Archive for the ‘Senior Housing’ Category

Nightmare in Nanaimo?

Wednesday, 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.

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Housing Markets

Tuesday, March 29th, 2011

Here in Canada and especially in BC we have been subject to numerous warnings that our housing markets are overheated and about to collapse, much as they have in the US. All of us in the seniors’ housing industry are very aware of the impact of falling house prices on occupancy levels. So it was interesting to read an article in a recent Economist about international houses prices and the extent to which they are over or under-valued based on the long run average relationship of house prices to rents. The most over-valued market in the world is Australia’s, where current house prices are 56.4% above that long-run average relationship. Hong Kong is a close second at 53.7% followed by France (48%), Spain (43.7%), Sweden (39.5%) and then Britain, New Zealand and the Netherlands in the 20s. Canada is well down the list at only 11.4%. The US, after years of recession, is only 3% above its long-run average and poor Japan (pre-earthquake) is 35% below. Owning has been getting cheaper in Japan relative to renting for more than 20 years.

The same issue of the Economist contains a fascinating graph developed by Robert Shiller, of the famous Case-Shiller index that tracks house prices in the US. The graph charts real house prices (ie adjusted for the impact of inflation) in the US over the period from 1890 to 2010. For most of those 120 years, real house prices stayed relatively constant, with the exception of the depression and war years, when they fell well below 100. But the graph charts an astonishing rise in real house prices starting in the late 1990s. Over the next few years real houses prices doubled before falling precipitously in the recession. As the Economist puts it: “The run-up in values was not just unprecedented, it was obviously lunatic.” It’s funny how the human race seems completely unable to avoid market hysteria, whether it’s tulips or houses.

Find the article here:

http://www.economist.com/node/18250431?story_id=18250431

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US AL occupancy slowly improving and other thoughts on assisted living

Tuesday, February 22nd, 2011

The most recent edition of Assisted Living Executive includes a chart illustrating AL occupancy levels over the period from the fourth quarter of 2005 to the third quarter of 2010. Occupancy levels fluctuated in a very narrow band between 90 and 91% from 2005 to 2007. Then the recession started to bite and occupancy levels fell to a low of 87.6% by the first quarter of 2010. They recovered somewhat to 88.7% in the third quarter of 2010.

Well you might say 88.7 to 91% is only 2.3 percentage points and that is true. But in view of the fact that there are more than 1,000,000 Americans living in assisted living units (estimate from ALFA) 2.3 percentage points means about 23,000 more vacant units in 2010 than there were in 2005.

While I was searching for that 1,000,000 number (it’s not actually units, it’s number of AL residents but I made the assumption that they are all living in individual units), I found another number on the ALFA website—86.2%. That’s the number of AL residents who pay privately for their accommodation and care. We always consider the US AL industry to be primarily private-pay so that was no surprise. But it got me thinking about AL in Canada. We have absolutely no idea how many assisted living units there are in Canada but there probably aren’t anywhere near 100,000 (using the old 10 to 1 ratio). In BC, the only province that regulates assisted living, the Office of the Assisted Living Registrar has registered over 6,700 units, 45% of them private pay. That does not mean that 6,700 people are actually receiving assisted living services because many operators register units in advance of providing services. Furthermore, no other province has provided subsidies for assisted living on the scale that BC has through the Independent Living BC program.

It seems fair to assume that BC probably has many more AL units per person over the age of 80 than any other province. If we remove the ILBC units and make an adjustment for registered units not actually providing AL services, perhaps there are 2,000 private pay AL units in BC, which has 14% of the 80+ population in Canada. Does this suggest a grand total of 14,000 AL units in Canada? When we might expect 100,000 based on US experience? Food for thought.

And for those wonderful blog readers who would like to listen to this as a pod cast please click the following link:

US AL occupancy slowly improving and other thoughts on assisted living

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My Book: A Few Steps Closer to Publication

Monday, July 26th, 2010

I have posted a couple of times about my forthcoming book currently titled The Future of Seniors Housing: Planning, Building, and Operating Successful Seniors Housing Projects. The original goal was to publish mid-year but now it’s looking more like fall. However great progress has been made over the last few months and I am feeling much less anxious than I have for a long time. There are now seven chapters in the book plus the introduction.

I have said many times that the book has practically killed me and that if I had known yada yada yada. I don’t know if that is entirely true though. I might have written it even if I had fully realized how much work it would be.  Because, as all of you who read this blog know, seniors housing is an endlessly fascinating field. It is such a cliché to describe things as labours of love, but that’s how things get to be clichés in the first place—because they are true!

So, coming soon!

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2011 Census (Reprise)

Wednesday, July 14th, 2010

As the government is still persisting in its wrong-headed plans to ruin the 2011 Census, I thought it would be useful to explain in a little more depth why the Census information is so critical for seniors’ housing analysis.

Here is an example of a table we always use when we are doing a market study or a community housing needs assessment.  Here are just a few of the things this table tells us:

  • 83% of the 55+ households in this community are homeowners.
  • The average income of the renters is $38,509 compared to $73,094 for the owners.
  • Single (non-family) renters over the age of 85 have the lowest average incomes.
  • Although not shown in the table, the detailed data indicate that there are 565 renter households aged 65+ in this community with an income lower than $14,999. These are the households facing serious challenges in terms of meeting their housing needs.

Owners

Renters

Family Hshlds

Non-Family

Family Hshlds

Non-Family

Total

Avg Inc

Total

Avg Inc

Total

Avg Inc

Total

Avg Inc

55-64

4,880

$101,729

1,030

$47,153

600

$61,629

510

$30,613

65-74

2,450

$67,633

815

$36,961

220

$41,969

405

$28,178

75-84

1,140

$63,158

1,030

$32,375

125

$35,366

265

$26,375

85+

200

$50,621

255

$24,358

60

$47,584

235

$24,220

Sadly, we will never have this level of knowledge about seniors’ housing markets in future years because all of this information comes from the long form.

For-profit and not-for-profit developers, communities, governments, market analysts—we will all be forced to guess what is going on. Tragic.

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Lowest and Highest Incomes in Canada for 65+ Households

Wednesday, July 7th, 2010

Note that this is the last time we will be able to discuss this issue, thanks to the Conservatives’ completely bone-headed and inexplicable decision to gut the 2011 Census. No other country in the world runs its Census the way Canada does, or will in 2011. It is a tragic mistake that will take years to correct. I have written to Tony Clement, the Minister who decided to gut the Census, Stephen Harper, my MP, the Globe and Mail, and all of my colleagues who rely on Census data to make sense of our world and I encourage you to do the same. I am surprised the outcry hasn’t been louder. It’s not just the seniors’ housing field that will be severely impacted of course. Please do what you can.

So for the last time for a long time, here are average incomes and rates of homeownership for 65+ households across the country. The lowest incomes are in Newfoundland and Labrador and the highest in Ontario. The proportion of homeowners is fairly similar throughout the country except for Quebec, which has a much higher incidence of renting across all age groups compared to other provinces. It’s interesting that Manitoba is the only other province with a homeownership ratio in the 60s, although average incomes are higher than the national average and house prices are comparatively affordable. Why would that be so? The only thing I can think of is that the incidence of life lease is relatively high in Manitoba. Unlike all other provinces, life lease residents are considered renters in Manitoba so that might explain the lower incidence of homeownership.

65+ Owner Household Incomes - 2

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US Occupancy Rates have Declined in 11 of 12 Quarters Since 2007

Thursday, June 24th, 2010

As we have often commented in this blog, the US is light years away from Canada in terms of the quantity and quality of available research on the seniors’ housing and health care industry. The mission of the wonderful National Investment Center (NIC) is: “To advance the quality of seniors housing and care by facilitating informed investment decisions through best-in-class data, research, networking events and professional education” and they do a great job of that.

One of the many useful things they do is track occupancy data by quarter for five categories of housing and health care—freestanding IL, combined IL, freestanding AL, combined AL, and CCRC. (Remember that AL in the US is almost exclusively private pay).

A recent NIC Newsflash points out that occupancy rates for all five categories have declined more or less continuously since the first quarter of 2007, when they reached a cyclical peak of 92.3% (on average). First quarter 2010 data indicates an average occupancy rate of 88.0%.

Assisted living performed best over the period (decline of 2.7%) and freestanding IL the worst (decline of 6.2%). CCRCs ended up in the middle with a decline of 4.1%.

This is not remotely surprising. The US housing market has been hammered over the last few years. People more able to postpone a move into service-enriched housing (i.e. potential IL residents) have done exactly that.

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Are disability rates improving? And if they are, why?

Monday, June 21st, 2010

Many people (myself included) share the view that disability rates among the seniors’ population have been declining. For example, here’s a headline from a National Association of Aging document dated May, 2001: Dramatic Decline in Disability Continues for Older Americans. And what’s the evidence? Between 1994 and 1999, the percentage of Americans over the age of 65 with disabilities declined by 2.6% per year.

In answer to the obvious question: “why”?, the article suggests several possible reasons—improvements in maternal health early in the 20th Century;  better control of infectious childhood diseases; behavioural changes such as declines in the incidence of smoking; better management of diseases such as hypertension;  better drugs; and even increases in education levels.

But a recent article in Public Policy and Aging Report suggests that declines in disability rates are due not to medical science, but to “disability-friendly” environmental changes including curb cuts, disabled access ramps and elevators, and transportation services. Improvements in assistive devices (walkers, wheelchairs, scooters) have also enabled people with mobility impairments to get around better on their own.

The Public Policy and Aging Report article is focused mostly on physical impairments that impede a person’s ability to interact with the built and social environment but it also refers briefly to the positive impact of higher education levels on rates of cognitive impairment.

It is interesting to think about this. Disability is not defined as an impairment per se, but as a “social construct insofar as it reflects the ease or difficulty that individuals with physical impairments experience interacting with the built and social environment.”

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What a Difference Four Years Makes

Thursday, June 10th, 2010

This week I am working in Stony Plain, a community of about 12,000 people 20 minutes west of the West Edmonton Mall, as these things are always described in the Edmonton area. It’s not where you are relative to downtown Edmonton, it’s where you are relative to the West Edmonton Mall.

On my way here I stopped off in Devon, a town of about 6,000 people midway between Stony Plain and the Edmonton International Airport. There are only 275 people over the age of 75 in Devon and yet there is a 61 unit supportive senior’s housing project (Discovery Place, The Heights) that has only one vacant unit. It is situations like this that keep market analysts humble.

But getting back to the topic of this blog, the current issue of the Edmonton Condo Guide includes a handy chart comparing year-to-date statistics for the four year period between April 2006 and April 2010. In terms of the sales-to-listing ratio, the trough over that period was in 2008, when the ratio was 37% compared to an astonishing 91% in 2006. Things have improved since 2008, but in the first four months of 2010 there were 12,365 listings on the Edmonton MLS compared to 5,645 sales. That’s a long way from the heady days of 2006—7,779 listings; 7,100 sales.

You can see the evidence of the hangover everywhere in Stony Plain. “Immediately available condos”, “condo units for rent”, “move in now”—signs like this are common. It’s nothing like Phoenix, but it is a bit unsettling all the same.

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Fine Dining in Long Term Care: A Contradiction in Terms?

Thursday, May 27th, 2010

Not in Phoenix! Or indeed all over the USA where fine dining in long term care is a definite trend. I toured a state-of-the-art not-for-profit skilled nursing facility in nearby Tempe AZ on Monday. I was profoundly impressed. The goal of the owner of the facility, Friendship Village, was to retain the ambience of a residential environment and avoid any feel of the institutional. Without question they achieved the goal. The hallways are gorgeous—no other word will do although it seems odd to describe a hallway as gorgeous. Unlike every other hallway I have seen in a care facility, they undulate. They are also carpeted, painted in beautiful colors, and highlighted with artwork and furniture at appropriate intervals.  Doorways are recessed. The contrast with many independent living communities I am familiar with could not be starker.

The dining rooms blew me away too— linen tablecloths and napkins! And menu choices! And open eating hours! I don’t like to overdo the exclamation marks but the facility was really unlike anything I have ever seen.

“Ah but what does all this cost?” you are no doubt thinking. Friendship Village is a life care community—residents buy in at the independent living stage and whatever care they need beyond that stage is provided at the same monthly cost. For example, a one bedroom unit may cost $160,000 (assuming no return of capital) plus monthly fees of $2,300 (meals, housekeeping, laundry etc). If someone buying in at this level were ever to require skilled nursing care, they would continue to pay the same monthly fee they paid in independent living (adjusted for inflationary increases).

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