Senior care housing is on the rise, and so are options

Sept. 27--Bill Oast and his family recently made a tough decision that an increasing number of Americans will have to face:

Is it time to move Mom into a home for the elderly?

"My parents were of the school that the only way they were going to leave the home they were in was toes up, if you know what I mean," Oast, an elder law attorney with Oast & Taylor, said last week. "That works well as long as they're both in relatively good health and one of them is driving."

Oast's father died seven years ago, and his mother, Martha Ann Oast, stopped driving in 2013, he said. After she was declared a "fall risk" by her doctors, they told her not to work in her Portsmouth yard anymore, and she became increasingly isolated.

Baby boomers are starting to retire en masse, and as they age, many families will have to weigh whether they can continue to live on their own, experts say.

The decision to leave home is highly emotional -- and it's complicated by the financial impact of picking the right community. Some senior homes charge upfront fees that average in the hundreds of thousands of dollars, up to over $1 million, while others lease units out to residents on a monthly basis.

Of the ones that charge entry fees, some require tenants to buy their units. Some offer refunds and some don't.

Oast and his family decided to move his mother, 91, into a new development in Suffolk, The Crossings at Harbour View, which does not charge an upfront fee, he said.

"After a few months, if my mother can't stay there or if she decides it's not for her, she can leave and not have to worry about selling her unit," Oast said.

Doug Buttner, regional director of operations for Harmony Senior Services, which developed The Crossings at Harbour View, said his company is building senior communities that do not charge upfront fees because baby boomers are more mobile than their parents, and they don't have as much money to put down on a unit.

Older generations "were very structured, and they went to work for the same company and stayed with that company their whole career and that usually meant... that they bought a home, bought it cheap, stayed in it, raised their family and continued to be there," Buttner said. "So when they sold their home, they had a huge nest egg to pay the entry fee going into these communities."

Harmony Senior Services has 10 senior developments in Virginia and the Carolinas, including The Chamberlin at Fort Monroe. The company is building one in Virginia Beach and another in Yorktown.

By this time next year, Harmony will have 18 senior communities, Buttner said, and the goal is to double the number of developments every year.

"If you're a senior-living operator right now and you're not developing and expanding, you're going to be behind the eight ball," Buttner said.

In the apartment-building industry, units designated for seniors are growing faster than those for the general population, said Andy Cohen, CEO of Caring.com, which owns the website SeniorHomes.com, a database with ratings and reviews. The U.S. apartment market is a $120 billion industry and growing at 3 percent; senior housing is $60 billion and growing at 5 percent, he said.

Monthly rentals became popular starting in the 1970s, he said. Still, only about 10 percent of Americans wind up in senior housing, Cohen said.

"You need money to be able to afford that," he said.

About 30 to 40 percent of people live out their days at home, some by hiring nurses to help. More than half wind up living with their children, Cohen said.

Most seniors buy their way into continuing care retirement communities with the equity they get from selling their homes, said Andy Hook, an elder law attorney with Hook Law Center.

But that was difficult during the Great Recession because home values plummeted, Hook said. Historically, continuing care retirement communities require cash payments up front, but when the housing market crashed, some were willing to offer financing.

Now that the market is bouncing back, it's easier for seniors to afford the entry fees, Hook said.

Inventory in entrance-fee properties has grown 0.6 percent in the past year, compared with 2.1 percent for senior housing that charges rental fees, according to the National Investment Center for Seniors Housing & Care.

The difference between most senior rental apartments and continuing care retirement communities is the level of care available for seriously ill residents.

The Crossings at Harbour View provides independent housing, assisted living and "memory care" for seniors with the beginning stages of dementia. Residents who require intense medical treatment have to move out.

Harbor's Edge in Norfolk and other "continuing care" communities have skilled nurses on staff who care for residents with serious medical needs, said Robbie Smith, chief operating officer of the Fort Norfolk community.

Continuing care facilities often market the peace of mind their residents have knowing they can "age in place."

Harbor's Edge charges an entry fee, but typically 80 percent of it is refundable when a tenant dies or decides to move out, Smith said.

A single person pays an average of $4,200 a month (which includes one meal a day) to live in independent housing in Harbor's Edge, Smith said. A spouse costs about $1,050 extra a month. Monthly fees for those who require intense medical care go up to $10,000.

"None of this is paid for by Medicare," Smith said. "This is all out of pocket, and a lot of people don't have long-term care insurance."

Harbor's Edge increased its occupancy -- even during the recession -- and plans to build a second tower in Fort Norfolk with 120 independent-living apartments, some nursing units and a state-of-the-art dementia care center.

"Now that we're able to see people sell their really nice family homes, people are moving in, and we're able to do our expansion," Smith said.

Sarah Kleiner, 757-446-2318, [email protected]

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