Senior Living Plays Tug-of-War With Baby Boomer Expectations

The next generation of residents is already shaping senior housing, but some of the ways continuing care retirement communities (CCRCs) have been preparing for this cohort could be all wrong.

An emphasis on high-end services and amenities and, in turn, expensive price tags might put luxury living out of reach for many seniors.

Additionally, the demand to age in place has many communities tapping into the home care sector — but providers are beginning to question the effectiveness of CCRCs “without walls.”


A recent Perkins Eastman report takes a detailed look at these topics, as well as others, in its analysis of the state of senior living in the Carolinas.

Though the report focuses on these regions, most of the issues impacting the states’ CCRCs are not “terribly different” from those affecting communities around the country, says David Segmiller, the report’s author and managing principal at Perkins Eastman’s Charlotte, N.C. office.

Luxury Living: A Catch 22


While boomers’ high expectations push the demand for choice, flexibility and customization in senior housing, these preferences may come at a cost that’s simply unaffordable for aging Americans.

As part of his report, Segmiller interviewed various leaders of CCRCs and multi-facility providers throughout the two states.

And many of these providers admitted they “don’t see deep pockets in the next generation,” Segmiller says. “Will they have the means to drop a big chunk of money on a CCRC? Probably not as many as we think, but they’ll all need housing in one way or another.”

Baby boomers bear misconceptions about what it takes financially to live in a CCRC, and many lack a clear picture of the means it will take to get there, providers told Segmiller.

The average CCRC entrance fee is $271,000, according to the National Investment Center for Seniors Housing & Care (NIC). High-priced properties skew the average, though, so the median entrance fee is $208,000.

Average monthly rent for entry-fee CCRCs is $2,955; average rent for rental CCRCs is $2,752; and the overall average is $2,906, according to NIC MAP99 data as of third quarter 2014, and representative of the independent living portion of CCRCs.

Experts have previously pointed to the growing demand for affordable senior housing, noting that operators will be forced to address the needs of low- to moderate-income seniors in the coming years, as an estimated 3.5 million seniors today don’t have enough money to pay for higher acuity services.

Expensive, customizable senior living facilities may not cut it when facing a demographic that has less money to pay for those services and amenities.

“It seems to be a national trend that the boomers are not going to be as well-heeled as the generations immediately ahead of them as far as having [substantial] house value, assets, [etc.],” Segmiller says. “You’re probably going to see the development of more middle-income product for someone to go to rather than the high-end stuff we’ve been doing within the last 30 years in CCRCs.”

Many providers interviewed predicted that, within the next 10 years, there will be a drop-off in potential residents who are financially capable of moving into a CCRC due to economic issues that boomers have faced in their lifetimes.

Changing the Home Care Focus

CCRCs are increasingly looking to create continuing care at home (CCaH) programs, in which seniors in the surrounding communities around CCRCs can receive services at home as they age in place.

However, an expressed concern of providers is: If CCRCs choose to offer more and more services to the outside community, then what is stopping many potential consumers from simply staying at home?

The CCaH model, referred to by some in the industry as “CCRCs without walls,” is expected to double in number throughout the country by the end of 2015. In theory, the model serves as a means to expand an organization beyond bricks and mortar, and potentially act as a “feeder” for residents moving into a CCRC.

But providers are playing tug-of-war with consumer demand to age in place, and cost-effectiveness.

“Serving 700 seniors in their homes versus serving that number in a CCRC setting, the CCRC is way more efficient and affordable at a certain point,” Jim Petty, vice president of ACTS Retirement-Life Communities’ Mid-South Region, told Segmiller.

Another provider, Still Hopes Episcopal Retirement Community in Columbia, S.C., has invested heavily in its home care program and employs more than 140 people who deliver services outside the CCRC.

While the community sees value in extending the CCRC’s mission beyond its walls, it does not see the program as a feeder to the CCRC, nor as a huge moneymaker, Executive Director Danny Sanford told Segmiller.

In addition to offering these home care services outside the CCRC campus, some providers may struggle with on-campus boomers who will prefer to remain in independent living, without having to move up the care continuum, as is expected.

And if the CCRC can’t provide enough services for independent living residents to age in place, their money will go elsewhere.

“The answer that the providers see is being better at providing for that care in the independent living units by caregivers employed by the CCRC, rather than allowing that business to go outside the community,” Segmiller says.

Despite all the challenges in preparing for the aging boomer, providers largely see stability for the senior housing type — or at least that it isn’t going anywhere soon.

“There was also an expressed belief that the current CCRC model is a stable platform overall for senior care and shows little to no signs of becoming unstable in the near future,” Segmiller writes.

Written by Emily Study

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