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Consultant: operating costs rising faster than rents; modest rent increases recommended
Summary
Ehlers consultant Shane Redlaine told trustees operating costs (about 6–10%) are outpacing rent growth (0–4%) and recommended small rent increases across the portfolio to avoid revenue shortfalls.
Shane Redlaine of Ehlers told the ACHR management committee that operating costs for the senior housing portfolio are growing much faster than rents, which risks consuming available revenue if the trend continues. "Operating costs are increasing much, at a much higher rate than our rents," he said, estimating operating-cost increases in the neighborhood of 6–10% while rents have risen roughly 0–4%.
Redlaine recommended modest rent adjustments to stabilize operations: 1.5% for new leases at The Willows of Ham Lake, 4.5% for Chauncey Barrett Gardens and 3% for Savannah Oaks and The Oaks of Lake George. He also flagged that local and statewide affordable housing aid may introduce new income-verification requirements for tenants, a procedural change staff should plan for as budgets are implemented in 2027.
