Minnesota senior community pushes back against ‘astronomical’ rent hikes

Feb. 11--The seniors who live at Autumn Glen apartments in Coon Rapids gather for Bible study each morning and bring flowers and pastries to residents too frail to attend.

But this placid scene turned angry last month, after the facility's owner announced steep rent increases that are uprooting residents and rending longtime friendships.

Dozens of elderly residents, including many with disabilities and serious ailments, received notice late last year that their rent would increase by $300 to $500 a month, or 15 to 30 percent. Suddenly, apartments that many had called home were beyond their reach. Some moved out immediately. Others are busy packing for an exodus this spring.

When they asked for an explanation, the residents encountered a complicated web of private investors, limited-liability partnerships and a nonprofit management entity, which, they say, have all ignored requests for a meeting.

"People set down roots here. And now this community is being destroyed," said Joyce Beyer, 75, whose monthly rent jumped from $1,700 to $2,000. "It makes us all so sad."

The turmoil at Autumn Glen points to broader concerns in the assisted-living industry, which has grown explosively in the last decade yet has largely escaped regulatory scrutiny. Minnesota, like a handful of other states, does not license assisted-living facilities, which means that elderly, often frail, residents generally have no more rights and protections than young renters in an ordinary apartment building.

With the aging population and light regulation, the assisted-living industry has also become a magnet for Wall Street and private equity investment funds, which aim to maximize profits while, coincidentally, making it difficult for seniors to identify exactly who is raising their rents. In a sign of Wall Street's growing interest, the giant private equity firm Blackstone Group last year formed a joint venture with the nation's largest assisted-living operator, Brookdale Senior Living, acquiring a portfolio of 64 senior communities (nearly 6,000 units) for $1.1 billion.

A report issued last week by the U.S. Government Accountability Office found deep gaps in the nation's regulation of assisted-living facilities. More than half of all states could not provide basic information on the number of "critical incidents," including abuse, neglect and exploitation, in these facilities. Yet billions of dollars in state-federal Medicaid money flow to these lightly regulated businesses and the many for-profit funds that now own them.

Minnesota reported spending $662 million in federal and state funds for assisted-living services for 21,847 Medicaid beneficiaries in 2014, an average of $30,300 per person, according to the GAO report.

"The government should expect more in terms of quality of care and transparency, given the huge amounts of money they're paying," said Robyn Grant, public policy director for the National Consumer Voice for Quality Long-Term Care in Washington, D.C.

Industry officials said the double-digit rent increases at Autumn Glen are unusual. In Minnesota, the median monthly rate for a one-bedroom apartment in assisted living facilities has increased by just 3 to 4 percent annually for the past five years, topping $3,500 last year, according to a survey by Genworth Financial, an insurance company. In some cases, facilities may have "valid reasons" for larger increases, such as a new building owner or the introduction of new service packages, said Patti Cullen, president and chief executive of Care Providers of Minnesota, an industry group.

"Having said that, it does seem unusual to have a 30 percent increase," Cullen said.

Bible study

Janet Dahlquist, 85, expected to spend the rest of her life at Autumn Glen when she moved into her cozy two-bedroom apartment four years ago.

She loved the facility's brightly lit dining room, chapel, spacious balconies and ample spaces for socializing with other residents. A book lover, Dahlquist became the facility's self-appointed librarian and carefully organized hundreds of books donated by newcomers. Like other residents, Dahlquist was also drawn to the facility's embrace of Christian values. A sign in the lobby announces a mission to serve seniors and their families "in the spirit of Christ's love." Residents lead daily Bible study meetings, and it's not unusual for them to gather for prayer vigils when someone is sick or dying.

"This is more than just a place to live. This is a community," Dahlquist said "I was so comfortable here."

But her sense of stability was shattered just before Christmas, when a new lease contract was stuffed in her mailbox. At first, Dahlquist thought the document was a mistake. It showed her monthly rent jumping from $2,600 to $3,000. Other residents, she learned, had seen rent increases of 20, 25 and even 30 percent.

"From the moment I moved in, I was told that this place was Christian and loving and would do the right thing," Dahlquist said as she packed some of her belongings last week. "But it didn't seem very Christian-like to hit us with a rent increase like this."

Dahlquist and her neighbors formed a residents' committee, then collected 43 signatures on a petition demanding a meeting with the owners.

Instead, they were told to contact Guardian Angels Senior Services, an Elk River-based nonprofit that manages the facility. An executive at Guardian Angels told residents that the decision to raise rents was made by about a dozen private investors, Beyer said, and that their names were confidential.

Nearly two months have passed, and despite calls to legislators and City Council members, residents are still seeking a meeting.

Fist-shaking anger

State records show that Autumn Glen is owned by a limited liability company based in St. Cloud. The person listed as the contact, Andrew Auger, is an executive at a construction and building company. He declined to comment when contacted by the Star Tribune, referring questions to Guardian Angels. Officials with Guardian Angels did not return repeated calls last week.

"We just want a simple explanation," said Barbara Blair, 73, whose rent went up 18 percent. "But no one can even tell us who owns this place."

On a recent afternoon, about two dozen residents -- including some with walkers and wheelchairs -- gathered in Autumn Glen's spacious third-floor community room to discuss the rent increases. Asked if they were looking for a new place to live, nearly everyone raised their hands.

A few said they wanted to move but that health problems and a shortage of available housing had forced them to stay and pay the higher rents.

Assisted-living facilities, which often resemble apartment buildings, were intended originally for older people who needed help to live independently but wanted greater freedom and social interaction than they would find in a conventional nursing home. But over time, many have begun catering to residents who are frail or have serious medical conditions. More than a third of assisted-living residents, for example, have Alzheimer's disease or other forms of dementia, which greatly increases the difficulty of finding a new place to live.

"Is there a renter's association in this state?" one of the residents asked the assembled group last week.

"This is financial abuse," said a woman in a wheelchair, shaking her fist.

Tom Loso, 85, grew emotional as he reminisced about his 2 1/2 years at Autumn Glen. Last week his wife of 62 years, Jane, died, and her pale blue rosary beads still lay in a neat pile on his living room table. Loso said he plans to move in coming weeks but is still grieving for his wife.

"The trouble is, you develop friendships in a place like this," Loso said. "These people become part of your life and then, just like that, they're gone because someone decides to gouge you."

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