The Los Angeles Times reported on the impact of the rising number residential retirement communities that are running into financial problems as a result of the downturn.
Residents in the community are often evicted and it’s becoming commonplace in California, with incidents reported at board-and-care homes in Los Angeles, Orange, Riverside, Contra Costa, Alameda, San Mateo, Napa, Yolo and Placer counties.
“California’s foreclosure crisis has severely impacted some of the most vulnerable tenants in our state — seniors who live in residential-care facilities,” Sen. Mark Leno (D-San Francisco) said during an interview with the LA Times. “These residents had no warning that they were about to lose their homes, and their families and caretakers were left in a panic to find immediate emergency housing.”
One of the first red flags in the crisis emerged from the top end of the spectrum in 2009: bankruptcies at continuing-care retirement communities, known as CCRCs. These pricey communities, which require entrance fees averaging $250,000 (some are close to $1 million), offer upscale dining, activities, entertainment and long-term care.
Facilities range from independent-living apartments to skilled nursing facilities, allowing residents to “age in place.” People typically move in when they are in good health and active; the promise, and the appeal, is that they won’t need to move elsewhere if their health declines.
In addition to the steep buy-in, residents pay monthly maintenance fees. The entrance fee is usually said to be refundable to residents or their heirs if they move or die. But that can change if a facility goes out of business.
