SENIOR HOUSING MADE FOR THE REST OF US?
Developers look to create facilities affordable for middleincome aging population
As Benchmark Senior Living threw open the doors last November on a new assisted living center in Fairfield, where its founder grew up, in its home state of Massachusetts the company was one year into a different kind of senior community — one that offered rates 25 percent below that of its nearby alternatives.
Could the concept extend to Connecticut’s Gold Coast, where middleincome residents are largely priced out of assistedliving communities amid a proliferation of luxury developments?
Developers are indicating they believe the time has come.
In an April study published in the journal Health Affairs, researchers calculated that 60 percent of middleincome seniors will require some form of daily assistance for mobility needs at a minimum, but that in a decade’s time more than half of that population will lack financial means to be able to move into the modern boom of upscale assisted living centers.
Correlating the numbers used in the study with Connecticut’s population projections for 2030, and that leaves roughly 350,000 seniors on the outside of today’s assisted living centers.
It amounts to a “forgotten middle” in the words of Health Affairs, with wouldbe residents too affluent to qualify for public assistance, but lacking the resources to afford leases that can run $60,000 a year and up.
It is a circumstance that the developers building lavish senior communities have become increasingly mindful, including Tom DeRosa, CEO of Welltower, which owns the second largest portfolio of senior communities in the country.
“Because of the expense, people often enter senior housing as the last resort,” DeRosa said, speaking in June at a New York City conference sponsored by Nareit trade group that represents real estate investment trusts. “Essentially, many senior housing communities have become privatepay, skilled nursing facilities . ... The only way that many operators in the senior space can deal with this ... is by putting more people into their organizations — and that’s made it very expensive.
“At the same time, we know this product is necessary and it will become (within) reach to the middle class,” DeRosa added. “We have to figure out how to drive more affordable products. And all I can tell you is, stay tuned — we’re very focused on that.”
In Fairfield County, the large majority of assisted living centers have rates starting at $5,000 a month for onebedroom suites, as reported by A Place for Mom, a website to help people research their options.
Of about 40 assisted living centers in the southwest corner of the state, only at Watermark 3030 in Bridgeport did A Place for Mom list assisted living units in early August below that rate, though prices drop as one expands the search to communities east of Fairfield County.
At Benchmark Senior Living, the target cost is $3,300 a month for people needing assistance with basic living and medical care, with the company experimenting with a senior center offering that rate in North Attleboro, Mass. Based outside Boston, Benchmark manages 16 senior communities in Connecticut where founder and CEO Tom Grape grew up in Fairfield.
Grape was not available immediately for an interview with Hearst Connecticut Media, but at a May forum in New York City sponsored by the National Investment Center, Grape said that Benchmark is running already a senior center in Massachusetts geared toward the middle market — including with a wing for those afflicted with Alzheimer’s disease who require ongoing engagement and monitoring — with two more such homes on the way.
Residents pay a price for the lower rate in that initial building — shared quarters — but the two new homes will include soleoccupant apartments as well with prices still below prevailing market rates, Grape indicated at the NIC event.
Benchmark reduced costs by reducing staffing 15 percent — the smaller building size has helped the company cut housekeeping costs, and it has dispensed with a dining room manager — with Grape saying by “tinkering around the edges” Benchmark has been able to maintain quality of care at a lower price point, albeit with the company absorbing a 5 percent hit on its profit margin.
The building is a quarter smaller than Benchmark’s standard facilities, and is located in a bluecollar community where land costs and taxes are cheaper.
Speaking at the same forum, a Leisure Care executive said her company is also piloting a trio of middle market independent living communities priced at under $2,900 a month with a fourth on the way, and with the intent to add assisted living in the future.
Leisure Care has sought incremental savings in the kitchen, where the company installing better equipment that saves on cleaning and maintenance, and offering a more limited menu and preparing meals throughout the day to save on staffing costs by avoiding three big seatings daily.