Senior Housing Blog

Posted by kmancer on November 27th, 2009

Welcome to the Lumina Services Senior Housing and Health Care Blog. Our hope for the blog is that it provides a forum for discussion about the very wide range of topics we are interested in.

Posted in Senior Housing | Comments Off

Happy Holidays to our Faithful Readers

Posted by kmancer on December 23rd, 2011

We have been letting our faithful readers down recently and I apologize for the scarcity of posts over the last few weeks. We will do better in the new year. A few topics lined up for comment include the future of Canada’s housing market based on some interesting data from the Conference Board; anti-anxiety medication (I hope I have piqued your interest with that one); seniors living in poverty (a bit of a rant coming up); geographic mobility of Canadian seniors, a subject in which I have an unhealthy interest; and more on the boomers, a subject that will never die until all of them do.

So stay tuned and in the meantime, have a peaceful and happy holiday season.

Tags:
Posted in News | No Comments »

Nightmare in Nanaimo?

Posted by kmancer on December 7th, 2011

A recent article in the Nanaimo Daily News about seniors housing suggests that the average Nanaimo senior can afford 37.5 months of assisted living. And after that? The article leaves it to your imagination. Ice floes maybe?

But perhaps the situation is not as dire as the article suggests. For example, the average cost of assisted living per month is indicated to be $6,000. The average sale price of a condo in Nanaimo is indicated to be $225,000 resulting in the aforementioned 37.5 months.

Where exactly the reporter found that $6,000 unit is a good question. I have never heard of a $6,000 assisted living unit in Nanaimo. And most people who move to a retirement community don’t need assisted living anyway—they need housing that provides meals, housekeeping, laundry etc but they don’t need the level of care provided in assisted living.

According to CMHC, the average cost of an independent living unit in Nanaimo (one that provides meals, housekeeping, laundry etc) is $2,553—a long way from $6,000. And many people don’t move from a condo to seniors housing—they move from detached houses, the average value of which in Nanaimo is currently $356,000. And people use their income to finance their monthly housing costs, not just the proceeds of house sales. The article says the average after-tax income for 65+ people is $25,996. In fact, the average income of all 65+ households in Nanaimo is $46,471; of owners is $50,334 (80% of 65+ households in Nanaimo are homeowners).

All this is not to say that low income seniors, especially renters, don’t face serious housing challenges. They do. But to scare people by saying that the average senior in Nanaimo will only be able to afford to stay in a seniors’ community for 37.5 months is highly misleading. What is needed is a mix of options, ones that take into consideration peoples means before lumping them all together into one big pot of seniors.

Tags: , , , , , ,
Posted in Future, Housing Market, Senior Housing | No Comments »

90 is the new 80

Posted by kmancer on November 29th, 2011

In case you haven’t been keeping up, 90 is the new 80 or more precisely, 90 is the new 85. A recent report from the US Census Bureau (I know what you are thinking—why doesn’t she ever reference Canadian data in her posts? Because there isn’t any is the short answer to that question.) points out that among the seniors population as a whole, the 90+ group has been growing the most rapidly. When all of the baby boomers reach the age of 85 (in 2050), 2% of the US population will be 90+ which is pretty amazing if you stop to think about it. That is a lot of 90 year olds.

What are today’s 90 year olds like?

• Women outnumber men 3 to 1

• 6% of the women are married; 43% of the men (which is one of the big reasons that the vast majority of the residents of seniors housing communities are women—not only do they live longer, they are much more likely to be alone.)

• The likelihood of living in a nursing home rises from 20% between 90 and 94 to 31% between 95 and 99 to 38% for those over 100. These ratios are probably lower than what many people would expect. I usually quote a ratio of 35% of the population over the age of 85 living in nursing homes in Canada but either my estimate is wrong or there is a much higher incidence of institutionalization in Canada. We will try and check this out.

• Not surprisingly, people living in nursing homes have more disabilities than people living in the community although overall, the differences aren’t huge—98% of nursing home residents have disabilities (I don’t know why it isn’t 100%) compared to 81% of people living in the community. But there are major differences in a couple of categories—trouble remembering (73% versus 30%) and needing help with activities of daily living such as bathing and dressing (85% versus 35%).

Tags: , , , ,
Posted in Future, Seniors' Housing | Comments Off

US Market Improving (slowly)

Posted by kmancer on November 18th, 2011

I know I do go on about the US market, but I find it endlessly fascinating. Of course that’s partly because there is so much data on the US market. We have so little data in Canada that it is usually quite difficult to figure out what’s going on.

The chart below, courtesy of NIC, shows a steady improvement in occupancy levels in independent living (IL) and assisted living (AL) communities in the US since the seniors markets bottomed out in the first quarter of 2010. It’s interesting though, or maybe depressing is the better word, to think about how long and how deep the slide has been, really since the latter part of 2006. Not only that, over the same period of time the 75+ population in the US increased by over 800,000 people. To put that number in perspective, in Canada there are a total of just over two million people over the age of 75.

US Occupancy Rates

So while things are getting better, they are still a long way from good, thanks largely to the still extremely sluggish US housing market.

Tags: , ,
Posted in Housing Market, Seniors' Housing | Comments Off

Transforming Institutional Long Term Care

Posted by kmancer on November 8th, 2011

To most people in the field “institutional long term care” is a redundancy. If it’s long term care, it’s institutional.

But a movement in the US, called the Green House Project, is aiming to change all that. And it’s not green as in sustainability, it’s green as in grass, plants, gardens, the outdoors.

Here is a brief description from the web site:

‘The Green House residence is designed to be a home for six to ten elders. It blends architecturally with neighboring homes, includes vibrant outdoor space, and utilizes aesthetically appealing interior features. Each elder has a private room or unit with a private bathroom. Elders’ rooms receive high levels of sunlight and are situated around the hearth, an open kitchen and dining area. While adhering to all codes required by regulations, Green House homes look and feel like a home, and contain few medical signposts.’

To anyone familiar with modern care facilities in Canada and their associated regulatory frameworks, such a model seems impossible. But lots of research shows that not only is the Green House Project possible, it delivers better outcomes than traditional skilled nursing facilities and it doesn’t require any more staff resources. Many green home communities are now operating throughout the US although I have never heard of one in Canada, not surprisingly. It took us 10 years to catch up to the US in the assisted living sector.

We have lots of questions about this model as you probably do too. My first question is: how frail is too frail, physically and mentally, for a Green House client? We’ll find out and let you know in future posts.

Tags: , , ,
Posted in Future, Seniors' Housing | Comments Off

Construction activity down but prices at high end up

Posted by kmancer on November 4th, 2011

The National Real Estate Investor just reported that 14,942 units of private pay service-enriched and skilled nursing facility beds are under construction in the US. That’s up modestly year-over-year although well below pre-recession levels. But it’s way below the peak of 1998, when an astonishing 57,800 similar units were under construction. Of course a lot of those projects eventually went broke thanks to over-supply in many markets. I wonder what the Canadian situation is? Sadly, no one has any idea.

But prices for high end US projects have been climbing steadily since the recession. Reports from NIC and Real Capital Analytics indicate that in the first quarter of 2008, the top 25 percent of project prices was about $169,000 per unit. That number fell to about $101,000 a unit by the fourth quarter of 2009. Prices for the properties in the top quartile have increased since then to $170,141 per unit. That’s a big jump.

One of the transactions highlighted in the report is in Raleigh North Carolina. Prudential Real Estate Investors sold the project in 2004 for $29 million and just bought it back for $53 million from the same company they sold it to. Some improvements were made in the meantime (eg 14 cottages added) but it sounds on the surface like a very good deal for the interim owner.

Tags: , ,
Posted in Housing Market, Seniors' Housing | Comments Off

Lumina Group Newsletter Imminent!

Posted by kmancer on October 25th, 2011

It’s been a long time coming (also one reason why there’s been a little bit of a drop off in my posting) but we will be in a position very shortly to launch our newsletter, called, perhaps a little unimaginatively, Industry Insights.

We have actually produced the first issue, focused on affordability in service-enriched housing environments. My colleague Carol Omstead and I have endless debates about this issue, focused on just how important affordability is in the grand scheme of things. That may sound ridiculous at first blush but remember that the private pay service-enriched sector appeals to a very small proportion of its target market—somewhere between 5% and 10% in most market areas. A very large proportion of the other 90% can afford what we are offering so to what extent will a more affordable product widen our target market? I think that is a very good question.

The first issue also lists 24 very exciting topics we will be addressing in future issues, ranging from operating expense ratios (how are YOU doing relative to industry norms?), to acquisition versus new construction analysis, to turnaround strategies for underperforming projects. And everything in between!

The details of how to get on the distribution list for the newsletter will be available within a week or two.

Tags: , , , , ,
Posted in Future, Housing Market, Market Studies, Seniors' Housing | Comments Off

Numbers: Canada vs. US Nursing Homes

Posted by kmancer on August 16th, 2011

A recent study published by Brown University (July 2011 edition of Health Affairs) shows that between 1999 and 2008 the nursing home population in the US shrank by just over 6% while at the same time the population over the age of 70 increased by just over 8%. The shift is attributed largely to the growth of alternatives such as assisted living.

Here’s another interesting thing to note—in Canada, there were 250,000 nursing home residents in 2008/2009. In the US in the same year there were 1.2 million. Using the standard 10 to 1 ratio suggests that there are twice as many people in Canada in nursing homes as there are in the US on a per capita basis. That is undoubtedly due in large part to the lack of Canadian alternatives, assisted living in particular. Assisted living in the US is almost entirely a private pay phenomenon and when it comes to care, no matter how light, Canadians do not like to pay for it. As a result, the private pay assisted living market in Canada is a very thin one.

On the surface, the impact of twice as many nursing home residents and very few assisted living residents would seem to result in much higher public expenditures in Canada for the elderly compared to the US, particularly in light of recent dramatic cuts to US Medicare and Medicaid budgets (11% reductions). And maybe that is as it should be, although it seems inevitable that Canadian public expenditures on the elderly are going to be spread much more thinly in the future than they are now.

Tags: , , , , , , , , ,
Posted in Future, Seniors' Housing | Comments Off

The Largest Gated Retirement Community in the World

Posted by kmancer on August 9th, 2011

I have been engaging in a bout of summer cleaning—trying to create breathing space in my usually very cluttered office. I can’t remember what clutter means from a personality perspective but I am feeling very smug about the order I have brought to a certain amount of chaos.

Part of the process involved going through piles of paper I always meant to get back to. One item in the pile was the Winter 2009 edition of Public Policy & Aging Report, which contains an article about The Villages in Florida, the largest gated retirement community in the world. It must also be the largest ungated retirement community in the world—it spans three counties, two zip codes and more than 20,000 acres. The dozens of villages are home to a total of more than 75,000 people (as of Winter 2009) with room for 35,000 more. Sun City Arizona in contrast is home to only 40,000 people.

To keep those 75,000 people amused, The Villages offers two downtowns, several shopping centres, dozens of pools and shopping centres, hundreds of hobby and affinity clubs, and 36 golf courses. How could they fit all that into 20,000 acres? 20,000 acres is just over 31 square miles so I guess it’s easy.

If all this sounds faintly horrifying to you, the same thought occurred to the author of the article (Andrew Blechman) so he set out to see for himself. What he found went beyond faint horror—his article makes The Villages sound like something right out of science fiction or George Orwell or both. He wrote a book about The Villages, called Leisureville: Adventures in America’s Retirement Utopias.

It all reminded me a bit of a local “utopia,” Arbutus Ridge on Vancouver Island. I recently tried to tour Arbutus Ridge when I was doing some work nearby. Not possible—you have to get written permission in advance from a higher authority than the security guard at the gate. The very first page of the Arbutus Ridge web site contains the following sentence, in bold.

A key attraction of our development is the security provided by a gated community design and our “24/7/365” security staff.

I am probably sounding a bit judgemental about all this. After all we are constantly saying in the industry that what we need is choice so that there is something for everyone. But withdrawal from civil society may go beyond the pale.

Tags: , , , , ,
Posted in Future, Seniors' Housing | Comments Off

The 80/20 Rule as It Applies to Seniors Housing

Posted by kmancer on August 5th, 2011

I have always wanted to improve my time management skills—who doesn’t? So I bought a couple of books, The 80/20 Principle by Richard Koch being one of them. The 80/20 Principle basically says that 80% of your outputs result from 20% of your inputs. The principle works in all kinds of ways, even in the criminal word. Apparently 80% of the crimes are committed by 20% of the criminals.

(In the US the 80/20 rule also refers to the Federal Fair Housing Act as it applies to communities that are designated for seniors—at least 80% of the units must be occupied by someone over the mandated age, 55 or 62 or whatever.)

So all this got me thinking about the world of service-enriched seniors’ housing and how the rule could be applied there. Here are some possibilities:

• 80% of resident satisfaction is attributable to 20% of operational efforts.
• 80% of food satisfaction is due to 20% of menu items.
• 80% of profits is due to 20% of effort.
• 80% of positive word-of-mouth marketing comes from 20% of residents.
• 80% of complaints come from 20% of residents.
• 80% of internal productivity advances are suggested by 20% of employees.
• 80% of new residents come from 20% of marketing efforts.

Operators who are able to figure out the 80/20 distribution in their communities are in a position to make a huge contribution to resident satisfaction as well as to the bottom line. After all, if the principle works in the world of crime, it must certainly work in the world of seniors’ housing.

Tags: , , ,
Posted in Marketing, Seniors' Housing | Comments Off