The senior living industry will have to hold its breath a little longer for new development to pick up if construction conditions in 2026 are any indication.
Overall, the U.S. construction industry is in a period of “cautious stability” this year due to investments in building data centers and other AI-oriented infrastructure propping up commercial real estate activity.
That’s according to a new construction costs report from The Weitz Company, a national construction company that services the senior living industry.
While some inflation of costs has subsided, the senior living industry is facing the impact of tariffs, shortages of construction workers and persistent cost pressures that will “temper growth in the months ahead,” the report’s authors wrote.
“As a result, overall growth in 2026 is expected to remain subdued rather than accelerate,” they wrote.
Indeed, NIC MAP data showed the number of new units under construction fell to levels since 2012. Likewise, the senior living industry added just 0.4% of total inventory worth of units in the first quarter of 2026.
Project timelines are lengthening, “reflecting heightened scrutiny around financing, procurement, and risk,” the report’s authors noted.
That isn’t to say senior living companies aren’t teeing up new projects. Senior living architects are right now readying the senior living industry’s next wave of construction projects and developers are champing at the bit to get started once conditions turn. For example, companies and colleges are working on university senior living projects now in order to work on and open them in the years to come.
“Owners are proceeding more cautiously through preconstruction and funding decisions, contributing to slower starts but preserving longer‑term demand,” the report’s authors wrote.
They added that they expect “steadier but still elevated escalation” of costs in the 3% to 4% range annually, “driven less by material shortages and more by labor availability, tariffs, and market concentration.”
“Early procurement, disciplined contingency planning, and careful contract structuring remain critical to managing cost risk as projects move from preconstruction into execution,” they wrote.
Excluding sitework, a typical mid-level independent living community carried construction costs totaling about $242 to $293 per square foot, according to the Weitz report. A similar assisted living project carried construction costs $281 to $358 per square foot.
Some senior living operators are amid the development slowdown subsisting on partnerships with REITs and other large partners. Others, like Belmont Village, have notched new high-end development projects with partners including Turnberry with rates that pencil out, allowing them to advance forward without as much delay.
