Senior Housing Development Trends: When the Sun Belt Stops Saying Yes

Dan Lindberg
Aug 15
3 min read

For years, the Sun Belt stood for fast growth, ample land, and quick approvals. That story is changing. New research finds that in many Sun Belt metros, housing supply is now less responsive to demand, and local processes are slowing down projects that would once have sailed through. Think of it as a quiet convergence with the “rules-heavy” coastal model.

What’s actually shifting

Permits and starts are cooling. Recent data indicate a slump in new building permit authorizations, with multifamily activity significantly below peak levels, suggesting fewer deliveries ahead despite sustained demand.
Local processes matter more. Places with a higher proportion of college-educated homeowners and stricter land-use regulations tend to produce less new housing, all else being equal.
The narrative has gone mainstream. Media coverage now argues Sun Belt metros may lose their “cheap-housing advantage” as rules and local votes constrain supply.

Why this matters for senior housing development trends

Demographics are a tailwind. The population aged 65 and above is approximately 61 million today, and by 2030, roughly one in five Americans will be of retirement age. Sun Belt states house a large share of these older adults and continue to attract domestic migrants.
The sector is undersupplied. NIC MAP Vision estimates the U.S. needs on the order of 560,000 additional senior housing units by 2030, but current development trends imply closer to 190,000—roughly a third of what’s required. Occupancy has been rising as a result.
Where the units are matters. One industry analysis suggests that about half of age-restricted and senior housing inventory is located in Sun Belt markets, where entitlement frictions are now increasing.

Bottom line: demand is accelerating in many Sun Belt metros, just as approvals become more challenging. The bottleneck is increasingly political and procedural, not just financial.

What to watch on policy

California Streamlines Laws. Exempts urban housing and other settings from certain reviews, which allows anyone to sue to stop new developments.
Florida’s Live Local Act. The 2023 law and its 2025 clarifications preempt certain aspects of local zoning for qualifying mixed-income projects on commercial or industrial sites. Senior communities with affordability components may be able to use these by-right pathways.
Arizona’s statewide ADU and missing-middle reforms. New state laws expand the locations where accessory dwelling units and smaller-scale housing types are allowed, thereby curbing some local barriers. Implementation details still vary by city.
Texas extraterritorial jurisdiction (ETJ) changes. SB 2038 allows landowners or residents to petition to exit a city’s ETJ, thereby shifting the regulation of fringe development. That can alter timelines, utility coordination, and annexation expectations.

Practical implications for investors and developers

1. Treat site selection as risk management

Underwrite the entitlement path, not just the market. Score jurisdictions on typical approval timelines, frequency of discretionary reviews, appeal risk, meeting dynamics, and whether recent state reforms apply.

What to do: build a short-list of “pro-housing” municipalities and focus land bids there. Price the rest with a real risk premium on time.

2. Start community engagement early

Broaden the coalition to encompass health systems, senior-serving nonprofits, employers, and faith groups to anchor the project in visible community benefits, such as access to care, safer aging in the community, and local job opportunities.

What to do: bring simple visuals, traffic and fiscal impact memos, and specific promises on design and operations.

3. Make regulatory expertise a core competency

Pair local land-use counsel with state policy tracking. Preemption reforms can unlock by-right approvals, but only if your program meets the letter of the law.

What to do: maintain a live matrix of state reforms, eligible corridors, income-mix thresholds, and parking/density rules.

4. Avoid false economies at the edge

Cheaper land on the periphery can add hidden costs. Senior living thrives on proximity to hospitals, specialists, public transportation, and daily necessities.

What to do: add a “care accessibility” test to site screening and reflect it in lease-up and rate assumptions.

5. Tilt toward buy vs. build where replacement cost is high

With permits down and starts soft, select acquisitions can beat all-in development cost. Where you do build, assume more meetings, more conditions, and longer clocks.

What to do: favor acquisitions where the all-in basis is below the estimated replacement cost. Target stabilized or light value-add communities.

A quick, forward-looking playbook

Re-rank markets by entitlement probability, not just absorption. Some Sun Belt cities now look coastal in terms of risk.
Use policy windows aggressively. If a state offers by-right treatment for qualifying projects, move first on eligible corridors.
Design for neighbors’ concerns. Height step-backs, traffic mitigation, and community space can defuse common objections while preserving project economics.