Posts Tagged ‘Retirement’

The Largest Gated Retirement Community in the World

Tuesday, 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.

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The 80/20 Rule as It Applies to Seniors Housing

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.

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Primary Market Areas

Tuesday, July 26th, 2011

Historically, market areas in the seniors’ housing industry in Canada have been defined for the service enriched segment of the market. Primary market areas (PMAs) are considered to be those areas from which 75-80% of the residents of a project will come. Sometimes radiuses are used, 10 miles being a popular one as in “This is a 10 mile business”. Occasionally the 10 mile rule even works but it is a risky thing to hang your financing on. Bridges, municipal boundaries, socio-economic neighborhood characteristics, competing projects—any of these, plus dozens of other factors, can and do affect the determination of primary and secondary market areas.

And of course there is the big one, the location of children. From the perspective of market analysis it would be comforting to think that the location of children is a neutral factor when it comes to estimating demand from primary and secondary market areas because it is a difficult factor to estimate. But it is far from neutral. It may even be as important as the presence of seniors themselves in a market area. Job-generating market areas will attract more seniors than they lose, which is why Alberta attracts and retains more people over the age of 65 than BC (strange but true).

As is almost always the case in Canada, there is very little hard data indicating whether the definition of primary market areas has any basis in fact at all, beyond the research Lumina has done with the BC Senior Living Association. Operators know where their residents come from of course but there has been no systematic collection and analysis of data that shows how reliable the 75-80% estimate really is.

But things are different in the US, where the industry sees the value of research and actually spends money on it! Wow – what a concept. The most recent NIC Insider Newsletter references a 2003 study that found that 22.5% of a large sample of new residents moving to CCRCs (Continuing Care Retirement Communities) had moved from farther than 15 miles away. Results of this study have been supported, in a way, by a just-published Reuters/University of Michigan survey. Of respondents to that survey aged 70+, 20.4% said that where they live was not convenient from the perspective of where their children live. NIC sees this as supporting the results of the 2003 survey and I suppose in a very indirect way it does.

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Baby Boomers (one more time)

Thursday, April 28th, 2011

Emmylou Harris has just released a new record which, by all accounts, is excellent. Reading the reviews I learned that Emmylou, who is 64, lives with her mother, who is 89, just outside Nashville. That got me thinking, yet again, about the future housing behaviour of the boomers. Coincidentally we have been cleaning out files and found a 2005 article from Australia written by Val O’Toole called Baby Boomers Housing Demands. The article references psychologist Erik Erikson, who theorized that when people are enmeshed in one stage of life it is very hard to foresee the next. That is certainly true of the boomers—it is probably true of everyone. When you are, say, 60 and fit, how can you possibly foresee what you might want when you are 85 and frail? People are always saying the boomers will be different when they are 85 but I am not so sure. It’s one reason I am looking forward to actually being 85—finding out how the story ends.

The Australian article speculates about all the possibilities and concludes that typical older boomers, like Emmylou Harris and her mum will choose to remain in the family home no matter how inappropriate it may be. That certainly mirrors the situation in North America as well.

But that is partly a matter of options, or lack of options. Today there isn’t much choice for mobile seniors beyond active adult type housing and service-enriched type housing. There are a few cohousing communities around, but very few other examples of more communal type living arrangements. That is one area I think is going to be a much more prominent part of the landscape in future years.

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Food and grab bars

Friday, April 8th, 2011

I realize that I have posted about these two issues on numerous occasions but they are both something of bêtes noires for me.

I have been travelling a lot and have eaten at several seniors’ projects. In one of them (which will remain nameless) the food was execrable. It isn’t often you get to use “execrable” in a sentence and I would have been glad of the opportunity if it weren’t for the fact that because I couldn’t eat the food I was extremely hungry.

I mentioned this to my good friend and colleague Rita Thibault at Westbridge Group Valuation Partner and she said: “Aren’t people trained to cook decent food for large numbers of people?” Good question. One of the residents at a sister project of the aforementioned community, where the food was much better but apparently still not up to snuff, commented that if the chef really were trained at some school the school ought to be shut down.

It consistently amazes and astonishes me that operators serve such lousy food. Even in projects that are fully funded and also full of people who can’t afford to move anywhere else, you would think simple human decency would lead these operators to serve decent food.

Then yesterday I ate a community that prides itself on its food and rightly so. My lunch was delicious. Food costs here are $7.50 per person per day, which is on the high side, but not only are the residents happy, the community generates a lot of revenue by catering outside events.

Enough said about food, at least for today, and on to grab bars. I have been in two seniors communities recently that have no grab bars in the bathroom because these communities are intended for “independent seniors”. That’s just dumb. Even hotels are better than that, or at least some hotels. I am currently staying in a brand new mid-range hotel and there is not a grab bar in site although the bathtub is very high. How many people do you think actually have baths in hotels? Very few I imagine. Why don’t they install showers instead? Even if there is some logic to the bathtubs, why no grab bars? Grab bars make tubs safer for everybody, to say nothing of the one in four British Columbians who are going to be over 65 in no time flat.

So there you have it – my rants for today.

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Long term care insurance

Tuesday, March 8th, 2011

I remember having a conversation with a prominent operator of seniors housing and care communities in BC a number of years ago. We were discussing affordability and he said he was not concerned about affordability in the future because he was sure more and more people would buy long term care insurance as they came to realize the limits of public funding.

In the US however, where you might expect the demand for long term care insurance to be significantly greater than it is in Canada, the largest national insurer, MetLife, has recently dropped out of the long term care market, citing financial challengers as the reason for dropping coverage. There are four major providers in Canada and it would be interesting to know how active their business is in this field.

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More on the integration/segregation issue

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.

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Top 10 Trends in Seniors Housing for 2011

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.

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Integration or segregation of assisted living services in independent living communities

Wednesday, January 26th, 2011

I have posted about this before and there is also a section on the subject in my book The Future of Seniors Housing: Planning, Building and Operating Successful Seniors Housing Projects (now available on our website and soon to be available on Amazon etc).

The thing is, I think I have changed my mind since the book was published (that would be last month). Aha you may think, she is already cleverly planning the second edition. That’s not true although I do think about another book from time to time. What has changed my mind is talking to many people in the industry in recent weeks about the provision of assisted living services in retirement communities. The Lumina Group is working with a new entrant to the industry and it is up to us to advise him about the right strategy—he has no preconceived notions and no established model he is unwilling to deviate from. Should he plan to deliver personal care services to his residents who need them wherever in the building they may live, or should he develop a separate wing for his assisted living customers?

The book comes down on the side of the segregationist model although when you think about it, the term “segregation” has so many negative connotations that its use should immediately raise red flags. But the support for the segregationist model reflects quite specific circumstances in which the assisted living residents are really very frail and receiving significant levels of personal care—hours per day, not minutes per day. In those situations, more independent residents may feel very uncomfortable living cheek by jowl with their much frailer neighbours and as Victor Regnier has pointed out, the feelings may well be mutual. (See my book for further information, or any of Victor Regnier’s of course).

But when daily hours of care are not so extreme, most industry people we have polled strongly support integration. I will go into more detail about why in later posts. In the meantime, I am working on the second edition of The Future of Seniors Housing.

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North American seniors’ housing providers should move to Beijing!

Friday, November 26th, 2010

Last week I made a presentation at the Insight Western Canadian Seniors’ Housing Forum, held at the Four Seasons Hotel in Vancouver. One of the things I talked about was the challenge of widening the market for retirement housing. Usually we consider that a new seniors project can expect to appeal to about 5-10% of the 75+ population in any given market area. Some markets can be higher but most are not.

That’s partly because most seniors aren’t all that keen about the idea of moving to seniors’ housing, which is why we often describe the industry as “need driven” as opposed to “want driven”.  Surveys done by various organizations such as the AARP inevitably find that 95% of survey respondents want to stay right where they are as they age.

Which brings me to Beijing. A recent survey of more than 4,000 people conducted by the City of Beijing found that almost 25% of them planned to move to seniors housing, “a far higher level than the 4% the City had expected”.  Just a little over half the respondents (53.3%) expressed a desire to stay where they were until they died, in very sharp contrast to the 90% the City had expected. On the flip side of the coin, 99% of young respondents to the survey said they would not be able to care for their parents in old age, which could have something to do with the preferences expressed by the elderly themselves.

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