Too Many Seniors Are Priced Out of Seniors Housing

by Jeff Shaw

Development, design strategies can allow for high-quality senior living on a budget.

By Russ Garber, Andrew Piletz and Nicole Boyer

Ninety-year-old Lee Wachtstatter has been in the news many times over the last few years, as reporters have covered her decision to avoid traditional senior living facilities and instead live permanently on a cruise ship after the death of her husband.

There are a number of remarkable things about Ms. Wachstatter’s decision, but perhaps the most eye-opening is the fact that the cost of her seagoing lifestyle is, by many accounts, less than what it would cost her to live in an upscale assisted living facility.

For most seniors and their families, senior living facilities are the only realistic housing option. Unfortunately, for many seniors, the cost of a high-end facility is well outside of their means. Nationally, average monthly rental rates are around $4,000, and that number can reach as high $7,000 in some circumstances.

For seniors without substantial assets, the only financially viable option is to stay in their home as long as possible or select a more affordable or subsidized senior living facility. The tradeoff, sadly, is that the quality of the facility and the quality of care suffers as a result.

Consequently, there is a sizable demographic of seniors with no good options when it comes to living and lifestyle choices.

Happily, a few forward-thinking innovators are working to address this issue, designing and operating an entirely new genre of facility.

A new template

In Hilliard, Ohio, The Ashford at Sturbridge, a new 124-unit facility, is a prototype for this new category of value-driven senior housing. Accessible for seniors with moderate retirement savings and a limited retirement budget, The Ashford at Sturbridge promises affordable assisted living without compromising the quality of care or the experience of residents.

The facility promotes its “beautiful accommodations, regular socialization, and quality care,” and aims to effectively fill that mid-ranged gap in the senior living marketplace.

Is it working? If the results of The Ashford at Sturbridge’s predecessor and sister community, The Ashford on Broad in Columbus, Ohio, are any indication, the answer is a resounding yes. The Ashford on Broad was rated No. 1 in resident satisfaction in Columbus in 2017, while coming in at 32 percent below the average cost of comparable facilities.

So, it can be done. But how?

Development differences

The design and development differences between traditional senior living facilities and value-driven options start early in the process.

It’s important to be thoughtful, strategic and creative when it comes to site selection. The goal is to identify communities and opportunities that aren’t necessarily in the middle of the current hot market, but are instead adjacent and accessible to that market.

Controlling the fixed-cost piece of the development equation to the extent that you can is an important part of making the math work for value-driven senior living facilities. Taking advantage of tax abatements and other incentives is another way to help contain costs.

Make an effort to work closely with all parts of the community, including civic leaders, city council members, planning and zoning officials, building inspectors, the fire department, etc. Reach out to every group that has a voice early on in the process. Help them understand the product and the need.

Design strategies and best practices 

You cannot sacrifice the level of care and the experience for residents to save a few dollars. Senior living isn’t a place you go to die, but a place you go to live — and live well. So where can you find ways to save?

Make it count: The Ashford at Sturbridge offers a mix of waiver and private pay units. While housing units offer comparable square footage to higher-price-point options, they are keeping overall expenses down with strategic/programmatic decisions regarding where to spend and save.

Money was spent on high-cost, high-impact products that are long-lasting or can’t be easily replaced like carpet, cabinets and flooring. Money was saved by installing laminate counters in lieu of granite and paint in lieu of wall coverings. Leveraging buying power at scale yielded additional savings, and energy-efficient features reduced utility costs.

Use amenity alternatives: Be cognizant of the amount of amenity space. Reducing the raw square footage can make a big difference in cost. But make slightly smaller spaces feel bigger with raised ceiling heights, or rooms that offer daylight from two sides. And compensate for slightly more compact community spaces with engaging programming and more high-touch service elements. The Ashford at Sturbridge offers full table-service dining, for example, with menus and cooked-to-order meals.

Utilize a compact design: Strive to make travel distances for residents within the facility as short as possible. An H-shaped footprint is one way to do that. A more compact design is less expensive to build and maintain, and makes it easier and more enjoyable for residents to move between their residential units to dining and amenity spaces.

Sweat the details: Every little detail matters when trying to cut costs. Make your facility more modular by favoring simpler structural designs and designing around standard precut sizes as much as possible — using standard-cut stud heights instead of custom cuts, for example. Shorten the spans of the building to reduce the size and increase the efficiency of structural elements (and reduce the quantity of construction materials). Avoid elaborate or expensive interior design elements. Efficient planning proportions and construction processes — like prefabricating building components offsite — can streamline and shorten construction timelines and shave additional dollars off of the overall price tag.

Be energy efficient: Use energy-efficient systems whenever possible, and be thoughtful about lighting design. Use natural light as much as possible without compromising climate control.

Get creative: Creativity about space usage and operational details unlocks additional construction and maintenance savings. Instead of standalone amenities like a movie theater or screening room, combine functions into flexible multipurpose spaces that can serve as an activity kitchen, game room, theater/performance room or exercise space. Elevate the experience with a small “pub” area and a library corner or reading nook instead of a full library. A few experiential details go a long way.

Make tough decisions: Make tough decisions, but be strategic about it. The goal is to do so in a way that doesn’t compromise the aesthetic appeal of the space, the functional/operational efficiency of the facility and, most importantly, the experiences of the residents. Maybe you can’t have those granite countertops, but you can allocate those dollars elsewhere in ways that improve the lifestyle of residents.

Leverage experience: One challenge is that, at least until recently, there have been no real templates for this type of facility. Consequently, it’s helpful to work with experts who do have experienced designing custom, highly specialized facilities like this. A background in value-driven seniors housing is important, as is an understanding of how to leverage size and scale, implement creative cost control strategies and operational solutions. Money saved during the building process can be poured back into the pockets of residents.

Creating a whole new category of seniors housing requires a mindset change: prioritizing people over profit, without maximizing every last dollar. Ironically, if done well, this new generation of value-driven, high-quality seniors housing could represent an extraordinary market opportunity serving aging baby boomers in the years ahead.

Russ Garber serves as director of the senior living studio at M+A Architects, a Columbus, Ohio-based architecture firm. Andrew Piletz serves as director of marketing and Nicole Boyer serves as vice president of development for Wallick Communities, an affordable housing and senior living facility operator, developer, builder and asset manager.

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