Posts Tagged ‘Assisted Living’
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.
Tags: Aging, Assisted Living, Baby Boomers, Housing Options, Independent Living, Seniors' Housing, Seniors' Incomes
Posted in Future, Housing Market, Senior Housing | No Comments »
Tuesday, 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: Assisted Living, Baby Boomers, Housing Market, Housing Options, Seniors, Seniors' Housing
Posted in Future, Housing Market, Market Studies, Seniors' Housing | Comments Off
Tuesday, 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: Aging, American Health Care, Assisted Living, Canadian Health Care System, long term care, Medicaid, Medicare, nursing homes, Seniors, Seniors' Housing
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Friday, 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: Assisted Living, Retirement, Seniors' Housing, Supportive housing
Posted in Marketing, Seniors' Housing | Comments Off
Friday, March 11th, 2011
I have been having a dialogue with one of our clients about capture rates, sometimes called saturation rates, sometimes called penetration rates. They are calculated as the number of units of private pay service-enriched housing (supportive housing and assisted living) in a market area compared to the population over the age of 75. Years ago when CMHC first started publishing its Seniors Housing Reports (it’s hard to believe but we have them going back to 1999), I used to think about the capture rates they published as less than illuminating. I used to think: “well what if the number of seniors housing units in a market area is entirely sub-optimal?”
Back then that question made some sense. Does it still make sense?
Yes and no. We often use a saturation rate of 5% to indicate a more or less healthy market and usually that works pretty well. But there are communities that can absorb higher numbers of units without creating excessive vacancies. Kelowna for example, with a saturation rate approaching 10%. The rate in Kamloops on the other hand is a shade under 5%. Both those markets appear to be in reasonable shape.
But sadly, one of the key ingredients in this equation is the health of local markets and that is a very very hard thing to be sure about. We recently did some work in Nanaimo for example and almost every single operator reported an occupancy level of 85%. Is that just a wild coincidence?
The saturation rate in Nanaimo by the way varies from 11% if you consider the total number of units to 9% if you consider the number of occupied units. And of course that is exactly what you should be considering, if you could find out what that number is of course. I am guessing an overall occupancy level of 80%.
So Nanaimo’s saturation rate is high but Nanaimo is one of those communities that is appealing to seniors. Although the population of Nanaimo and Kamloops is almost identical, the 75+ group accounts for 8.6% of the population in Nanaimo compared to 6.4% in Kamloops.
Tags: Assisted Living, CMHC, Housing Market, Seniors, Seniors' Housing, Supportive housing
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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
Tags: Assisted Living, Housing Options, ILBC, Occupancy Rates, Seniors' Housing
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Tuesday, February 8th, 2011
Insights and Innovation: The State of Seniors Housing analyzes data from the 92 projects submitted to the Design for Aging Review (DFAR) in 2010. The report is a collaboration between the American Institute of Architects and Perkins Eastman Architects.
One of the insights of the report is that the traditional distinction between independent living and assisted living is becoming increasingly blurred “as a greater number of communities offer independent living plus services” as opposed to independent living as well as assisted living. For example, one of the winners was Sun City Palace Tsukaguchi in Osaka, a 760 unit CCRC that offers independent living with services as well as a skilled nursing facility, but no assisted living component. The continuum at this community is provided through increasingly supportive in-home care, rather than through transition to a designated assisted living environment. Another winner was the Villa at San Luis Rey, which has licensed all its units as assisted living but markets them as independent living with services. Blurry indeed!
The report explores many other fascinating issues and is available on-line at www.aia.org.
Tags: Aging, Aging in place, Assisted Living, Independent Living, Retirement, Seniors' Housing, Supportive housing
Posted in Future, Housing Market, Seniors' Housing | Comments Off
Wednesday, February 2nd, 2011
Before I get into this, I wanted to let you know that my book The Future of Seniors Housing: Planning, Building and Operating Successful Seniors Housing Projects is now available on Amazon.ca and on eBay. I know it sounds kind of weird to think about listing new books on eBay but apparently it is quite common. Eventually we will have an ebook too and I will let you know when it is available.
In the meantime, Senior Housing News (www.seniorhousingnews.com) has released its Top 10 trends for the coming year. The # 1 trend is price increases in seniors housing due to supply constraints (ie no new supply for several years), demographics, and higher labour and material costs. That seems a bit unlikely to me. Occupancy levels in IL/AL communities in the US are still below 90% and the conventional housing market has not really recovered.
Rents in Canada ARE going up though, at least in a number of communities. Others are having interesting sales events—for example, in Victoria, Holiday is offering free rent for life to one lucky winner per month until March 31st. In Calgary, Holiday is offering $95 rent for the first month and a five year rent freeze. Holiday markets to the IL market more than most operators in Calgary and has very likely been harder hit by the recession as a result.
The # 2 trend identified by Senior Housing News is renovating people’s own homes to make them more age-friendly. They base that conclusion on a report recently released by Harvard’s Joint Center for Housing Studies. The report points to a growing renovation industry In the next five years, partly because of growth in the number of households moving into the 55–64 and 65+ age ranges— when homeowners typically prepare their homes for their retirement years by making aging-in-place retrofits. The Joint Centre expects that market to be particularly strong. That’s interesting because in the past, seniors have spent very little money on adapting their homes to accommodate aging in place. I will come back to this in a later post.
Tags: Aging, Aging in place, Assisted Living, Housing Development, Housing Market, Housing Options, Independent Living, Retirement, Seniors, Seniors' Housing
Posted in Future, Housing Market, Seniors' Housing | Comments Off
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