adult family homes, and care provided by family members.

Fifth, the profile can be found for all counties in the HUD special income tabulations which are an extension of the ACS. These tabulations include one-person households age 75 and over.

And, sixth, for large counties, submarkets can be determined by using a drive-time-to-work estimate. Most frail seniors live within about half a one-way drive-to-work for their employed adult children. The ACS shows the mean time to work for counties. All of the major demographic services provide drive time geography and population estimates around particular sites. The number of frail seniors in a submarket is simply the proportion of county-wide adult children in the submarket. And, the site-to-county median income ratio is used to adjust the income profile (for example a $65,000 median for site and $50,000 median for the county would be a ratio of 1.3). All major demographic vendors provide median income estimates by age group.

Using these 6 factors results in a demand estimate that addresses the “Why to?’ question.