Boomers be­hind boom in lux­ury care fa­cil­i­ties

Tri-City Herald - - Depth - BY SCOTT JAMES

The restau­rant at Foun­tain­grove Lodge has a sweep­ing view of Cal­i­for­nia’s Sonoma County, a panorama one might ex­pect at a five-star re­sort. The grounds in­clude an im­pres­sive wine cel­lar, a spa, a bank, a fit­ness cen­ter, a movie the­ater and a large out­door swim­ming pool.

“I love the water aer­o­bic cour­ses,” said Wil­liam Baird, 71.

But Foun­tain­grove Lodge is a not a re­sort – it is a re­tire­ment com­mu­nity, part of a new breed of lux­ury sup­port­ive se­nior hous­ing. These up­scale com­mu­ni­ties of­fer a con­tin­uum of care from in­de­pen­dent liv­ing to fail­ing health, al­low­ing peo­ple to age in one place for a rel­a­tively fixed price, but with ameni­ties com­mon in ex­clu­sive ho­tels and high-end cruise ships.

Now, as the baby boom gen­er­a­tion is about to en­ter its most se­nior years, bil­lions of dol­lars are be­ing in­vested in a build­ing surge for high-end hous­ing. The in­vest­ments will test lim­its of con­sumer spend­ing in an in­dus­try where reg­u­la­tions are in­con­sis­tent or lack­ing, and con­tracts are crit­i­cized for be­ing con­fus­ing and com­plex.

The po­ten­tial mar­ket is huge. By some in­dus­try es­ti­mates, 20 per­cent of baby boomers, or about 15 mil­lion peo­ple, have saved enough to af­ford pri­vate con­tin­u­ing care, with many ex­pected to de­mand a very high stan­dard of liv­ing.

Baird and his hus­band, John Kennedy, moved to Sonoma in 2013 from San Fran­cisco. Baird was skep­ti­cal of re­tire­ment com­mu­ni­ties, but “we loved the de­sign. The qual­ity of the fin­ishes is quite good. It’s what you’d do in your own home.”

The com­mu­nity had made news as one of the first re­tire­ment com­mu­ni­ties mar­keted to older LGBTQ peo­ple, a group that gay-rights ac­tivists said has his­tor­i­cally faced dis­crim­i­na­tion at care fa­cil­i­ties. Baird and Kennedy bought a 1,800-square­foot apart­ment.

Foun­tain­grove Lodge is part of a cat­e­gory of hous­ing called a Con­tin­u­ing Care Re­tire­ment Com­mu­nity, or CCRC. In­dus­try ex­perts said there were nearly 2,000 CCRCs na­tion­wide with about 700,000 res­i­dents. Many re­quire en­trance fees and monthly charges that cover ser­vices, care and food.

“You’re ba­si­cally in­vest­ing in your fu­ture health care and fu­ture needs,” said Stephen Maag, director of res­i­den­tial com­mu­ni­ties for Lead­ingAge, an as­so­ci­a­tion that rep­re­sents or­ga­ni­za­tions and busi­nesses in the ag­ing in­dus­try. “Then what­ever you need within the con­tin­uum the com­mu­nity pro­vides will be cov­ered. So you’re ba­si­cally lock­ing in what you’re go­ing to have to pay for the rest of your life.”

Maag said the av­er­age age na­tion­wide of peo­ple en­ter­ing the com­mu­ni­ties is the low 80s. Res­i­dents tend to stay seven to 10 years.

En­trance fees av­er­age about $300,000, but in the lux­ury cat­e­gory that can be sub­stan­tially higher. En­trance fees for the largest units at Foun­tain­grove Lodge, two-bed­room bun­ga­lows, are about $1 mil­lion, with monthly charges of more than $6,000.

“Our oc­cu­pancy rate is 100 per­cent,” said Robert May, ex­ec­u­tive director, in Oc­to­ber. May said there were 100 res­i­dents and a wait­ing list of nearly 70. (The need is acute for any hous­ing in Sonoma County after last year’s wild­fires de­stroyed thou­sands of houses.)

Sim­i­lar lux­ury com­mu­ni­ties have opened or are in de­vel­op­ment in South­ern Cal­i­for­nia and Ari­zona.

Re­cently Re­lated Cos. of New York re­ported a part­ner­ship with Atria Se­nior Liv­ing, a hous­ing man­age­ment com­pany, to de­velop, own and op­er­ate $3 bil­lion of up­scale sup­port­ive hous­ing for older peo­ple in the na­tion’s top ur­ban cen­ters, in­clud­ing New York City, San Fran­cisco, Boston, Los An­ge­les, Mi­ami and Wash­ing­ton.

“For our whole ca­reers, we’ve been in the lux­ury hous­ing busi­ness,” said Bryan Cho, ex­ec­u­tive vice pres­i­dent of Re­lated Cos. “So we’re very ex­cited about chan­nel­ing all that tal­ent into pro­vid­ing the best-in-class en­vi­ron­ment for se­niors.”

Although early in the process, the Re­lated-Atria plan is to of­fer rentals and not charge en­trance fees.

Those fees can be con­fus­ing and daunt­ing, of­ten rep­re­sent­ing a large por­tion of some­one’s sav­ings or the pro­ceeds from the sale of a home. Un­like a tra­di­tional prop­erty purchase, there is no real es­tate agent ad­vo­cat­ing for the buyer, and the in­dus­try is not fed­er­ally reg­u­lated. Only 38 states have vary­ing reg­u­la­tions, and con­tracts can be com­plex.

For ex­am­ple, some­times por­tions of en­trance fees go to res­i­dents’ es­tates upon their deaths, or are re­funded when peo­ple leave. But getting those funds back could take months or years wait­ing for the unit to be resold. And there has been lit­i­ga­tion over re­fund poli­cies.

Be­cause peo­ple have lit­tle con­trol over how or when their units are resold, New Jersey re­cently passed a law that re­quired op­er­a­tors to is­sue refunds in the or­der units were va­cated. That means getting paid back “when the next unit is sold, rather than when your unit is sold,” said Kather­ine C. Pear­son, a pro­fes­sor at Dick­in­son Law School at Penn­syl­va­nia State Univer­sity, an ex­pert in CCRCs.

PHO­TOS BY PRE­STON GANNAWAY NYT

Rich Gif­ford wa­ters his gar­den at Foun­tain­grove Lodge in Santa Rosa, Calif., on Oct. 25. The com­plex is a Con­tin­u­ing Care Re­tire­ment Com­mu­nity, which lets peo­ple age in one place for a rel­a­tively fixed price. In­dus­try ex­perts say there are nearly 2,000 CCRCs na­tion­wide.

Ruth Car­ranza and An­drew Di­mas so­cial­ize Oct. 25 in a com­mons area at Foun­tain­grove Lodge in Santa Rosa, Calif. By some in­dus­try es­ti­mates, 20 per­cent of baby boomers, or about 15 mil­lion peo­ple, have saved enough to af­ford pri­vate con­tin­u­ing care.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.