LeadingAge Magazine · May-June 2017 • Volume 07 • Number 03

Stewardship and Bricks and Mortar

May 15, 2017 | by Gene Mitchell

Despite the steady growth of home and community-based services allowing seniors to remain in their own homes, there will always be a need for senior living in all its permutations. Even so, stewardship of those resources might look different in years to come.

Buildings and land have been the foundation of most LeadingAge members for a very long time. Providing homes for older adults—whether in independent living, assisted living or skilled nursing settings—has for generations been identified as central to the work of aging-services organizations.

Recent decades have shown a steady increase in the number of non-residents served by our members, however. It’s telling that the portion of Medicaid long-term services and supports spending devoted to home and community-based services (HCBS) went from 18% in 1995 to 53% by 2014. While that accounts for only a portion of HCBS delivered to American seniors, it’s a fair proxy for larger trends in outside-the-walls services.

Among LeadingAge members, there’s been a steady rise in HCBS offerings in recent years. The most recent LeadingAge-Ziegler 150 notes that “60% of the LZ 150 organizations offer home and community-based services to non-residents.”

Growing HCBS options, healthier lifestyles, better medical care and technology will probably boost the percentage of people who successfully age in place in their own homes, but by no means are the days of bricks and mortar over. Aging-services providers retain their commitment to stewardship of their real estate—both in the sense of preserving the communities their future residents will need, and rethinking their characteristics.

No Longer a “Home on the Hill”

“If I could [I would] live somewhere downtown in a great, vibrant community, with an intergenerational community there already. All I really need is housing, a place easy to move in and out of, and as I age, the support and services I need could be brought in to me.”

So says Eric McRoberts, a partner in RLPS Architects, Lancaster, PA, talking about his own vision for retirement, and his observations on what aging-services providers are starting to think about. The trend, in other words, isn’t necessarily a move away from real estate, but rather a change in location.

“Life plan communities historically built on cheap land that was available, that tended to be outside of cities, creating a situation where retirement communities are isolated,” McRoberts says. “For the Silent Generation that was OK; for the boomers that won’t be OK at all.”

“You almost don’t need to provide all the amenities you would normally see in the life plan community because they’re already there downtown,” McRoberts says. “When you start to think of it that way, it starts to become more appealing. [Clients in senior living] are thinking along those same lines. It works well on the independent living and assisted living level, where you simply bring more services in. Where those models haven’t been figured out yet is when you get to the skilled level component. At that point it’s [still] the care that’s driving it.”

For Glen Tipton, principal at Baltimore-based Hord Coplan Macht Architects, the most expected change is a move away from any model that tends to separate older adults from their surrounding communities.

“About 25 years ago a fellow working with us, based in London, had me come to make a presentation to senior providers about what Americans were doing,” Tipton says. “The first question came from a guy from Scandinavia, who asked, ‘Why do you Americans insist on putting your seniors in ghettos?’ I was taken aback at first, but what he meant was, why are they not integrated in the community their whole lives?”

Both Tipton and McRoberts believe a senior living model that centers projects in well-settled areas, such as a city in which the community is surrounded by existing restaurants, service providers and other amenities, will not only appeal to boomers, but might promote more affordability.

“This might [go] to the point of how stewardship and the campus can go hand-in-hand,” Tipton says. “The notion is that you could create a less costly opportunity to live in a safe and secure setting if you didn’t replicate everything that the community has to offer, by building in a site that’s within easy walking distance of lots of things people like in their retirement living, but wouldn’t have to pay for. They might like to have the gym right down the street, or the movie theatre, or multiple dining venues.”

John Knox Village, a large single-site life plan community in Lee’s Summit, MO, a suburb of Kansas City, has achieved something like that by waiting for the city to come to it.

“In 1970 [Lee’s Summit] was a small bedroom community, but over the years with urban sprawl, we’re now considered a suburb,” says Dan Rexroth, president and CEO of John Knox Village. “When we built there were probably 10,000 people here, with a lot of vacant land around us. In the last 10-20 years it’s really taken off; it’s the 2nd fastest-growing town in Missouri, with almost 100,000 people. We find ourselves in the middle of a lot of development and more of a hustle-bustle kind of place, which we see as a positive and for people interested in coming here, it’s a selling point for us.”

Rexroth adds, “We’ve had a real philosophical, purposeful strategy not to be the ‘home on the hill.’”

A senior living model that centers projects in well-settled areas, such as a city in which the community is surrounded by existing restaurants, service providers and other amenities, will not only appeal to boomers, but might promote more affordability.

When it comes to land, John Knox Village has a lot of it, 450 acres, and its use of that land enables it to blend into the community. The organization has an outpatient rehab building and a couple of medical office buildings on its campus. It runs its own ambulance service, which not only serves residents but also serves as back-up for the city. A new city fire station will soon be built on John Knox Village land, and more office buildings and retail sites may be built there as well. The Pavilion at John Knox Village is a 2,000-seat auditorium that hosts concerts, college and high school graduations, and other events.

“We want to appear just a part of the neighborhood and integrated into the community,” Rexroth says. “People have a little trouble even discerning whether they’re on [our campus] or not, and it’s through subtle ways, not an 8-foot fence around the place.”

John Knox Village, however, also fits into the life plan community trend toward developing off-site services. About 1,500 people live on campus, but the organization’s home health, private duty and hospice services have more than 4,000 additional clients in the surrounding community.

Preservation and Growth for Affordable Housing

For providers of affordable housing—who serve seniors with much less choice about the place they call home—the responsibility to practice good stewardship is always front-and-center.

“I believe there will always be a place for creating more bricks and mortar communities; we just can’t build enough,” says Michelle Norris, executive vice president of external affairs and strategic initiatives and president of National Church Residences Investment Corporation. “People want to stay in their homes; but it might not always be the best place to stay.” The constraints, Norris says, are funding programs on the affordable side, and on the market side, availability of capital.

“We are charged with being good stewards of every asset we own,” she adds. “That’s complicated because [National Church Residences] is 55 years old and assets age. Stewardship is both the physical component of the building, the physical needs of residents, and the financial and social issues of residents.”

The organization’s size and experience helps it preserve housing stock, especially in an age when complicated, multi-source financing is the norm. It has done as many as 100 refinancings in the last 5 years. Also, says Norris, “We’re good at layering tax credit financing on top of the HUD program.”

She agrees that a return to new development under the HUD 202 program should be a priority, endorsing LeadingAge’s new Save HUD 202 campaign. “LeadingAge has historically been the loudest and most passionate voice around the HUD 202 [program].”

(For more on the Save HUD 202 campaign, see the interview with Laverne Joseph of Retirement Housing Foundation in this issue.)

National Church Residences has also secured a $50 million fund in partnership with an investment partner that allows it to buy buildings their owners are ready to sell—often smaller organizations for whom refinancing (especially involving tax credits) and renovation of older buildings is difficult. “In a lot of cases, it’s about helping someone [e.g., a small nonprofit] exit with their mission intact,” Norris says.

“We are charged with being good stewards of every asset we own. Stewardship is both the physical component of the building, the physical needs of residents, and the financial and social issues of residents.”

While this multi-state provider will maintain and continue to increase its residential portfolio, it is also moving into HCBS in a big way.

“Our strategic plan includes … serving as many people in the community as in our buildings,” says Norris. The organization has approximately 25,000 residents now but only about 7,000 HCBS clients. The 5-year strategic plan, launched in July 2016, would raise the latter to at least 25,000, receiving a mix of private duty, home health, hospice and adult day services. One component of those services is the Home for Life program, which assigns “enhanced service coordinators” to create customized care plans for community-based seniors and connect them to a network of preferred providers offering preventive care, general health services and socialization opportunities.

An Intergenerational Future?

“For the past 4 years, I lived in the heart of the newest urban area of Baltimore, in a rental apartment made up of a wide array of people of various ages and ethnicities,” says Tipton. “I’m older than the average person in that building, and I think the intergenerational aspects of a building like that are rejuvenating.”

If there is one common belief among those interviewed, it’s that intergenerational living is—or at least ought to be—the future. Intergenerational programming is common in aging services; many providers offer child care services on their campuses, complete with lots of contact between kids and seniors. Some providers, like Bridge Meadows in Portland, OR, offer true intergenerational housing.

There are for-profit developers trying to demonstrate how intergenerational independent living might work.

“Rather than create our own critical mass of services, we’re going to where people already are,” says Ryan Frederick, CEO of Baltimore-based Smart Living 360. “We’re building specialized apartments in walkable, mixed-use areas, using universal design principles.”

His company just completed its first project, The Stories at Congressional Plaza, in densely populated Rockville, MD. The building contains common spaces, fitness facilities and more, in an intergenerational building. The community has what Frederick calls “lifestyle ambassadors,” concierge-type employees that help connect residents to each other and to outside services.

Frederick talks about the community as a proof of concept and is actively looking to develop others, including with nonprofit partners. The Stories houses young families with children, boomers, millennials and seniors in their 80s.

“When we think about the high cost of senior housing coupled with changes in technology that allow for services to efficiently come to you, we expect to see a swath of new type of residential models, including for those who are older,” Frederick says. “Maybe the future of senior housing isn’t senior housing. There will always be a role for [it in] high-acuity, more complicated cases. But for those who are healthier and interested in making the most of their ‘longevity bonus,’ these new residential models will focus on supporting people to pursue the lifestyles they want to lead.”

McRoberts believes nonprofit providers can run with an intergenerational model, tied together with his ideas about urban senior living.

“We’ve got one [project] where the developer comes in and gives a piece of the project to a local [life plan community] that’s outside of the town,” he says. “The rest will be retail and market-rate apartments. It’s not just senior living, it’s a little bit of it all. That’s very appealing to someone; you don’t feel like you’re being isolated because you’re older.”

Gene Mitchell is editor of LeadingAge magazine.