Retirement Communities Ain't No Panacea

Erickson Retirement Communities files for Chapter 11 - Article from the Baltimore Sun

Erickson's real estate arm, which acquires land for campuses and builds projects, has been hurt by the recession, as seniors who couldn't sell existing homes put off moving to continuing-care communities....... The economy has hurt the entire retirement community industry, prompting many companies to offer incentives just to move in, experts said. Many new developments have been delayed because of the tight market. But continuing-care facilities such as Erickson, which allow seniors to progress from independent living to assisted living, have suffered more, experts said..... People who move into assisted-living facilities usually don't have a choice, said Rick Grimes, president and CEO of the Assisted Living Federation of America. "The problem that Erickson seems to be facing is that they're not getting as many people in on the independent-living side, so they're not getting people into the cycle."

You're only as secure as the retirement home - Excellent article from the Washington Post that is related to the above article about Erickson Retirement Communities.

Ingleside's trouble was that the cost of caring for its residents was outstripping the fees they were paying. "There was a business model here that wasn't sustainable," said Richard Woodard, chief operating officer of the nonprofit....

Retirement Communities Respond to Housing, Market Drops - from U.S. News and World Report - (11/10/2008)

Primary residences are the greatest source of wealth for most retirees, and the sale of those homes is the most common way to generate retirement-community entrance fees, which range from $100,000 at the low end, upwards of $500,000 and much more at the highest-end communities.

Income from pensions and investments is a major source of monthly maintenance payments across the spectrum of senior housing. Financial support from children and other family members often enables retirement home occupants to make ends meet.

All sources are now being sharply compromised. And while it's too early to see the full effect of the impact, it's clear it will be extensive.

Elderly Forgo Move to Assisted Living Because They Can’t Sell Homes - From the Website Senior Living Solutions (5/29/2009)

The housing crisis has kept thousands of older Americans who need support and care from moving into retirement communities or assisted-living centers, effectively stranding them in their own homes.

The Hound: I know that the new context has been put in place when area leaders try to change to the new paradigm called "Active Retirees." It truly sounds great in theory, that we are going to bring these early retirees, typically in their late 50s and early 60s in here and they will work and contribute to our economy, while enjoying all of the amenities Hickory has to offer. They will all be millionaires who play golf by day and desire Dom Perignon and lobster at night. The only problem is that economic realities are a speed bump that precludes this from happening.

How do we market this area to these folks? We tell them it is affordable. In other words, we are telling them we have cheap housing, cheap food, cheap retail, and cheap services... By riding down 29th avenue NE, one can see what the vision has been for quite some time. We have a couple of gated retirement communities, several moderate to upscale assisted living centers, and even a funeral home right in the midst of it all. This is exactly what the company above, Erickson Retirement Communities, has tried to do. These companies want to get the older generations into the pipeline and move them from the gated communities, to the assisted living centers, then to the nursing home, and finally to the funeral home.

This vision was laid out long ago in this area and it was done at the expense of balance. All of the cards were laid upon the table, all chips are in, and one would have to be blind not to acknowledge the implementation. This community is geared towards Seniors come (you know where) or high water. Is it true that Seniors get a discount on their property taxes? If they do, does that make sense? What would justify that?

Now we are seeing the beginning of what I addressed to you earlier this year. We are going to see Socialized Healthcare. Congress passed the initial bill, which will soon be reconciled in the Senate. I don't think there is any way to stop this. So medicare is going to be cut for seniors and we all know how much seniors rely on medicare. As the economy continues to implode, the local area is going to be expected to pick up more of the tab for these seniors who cannot make ends meet. It is a vicious never ending cycle and it will be exacerbated unless we begin to try to restore balance to the demographics of this community.

Once again, Hickory is dealing with a Monoculture. We are moving from a monoculture of manufacturing to a monoculture of "retirement community." Honestly folks, can we afford to put all of our eggs in one basket again? We must stop this skewed growth in its tracks and insist on balanced demographic marketing and development. If we don't, then we may be seeing the fatal blow to Hickory's economy that it will never be able to recover from.

Say we were successful in marketing to the active retirees. How long will they stay active. Retirement = Winding it down. This is not the way to grow the community. So, if you are going to stay here, then you have to accept that your life's potential will be limited. I know that this reality can be viewed negatively, as though I am picking on the senior demographic, but there are plenty of resources that have been provided on this blog and elsewhere that will help you objectively ascertain a conclusion and I believe that it will be similar to my own.

Links to past articles involving this subject:
Hickory, North Carolina 2009
Fixing Hickory - A Demographics and Marketing Discussion Panel
Fixing Hickory - Narrowing Our Focus Economic Stimulus Package for Catawba County Finalized (The Finale)
Hickory - Time to put the Puzzle together