Across the country, older Americans who earn too much to qualify for Medicaid but nowhere near enough to pay full freight for private care are getting boxed in. This so‑called “forgotten middle” is often forced to choose between aging in place in homes that no longer fit their needs and senior housing that is priced far out of reach.
A NIC‑funded analysis by NORC at the University of Chicago finds that, without policy changes, roughly three‑quarters of middle‑market seniors will not have the financial resources to afford senior housing. The same research estimates that about 11.5 million middle‑income older adults could come up short unless they sell their homes. Those findings have quickly turned into a go‑to data set for industry groups and local governments that are trying to sketch out middle‑market solutions.
Rising costs are a big part of the crunch. Genworth reports in its 2024 Cost of Care Survey that assisted living costs jumped about 10% year over year to a national median near $70,800 annually, a price tag many middle‑income households cannot handle without tapping home equity. That gap helps explain why developers and investors are scrambling for lower‑cost operating models and new financing tools.
Detroit’s Test Case: Lee Plaza
In Detroit, one emerging strategy is to turn vacant buildings into affordable senior apartments rather than leaving them as neighborhood eyesores. According to City of Detroit documents, the long‑vacant Lee Plaza on West Grand Boulevard is being renovated into about 117 affordable senior units using a mix of Low‑Income Housing Tax Credits, American Rescue Plan Act dollars and private bank and nonprofit financing. Preservation and housing advocates say the Lee Plaza project, which began construction after a 2025 groundbreaking, shows how layering public and private dollars can produce apartments that middle‑market older adults have a realistic shot at renting.
Policy Fixes And Financing Experiments
Experts tied to the senior housing and care industry say there is no single, clean fix for the forgotten middle problem. Instead, they are pushing a toolkit of financing and operating tweaks that could make projects pencil out. The Milken Institute, working with NIC, has floated ideas that include repurposing distressed senior properties, seeding revolving loan funds to lower the cost of capital and piloting pay‑for‑performance contracts so insurers and health systems help fund housing that, in theory, reduces future medical costs. Developers argue that pilots and intermediary vehicles like these are exactly the kind of “why now” tools they need to get middle‑market projects to add up on paper.
Smaller Experiments That Cut Costs
On the ground, some lower‑cost models are already getting traction at a smaller scale. Intentional co‑housing communities share meals, chores and site maintenance, which helps trim monthly living costs. In Ann Arbor, Great Oak Cohousing is a long‑running example of residents sharing work in exchange for lower housing burdens. The Cohousing Association of the U.S. highlights Great Oak as a case that shows both the social and financial upside of shared models. At the development level, modular pocket‑neighborhoods are pitched as a way to shave construction costs: a new Live Well Cottages project in Vineland, New Jersey, recently closed financing for a planned 130‑unit modular community intended to serve middle‑market seniors, according to PR Newswire…