Senior Living Nonprofits Embrace Dynamic Pricing Models to Fine-Tune Rates

More senior living providers are using dynamic pricing models when determining entrance fees and resident fees based on floor plans, high-demand units and other factors, according to the Ziegler CFO Hotline Survey released earlier this week.

Nearly 80% of respondents said they use two or more factors in determining entrance fee changes, with three factors being the most common approach, according to 31% of respondents. Providers are balancing a mix of factors, including market conditions, financial considerations, operational needs and community-specific needs, according to the report.

Local home values, market demand and occupancy, along with market comparisons with competitors, were the top factors that described how operators adjusted life plan community entrance fees in 2026.

The average increase jumped to 5.6% in 2026, up from 5.2% in 2025. But that figure is expected to drop to a 4.8% increase in entrance fees in 2027. At the same time, the steepest increases are dropping, falling from 7.0% in 2025 to 6.0% in 2026 and an expected 5.0% in 2027—showing that communities known for larger price hikes are beginning to rein them in.

Several respondents in the CFO survey described using dynamic pricing models, setting entrance fees based on individual floor plans, desired units, the scope of a community’s waitlist, location and market desirability, according to the report. In this approach, high-demand units “may receive larger increases,” while pricing for units with less demand may lead to rates remaining the same or increasing less quickly.

“Taken together, the responses point to a shift away from broad, uniform fee increases toward more deliberate pricing decisions that reflect the economics, demand and value of individual units and contract offerings,” according to the report.

In 2026, respondents from single-site communities adjusted monthly fees with a 4.2% average monthly increase compared to 4% for multi-site life plan communities. Adapting to “actual operating cost changes,” along with aiming for margin improvement and adjustments for inflation, were the top three responses cited by communities participating in the report.

Operating costs and overall fiscal health are the main reasons companies adjust monthly fees. Most respondents (86.2%) look at actual changes in operating costs when setting fees, and 70.7% factor in profit margins or long-term financial stability. Inflation is another major factor, cited by 51.9% of respondents, while about half (49.7%) check what competitors are doing.

When setting entrance fee increases, the numbers vary depending on the region in which providers operate communities. Communities in the West generally had the largest increases, peaking at 6.8% in 2024 and projected to be 5.9% in 2027. The South stayed steady between 5.1% and 5.9%, while the Midwest reported an increase of 5.9% in 2026, but that is expected to moderate next year to 4.7%. For 2027, projected increases range from 3.9% in the Northeast, 4.7% in the Midwest and 5.9% in the West.

A third of respondents said they use a “tiered monthly service fee structure” that allows for varied fee rates among residents in the same unit type, but 64% of respondents said they do not use a varied approach to monthly fee adjustments.

Based on the report’s findings, 2027 projected independent living resident fee adjustments could range from no increase to 21.8%, with an average 4.3% increase in the independent segment of life plan communities.