Taxes, staffing and insurance coverage premiums are placing strain on senior dwelling operators’ backside traces. However they don’t seem to be resting on their laurels.
With margins nonetheless underneath strain, senior dwelling operators in 2026 are in search of to tamp down prices throughout their corporations. This yr, a number of price range line gadgets are rising extra pricey, putting operators like 2Life Communities in a troublesome spot.
“The most important distinction is the extent of uncertainty and value escalation throughout a number of classes without delay,” Sarah Glassman, chief of property administration at 2Life Communities, informed Senior Housing Information.
In response to those pressures, operators corresponding to 2Life, together with Watermark Retirement and Triple Crown Senior Residing, have deployed methods together with new software program methods, audits and sustainability efforts to convey down the operational value of senior dwelling.
Mounting expense pressures in 2026
Senior dwelling operators are watching as prices rise throughout their organizations.
In 2026, prices are rising for medical insurance premiums and advertising and marketing at corporations like Tucson, Arizona-based Watermark Retirement Communities, in keeping with CEO Paul Boethel. An growing value of insurance coverage claims has led to “unusually excessive” prices to that finish.
Watermark additionally has upped its advertising and marketing price range, with a price per lead within the “excessive single digits,” with 7% to 9% will increase typical in a given yr.
“Over the past handful of years, you had a reasonably distinctive state of affairs with total markets all in lease-up on the similar time and actually leaning closely on spending fairly deep on the completely different advertising and marketing channels,” Boethel informed Senior Housing Information. “That advertising and marketing element from an operational standpoint, continues to develop.”
Brighton, Massachusetts-based 2Life Communities additionally has watched well being care premiums rise. The operator is also experiencing vital will increase in utilities, service contracts and actual property taxes.
Meals is one other area the place prices are rising, from the worth of menu staples to kitchen provides, panelists mentioned throughout a latest panel at Senior Housing Information’ DISHED convention.
It nearly wants not be mentioned that staffing stays among the many prime bills for senior dwelling operators, given the operational nature of the enterprise and the wants of residents. Senior dwelling operators have in the previous few years elevated wages for roles up and down the care continuum to compete with their friends. In keeping with the 2024 State of Seniors Housing report, senior dwelling operators are on common devoting 55% of their complete working bills to labor-related bills.
‘Stacking pennies’
Senior dwelling operators are taking completely different approaches to deal with bills. Watermark leans on auditing, methods and processes to assist mitigate its value overruns.
A 3rd-party firm audits Watermark’s distributors on a quarterly foundation to search out invoicing errors. Watermark additionally within the fourth quarter of 2025 streamlined scheduling in staffing together with computerized checks that may detect the usage of pricey extra time.
“We all know that we’ll have the ability to drive some significant outcomes on the staffing aspect … like shaving a minute or two off of extra time,” Boethel mentioned. “This can be a enterprise the place stacking pennies actually issues.”
2Life takes a twofold method that focuses on income and bills. On the income aspect, the group ties any hire will increase to project-based vouchers and cellular voucher holders alongside straight tax credit score models, the place residents pay the complete hire instantly and affordability concerns are “entrance and heart.”
The operator additionally seeks expense reductions by way of sustainability efforts, corresponding to most heating and minimal cooling temperature settings that exceed state necessities and higher using built-in constructing methods that enable for temperature setbacks when home windows are open, which cut back utility utilization and generate long-term value financial savings, Glassman mentioned.
“Whereas these methods have been in place, we consider stronger insurance policies and extra constant use of current know-how will assist ship financial savings with out compromising the resident expertise,” Glassman mentioned.
And to additional offset prices, 2Life is pursuing grant alternatives to cut back utility and infrastructure prices, together with collaborating in a bunch buying group that gives discounted pricing by way of affiliated distributors and pursuing actual property tax abatements the place attainable.
Louisville, Kentucky-based Triple Crown Senior Residing has grappled with the price of filling employees vacancies, which is why the corporate has applied a brand new administration platform.
Triple Crown has nearly totally eradicated the necessity for company utilization throughout its 17-community portfolio.
“Some are crawling, some are strolling and a few are operating,” Marsh mentioned. “there are occasions in place when management modifications over or one thing out there modifications that you must react to … Company or third get together utilization is simply acceptable in these settings.”
Watermark is actively adjusting its methods, together with those who monitor staffing. The method started within the fourth quarter of 2025 and can probably proceed by way of the primary two quarters of 2026, however Boethel is assured within the influence the brand new scheduling software program can have.
“As you get to higher methods, you’re capable of get much more environment friendly in what you’re doing daily, reallocate sources and even pull again on sure sources,” he mentioned.
