Most senior living communities (98.4%) reported that they increase entrance fees annually, with only 0.5% raising fees twice a year and 1.1% doing so three or more times, according to Ziegler’s survey.
When setting entrance fees, there was a range of practices. About 42.7% of respondents said increases vary based on unit type and size, while 37.3% reported applying the same increase to all units. The remaining 20% indicated that fee changes depend on unit type but remain consistent for units with the same square footage.
Monthly Resident Fees Expected to Drop in 2025
In addition to projected decreases in entrance fees, monthly resident fees are also expected to decline in 2025. The median increase for 2024 was 5% across independent living, assisted living, and skilled nursing. However, this is expected to drop to 4% for all care levels next year.
Providers identified several factors behind the 2024 fee increases, with rising labor costs being the top reason. Inflation affecting food, insurance, and utilities also contributed, as did the need to stay competitive in the labor market and offer employee benefits. Additionally, the costs of capital improvements have added to fee adjustments.
One respondent mentioned that, despite media reports of easing inflation, the impact is not yet fully felt in senior living operations. “Wage growth has far surpassed reasonable standards, leading to increased costs being passed on to consumers,” the respondent said. “Higher-than-average rental rate increases, level of care hikes, additional fees, and mid-year rate adjustments will likely continue until margin compression stabilizes.”
Approximately 3% of providers implemented mid-year fee increases in 2024, and nearly 75% said they may consider doing so in 2025. Most respondents (75%) reported not using tiered monthly fees, meaning new and existing residents pay the same rates. However, 25% of communities reported using tiered fees for new residents.
