As the housing market makes its way back to pre-recession levels, continuing care retirement community (CCRC) entry fees have also been on the rise, according to a Ziegler CFO Hotline report.
In fact, 65% of the 137 surveyed chief financial officers throughout the country reported that their community’s entry fee has increased in the past year. On average, these providers’ fees ticked up by 3.2% over the past 12 months, with a median increase of 3%.
Roughly 32.8% of respondents said their entry fees have remained constant in the past 12 months, while 2.2% indicated their entry fees have decreased. Of those who had decreases in entry fees, the numbers ranged from 3% to 20%, although the report notes that the number of providers offering decreases was small.
In addition, the survey also asked providers how the organization handles a second occupant in the unit, with answers carrying across contract types. Overall, 74.3% of respondents stated that there is an entrance fee per unit and also a second occupant fee if there is more than one resident per unit.
Broken down, Type C contract communities are least likely to have a second-occupant fee (52.3% don’t charge a fee), while nearly 97% of Type A contract communities have a second-occupant fee. Roughly 72% of Type B contract communities surveyed indicated they charge a fee for another occupant in the unit.
Of all providers surveyed, the most common entry-fee plan is 90% refundable, with the next most common being a 50% refundable plan. When asked to elaborate on what triggers refunding of entrance fees, 48% reported that they refund the fee when the unit is reoccupied. One-quarter of providers refund the entrance fee after a fixed time period, regardless of the unit’s occupied status.
To read the full Ziegler Hotline report, click here.
Written by Emily Study