Many seniors have expressed their desire to age in place and remain in a familiar environment and friendly community, AARP studies show, and now a fairly recent phenomenon that seeks to promote just this is emerging in the shape of senior co-housing communities. The philosophy of co-housing is simple, says a recent Sacramento Bee article: Share and share alike.
For proponents of this concept, says the Sacramento Bee, co-housing offers not only the connection of small communities where everybody knows the neighbors, but also the ability to share responsibilities equally, rather than be controlled by an administration. According to the Cohousing website, the concept came from Denmark in the early 1980s; communities can range in size from 7 to 67 residences, with the majority of them housing 20 to 40 households.
These communities, whose demographics can be intergenerational in addition to seniors-only, consist of individually-owned residences centered around a common house or community space. Residents work together to care for common areas and gather at least a few times per week for optional community meals. The increasing emergence of co-housing communities as an alternative approach to aging in place may be appealing to the baby boomer generation as they reach retirement age, says the Sacramento Bee.
Residents of a senior co-housing community that opened in 2005, Glacier Circle Community, pioneered the way for seniors-only co-housing in the United States, says the Sacramento Bee, and according to the Co-housing Association of the United States, at least a dozen similar communities are underway throughout the nation.
Take, for example, Sacramento, Ca.-located Wolf Creek Lodge, a senior co-housing community that’s currently in development stages. Upon its expected completion and opening next summer, the 30-residence construction will be the fourth senior co-housing community in the United States.
“This is a bunch of people who want to stay in charge,” says Katie McCamant, an architect with Nevada City’s Co-housing Partners, the company that’s building Wolf Creek Lodge and, reports the Sacramento Bee, the company that brought the concept of co-housing to America from Denmark, where it originated. ”They’re not looking for other people to manage things. They want to determine what they need, and they don’t want to live somewhere that someone sets up craft time at 2.”
However, the article continues, not everyone thinks senior co-housing is the best thing since sliced bread. Andrew Carle, the director of George Mason University’s senior housing administration program, likens senior co-housing to communes and doubts it will garner widespread participation.
“The first-generation communes disappeared because of the fanciful idea that we’ll all live together in peace and happiness and help each other. We tried this. It’s easier said than done,” says Carle in the Sacramento Bee article. “I’m in favor of any type of new housing for seniors. Co-housing gets press as the next big thing, but I don’t think it is. It’ll be a small niche for some people, for whom it will work really well.”
With elder caregiving placing a $3 trillion drain on adult children’s wallets, and AARP reporting that 89% of Americans wanting to stay in their homes as long as possible, the idea of co-housing for seniors might hold significant appeal for some. Whether or not this trend catches on, however, remains to be seen.
Written by Alyssa Gerace
While some are having success with co-ops for seniors housing, the developments are not widespread according to a report from National Real Estate Investor.
However, in Minnesota’s Twin Cities, United Properties has found a niche with the developments.
“Co-ops have been around in the Twin Cities for about 30 years,” says Brian Carey, senior vice president at United. “The co-op has proven to be a stable real estate asset.”
Most co-ops are found in the Midwest, where a sense of community is important says NREI Online. Similar to the co-ops often found in Manhattan, the units are different because they have age restrictions. Senior co-ops also often limit the resale price of the units, a feature that potential buyers find attractive. “There are no speculators creating a bubble like we saw with condos,” says Carey.
The drop in home values has created a challenge for United, who says there has been no shortage in people interested in moving into the units, but selling their homes is the challenge.
Even so, Carey notes that vacancies overall are less than 2%. Even during the downturn, small units have not been the best sellers. The most popular unit is still the two- bedroom, two-bath apartment with a den. “Residents are moving from a house and they want space,” notes Carey.
A proposed rule from The National Labor Relations Board (NLRB) will create additional costs and burden employers if passed according to the Assisted Living Federation of America.
Last week, the NLRB proposed a rule that would dramatically reduce the timeframe between the filing of a petition for union election and the actual date of the election. The NLRB says the amendments are intended to reduce unnecessary litigation, streamline pre- and post-election procedures, and facilitate the use of electronic communications and document filing.
“One of the most important duties of the NLRB is conducting secret-ballot elections to determine whether employees want to be represented by a labor union,” said Chairman Wilma B. Liebman in a statement. “Resolving representation questions quickly, fairly, and accurately has been an overriding goal of American labor law for more than 75 years.”
Groups like the Service Employees International Union (SEIU) have been making a push to organize senior living groups said Rick Grimes, President of ALFA during an interview with SHN.
The trade group says such moves are not appropriate in the senior living industry. ”It creates additional costs and a burden on employees and consumers,” said Grimes.
ALFA says the proposal will significantly restrict an employer’s ability and right to communicate with their employees and deprive employees of critical information needed to make informed decisions regarding whether they wish to be represented by a union.
“The rules if adopted will also empower unions to more frequently conduct ambush campaigns,” said Paul Williams, senior director of government relations for ALFA. ” In many organizing campaigns, especially those directed at small businesses, ambush elections are often conducted months prior to a petition being filed.”
Should the rule be adopted, businesses will not have adequate time to properly respond to the campaigns says ALFA.
NLRB says that union elections take too long, while its annual report says median time for an election (from the time a petition is filed to the vote by employees) is 38 days. Over 90 percent of all union elections occur within 56 days.
Summertime is shorts weather, but we’re not talking about the “Bermuda” type. In the spirit of summer reading, I just finished “The Big Short” by Michael Lewis, author of the books “Liar’s Poker” and “The Blind Side.”
For those who have not read “The Big Short”, it examines different business people taking short positions against the subprime mortgage market, increasing home values and the other financial products and companies that were components of the housing market prior to the financial criss. After completing the book, it became apparent that some of the characteristics of the senior housing market resemble those of the broader housing bubble during the last 10 years.
When looking at the characteristics of the aging population, do the facts make the senior housing trade look too good to be true?
Even with the demographics and the socio-economic profile of the senior and baby boomer population, is investing in senior living a wise choice by default? While there are some some uncertainties that remain, will we start to see more of the “build it and they will come?” scenario? Or how about looser margin and ratio requirements on underwriting standards just because the need is inevitable? What about a pro-forma budget from an inexperienced developer/operator/investor…sounds like a stated income or NINJA loan to me.
While the hope is that we’ve learned our lesson, let’s take a quick look at the long trade of senior housing:
With all these long positions, who takes the other—short—end on the trades? Someone who thinks that seniors will ultimately stay where they are or simply cannot or refuse to sell their homes at discounted prices? How about those D-I-Yers who will take care of Mom and Dad in their Granny Pods or Granny Flats or additions to their current homes? Does shorting senior housing sound as crazy as shorting the housing market and the subprime mortgage market did back in 2005 and 2006 when housing seemed it could do nothing but go up?
There are always two sides of every trade. For those who are long senior housing and living, the bet with the demographics over the next 25 years looks like easy money….almost as easy as a 10% annual return each year from 2000-2007 on your house.
Oak Grove Capital announced it originated $16 million of fixed-rate permanent financing through its Fannie Mae DUS program for the Isle of Watermere, a senior housing community owned by South Bay Partners.
Based in Southlake TX, the Watermere is a 92-unit community consisting of 66 assisted living units and 26 memory care units. Managed by Life Care Services, the property was completed in 2008 as the initial phase of Watermere at Southlake Community, a master-planned gated community developed for individuals age 55 and older.
The financing from Oak Grove Capital was made for a 10 year term 30 years of amortization and will be used to refinance maturing mortgage debt.
“Oak Grove Capital gave us very competitive terms and was able to follow through in a difficult credit environment,” said Craig Spaulding, Founder of South Bay Partners. “The closing process was very organized and streamlined. Oak Grove Capital’s team was proactively on top of all components throughout this transaction and we look forward to working with them more in the future.”
Heidi Brunet, vice president in Oak Grove Capital’s Senior Housing and Healthcare Group, originated the loan. The group specializes in financing seniors housing communities using a variety of lending programs.
The Office for Budget Responsibility released a report this week that showed the UK may need additional austerity measures to combat the rising costs of healthcare and pensions for its 65+ population. The number of individuals over 65 is expected to account for nearly 26% of the country’s population by 2061 compared to 17% today. The OBR’s analysis estimates that the national data will rise to 107% of gross domestic product (GDP) in the next 50 years versus 60% of GDP today.
With a lower economic growth outlook, the report finds that spending other than on debt interest rises from 36.3 per cent of GDP at the end of its medium-term forecast in 2015-16 to 41.7 percent of GDP by 2060-61, an increase of 5.4 per cent of GDP or £80 billion in today’s terms. The report stops short of calling for specific cuts or tax increases but raises the concern that longer-term policies will need to extend further beyond one time increases.
“if future governments accommodate these demographic pressures on spending, they are likely to have to tax more or spend less elsewhere to keep thepublic finances on a sustainable path. But this does not necessarily mean increasing the size of the already substantial fiscal tightening planned for this Parliament. This is a familiar story in many industrial countries,” said Robert Chote, Chairman of the OBR as part of his prepared remarks.
Concordia Lutheran Ministries announced the acquisition of two senior housing facilities from Sunrise Senior Living for an undisclosed sum on Wednesday.
Located in Pennsylvania, Sunrise of Cranberry and Sunrise of Fox Chapel were approved by Concordia’s Board of Directors to further enhance opportunities for Concordia’s mission and future.
The Cranberry location is a licensed personal care home and consists of 60 units with 84 beds and Fox Chapel is a memory care senior living community and has 46 units with 58 beds designed to care for those with memory disorders.
“We are looking forward to the opportunity to serve more and to serve better. Both facilities are in remarkable condition and will support our growing continuum of care,” said Concordia President and CEO Keith Frndak. ”We believe these facilities are great additions to the Concordia Lutheran Ministries family and will easily be supported by Concordia’s other services.”
With the new locations, Concordia said it will have a total of 622 personal care beds and 70 memory support units.
New data from the National Investment Center for the Seniors Housing & Care Industry shows occupancy rates continued to gain traction during the first quarter of 2011.
Occupancy during 1Q11 reached its highest level in two years, coming in at 87.9% and marking the fourth consecutive quarter of increases according to NIC. The recovery is beginning to reach more metropolitan markets as well, with 20 of the top 31 markets showing occupancy increases. Eight metropolitan markets decreased, with the remaining balance unchanged.
“The markets experiencing occupancy recoveries are generally those markets that had experienced larger occupancy declines and therefore are lower occupied than markets that proved more resistant to such significant declines,” said NIC in a statement.
As of 1Q11, the average occupancy rate for the metropolitan markets in which occupancies increased from the prior quarter was 87.4%, which compares to 88.9% for the metropolitan markets in which occupancies declined this quarter.
By Robert Blancato
A new government report found that the President’s healthcare law has saved seniors $38 million in drug costs this year. Those are welcome savings to elderly patients across the country still struggling with the recession. These drug savings come from the health law’s provision phasing out the “donut hole” in Medicare’s Part D prescription drug benefit. The donut hole is a chasm in coverage between the program’s upper spending limits on a patient, and the total at which emergency medical insurance kicks in. Previously, while in the donut hole, Medicare beneficiaries had to bare 100 percent of the costs of their drugs.
This year, the health law drops donut hole drug costs by 50 percent. That $38 million in savings averages out to $800 per Medicare enrollee.
The law also helps seniors by providing a one-time $250 rebate to all Medicare patients that fell in the donut hole last year. To date, nearly 4 million people have received a check. And the law gradually expands generic drug coverage in Medicare over the next decade.
This reform makes a very successful public healthcare program even stronger. Part D has cost the government dramatically less than initially anticipated. Last year the Centers for Medicare and Medicaid Services dropped its 10-year cost estimate for the program by an astonishing 43 percent, from $643 billion to $373 billion.
While health insurance premiums overall have been skyrocketing, Part D premiums have remained affordable. The average monthly premium for the program is just around $30. By bolstering Part D by closing the donut hole, the President have given seniors even more savings on the medicines crucial to maintaining their health.
As much as seniors have benefited from the healthcare reform law thanks to the changes to Medicare Part D, many are concerned about another change to Medicare — the establishment of a new agency called the Independent Payment Advisory Board (IPAB). Consisting of 15 presidential appointees, IPAB is empowered to make cost-cutting recommendations for Medicare every year the program exceeds preset spending targets, starting in 2014. Without congressional action, IPAB’s recommendations automatically become law. And they’re exempt from administrative review.
While the Board’s powers are limited, it can still make some major policy changes, including slashing physician reimbursement rates and constricting coverage schemes for drugs and other treatments.
Instituting real cost-cuts in Medicare is a must; the program is expected to go bankrupt by 2017 without reform. But, despite the good intentions, IPAB isn’t the solution. The Board is effectively unaccountable to the American public. Seniors hurt by its policy decisions have no legal recourse.
The responsibility for reforming Medicare must remain with Congress. Giving distant, unelected bureaucrats huge powers over the program is too dangerous. And, for the first time in long time, members of both parties appear to fully appreciate the program’s problems and have indicated they’re willing to work together to keep it solvent without compromising senior care.
Fortunately, there’s bipartisan legislation moving forward to repeal IPAB. Members of both parties — and a host of hospital, physician, patient groups, and aging groups — have expressed concern about IPAB.
The administration should shift course and support these efforts. Otherwise, IPAB could undermine the great benefits seniors will enjoy thanks to the Medicare Part D reforms.
Robert B. Blancato is the executive director of the National Association of Nutrition and Aging Services Programs. He is also the National Coordinator of the Elder Justice Coalition.
The Center for Excellence in Assisted Living (CEAL), and the University of North Carolina at Chapel Hill (UNC), recently released a report on seminal person-centered attributes and indicators, developed and approved unanimously by CEAL through an initiative funded by The Commonwealth Fund.
“The creation of person-centered attributes along with measurable indicators developed by diverse national assisted living experts is critically important to inform the Affordable Care Act (ACA) legislation,” said Sheryl Zimmerman, Ph.D., Kenan Professor and Co-Director of the Program on Aging, Disability, and Long-Term Care at the Cecil G. Sheps Center for Health Services Research at UNC. “They clarify the distinction between the ACA’s mandated person-centered practices as opposed to institutional practices that will no longer be funded by CMS.”
CEAL states its belief that person-centered outcomes are a “major underpinning” when it comes to advantageous assisted living practices and care; if a service plan and the way it’s carried out is focused on person-centeredness, then generally it will be able to carry out the basic guarantees of assisted living that include maximizing privacy, autonomy, and choice; helping to foster meaningful life, engagement, and quality of care; and supporting meaningful access to the surrounding community.
The next step for CEAL and UNC, says the Center, is their plan to conduct field research to test and validate the person-centered attributes and assisted living indicators detailed in their report. CEAL calls these “important and timely steps” that are necessary in order to confirm that assisted living practices and national and state policies have a strong foundation of evidence-based information.
Written by Alyssa Gerace
