Saturday, April 16, 2011

The Risks Of 'Senior Housing' For The Elderly & Infirm Seeking To Age In Peace In Their Final Years

A recent story in the Los Angeles Times shines some light on how the crappy economy and foreclosures are affecting the elderly and infirm who thought they would be living out the rest of their lives in the peace offered by continuing care retirement communities and other forms of senior housing:
  • "California's foreclosure crisis has severely impacted some of the most vulnerable tenants in our state — seniors who live in residential-care facilities," says state Sen. Mark Leno (D-San Francisco). "These residents had no warning that they were about to lose their homes, and their families and caretakers were left in a panic to find immediate emergency housing."
  • The situation is all the worse because of the health issues faced by many of those evicted. "Being uprooted like that is a horrifying situation for older adults, many of whom are frail and confused," says Shelley Woolery, who has been involved in two cases in her role as ombudsman program coordinator with the Council on Aging in Orange County.
  • Bankruptcies, foreclosures and other financial difficulties are inflicting new worries on residents and their families who thought they had secured their futures in a retirement community or other form of senior housing, ranging from "55+" developments to nursing homes. The problems confront older Americans at every income level.


  • Facilities range from independent-living apartments to skilled nursing facilities, allowing residents to "age in place." People typically move in when they are in good health and active; the promise, and the appeal, is that they won't need to move elsewhere if their health declines.
  • In addition to the steep buy-in, residents pay monthly maintenance fees. The entrance fee is usually said to be refundable to residents or their heirs if they move or die. But that can change if a facility goes out of business.
  • When a few facilities declared bankruptcy in recent years, the U.S. Senate Special Committee on Aging got involved and requested a study by the Government Accountability Office. Last summer, the GAO issued a report saying that investing in a continuing-care community involves "considerable risk" and urging state regulators to "be vigilant in their efforts to ensure adequate consumer protections for residents."(1)


  • In addition to placing a consumer's investment at risk, the current financial squeeze could cause a resident's monthly dues to spiral upward, the report said. Another problem with continuing-care retirement communities: Some consumers have found it difficult to retrieve buy-ins after leaving.
  • Elder-law specialists blame the economy: Seniors can't sell their homes, so they don't have the funds to move into the developments; that in turn limits the money the facilities have on hand to pay back those who are moving out.

For more, see Elderly and facing eviction (Foreclosures are affecting senior housing too, leaving residents and their investments at risk).

(1) For the GAO report, see Older Americans: Continuing Care Retirement Communities Can Provide Benefits, but Not Without Some Risk (go here for report summary).