Beth Burnham Mace's Forgotten Middle: the income band no senior-living pro forma prices for

Sixty thousand dollars a year. That is roughly what assisted living rent plus out-of-pocket medical costs run in the math of the senior-housing study the industry has been arguing with since 2019, and the study's projection is that by 2029, 54 percent of middle-income Americans 75 and older will have insufficient financial resources to pay it.

Beth Burnham Mace spent 2014 to 2023 as chief economist at NIC, the National Investment Center for Seniors Housing & Care, and still serves there as a special advisor. In 2019 she co-authored, with researchers at NORC at the University of Chicago, "The Forgotten Middle: Many Middle-Income Seniors Will Have Insufficient Resources for Housing and Health Care" in Health Affairs. The population it names sits in an income band running, in rough terms, from $35,000 to $100,000 and up a year. Too much money to qualify for Medicaid. Not enough to pay full-freight private assisted living for years on end. The study projected 14.4 million of these middle-income seniors aged 75 and older by 2029, with 60 percent expected to have mobility limitations and 20 percent to have high health-care and functional needs.

Sit with the shape of that for a second. Need concentrates in exactly the band that cannot pay.

And the finding has not aged into irrelevance. NORC re-ran the projection out to 2033, and the updated study shows the middle-market gap getting wider, not narrower, as the leading edge of the boomer cohort ages into the 75-plus band with less pension coverage and more debt than the generation ahead of it. This is a structural feature of the demand curve, and it compounds every year the industry keeps building for the top of the market.

The demand study counts heads. Mace's study says count wallets.

A standard senior-living market study works like this: draw the drive-time radius, count the age-qualified and income-qualified households, apply a penetration rate, and present the result as demand. The Forgotten Middle's contribution is to expose what the income-qualification step quietly does. The households between Medicaid eligibility and private-pay comfort, which is where the bulk of the 75-plus cohort's growth is happening, fall out of the qualified pool for market-rate product, and they were never eligible for the subsidized product either. They vanish from both underwriting universes at once. The building's most probable future residents are, by construction, absent from its rent roll.

My read is that most pro formas never model this gap explicitly. They do not have a line item that says 54 percent of the cohort cannot reach our price point. They inherit the gap silently through the qualification filter, and the filtered survivors get presented as "the market," which makes that market look simultaneously healthier and larger than it is. Healthier, because everyone counted can theoretically pay. Larger, because the penetration rate needed from a shrinking qualified pool keeps ratcheting up as the cohort's growth skews middle-income, and almost nobody re-derives the penetration assumption against the band the growth is actually in.

The gap is the market.

Why this belongs in diligence and not in a policy essay

RealClear reads entitlement records, and senior-living entitlement fights are almost never about affordability. They are about height, parking, traffic counts, and whether an assisted-living building counts as residential or institutional under a code written decades before anyone imagined the product. A developer can win every one of those fights and still have underwritten a radius full of households that cannot pay the rent the pro forma requires. The public record will look perfect. The approval will be real, the certificate of occupancy will be real, and the lease-up will stall at a number nobody in the hearing room ever discussed. Entitlement risk and demand risk are separate lines, and Mace's study is the cleanest published evidence that the second line is mispriced across an entire product category.

It also cuts the other way, and this is the part I find more interesting. A product built for the Forgotten Middle, smaller units, higher density, leaner staffing and amenity loads, is a different building, and a different building means a different entitlement profile. Density is the variable that makes middle-market economics pencil, and density is precisely what suburban hearing rooms punish. So the segment with the deepest demand pool in American housing demographics is the one whose economics require the most contested thing you can put on a site plan. Nobody should expect that fight to be gentle.

Fourteen million people is not a niche.

My bet is that within five years an explicit affordability adjustment, something that subtracts the Forgotten Middle band from the qualified-household count instead of hiding it, becomes standard in third-party senior-housing market studies, the way environmental site assessments went from optional to assumed. If 2031 arrives and demand studies are still counting age-and-income-qualified households with no middle-income gap line, I was wrong, and the capital that funded those studies will be finding out the hard way, one lease-up at a time.

Until then, run Mace's subtraction yourself. Take the qualified-household count in your radius and ask how many of those households clear $60,000 a year after the medical line. The number that falls out is the forgotten middle, and it is not a rounding error.

This analysis is a source-cited research summary drawn from public records and industry reporting, not legal advice. It can contain errors and should be verified independently before any investment decision.