By Carolyn Gray Anderson
By 2029, every member of the Baby Boom cohort — those born between 1946 and 1964 — will have turned 65. Boomers make up 35 percent of the U.S. population, and 45 percent of them are already past 50.
UCLA Ziman Center for Real Estate presented “Preparing for the Senior Tsunami: The Future of Affordable Housing and Long-Term Care” in partnership with Mercy Housing to address the fact that the majority of California’s housing stock was not designed with aging in place in mind. The day’s panelists agreed unanimously that today’s aging population is decidedly not interested in assisted living or skilled nursing homes.
The good news is that Americans are living longer and remaining relatively healthy. The not-so-good news? Americans are living longer and remaining relatively healthy. This means they insist on independence and a variety of choices well past the age their parents and grandparents might have done, minus the necessary savings or income. Although recent changes in health care law and regulations may move in the direction of community-based care models that focus on wellness, prevention and cost reduction, the regulatory bias in health care funding is still weighted toward institutional care.
Ben Phillips, regional VP of health care and housing innovations at Mercy Housing California, cited clinical evidence for positive outcomes of “supportive housing,” which caters to residents needing minimal services as well as those needing high amounts of care. The exemplary Mission Creek complex in San Francisco — a Mercy vertical residence with commercial and community spaces at lobby level — houses many people Phillips described as “liberated” from skilled nursing facilities.
California has 1,100 skilled nursing facilities, more than anywhere else in the nation. Most are severely outdated and “designed for task-centered care,” as long-term care consultant David Farrell said. Boomers, culturally, aren’t inclined to the multi-bed/shared bathroom model of most such facilities.
This is a demanding cohort, said Fernando Torres-Gil, director of the Center for Policy Research on Aging at the UCLA Luskin School of Public Affairs. But they are in rather deep denial about what longevity really means — especially as regards how to pay for a combination of independent living and the increasing medical care and social services they are likely to need. He amused the audience, which included many 50-somethings, by declaring: “Seventy-eight million ornery, demanding, entitled Baby Boomers are going to wake up and say, ‘I’m in a world of trouble.’”
Programs like Social Security, begun in 1935, and Medicare, dating to 1965, dramatically reduced the number of people living below the poverty line. That success may have convinced the federal government, Torres-Gil said, that it’s essentially done its part. And Americans can’t count on any more entitlements at that level.
Cindy Kauffman, COO at the Institute on Aging, strives to integrate communication around individuals’ care and living situations, collaborating across services and institutions to help seniors age independently while still participating in communities. Navigating the quagmire of case management, government programs, health care and permanent housing remains a challenge. “Tsunami is the right word,” added Margaret Tatar, principal of Health Management Associates, in reference to the multiple whirlwinds triggered by the Affordable Care Act and states’ efforts to comply as well as grow with its requirements.
So who is obligated to solve the problem, as Boomers who haven’t managed to save like their parents did, or whose cities are becoming increasingly expensive to live in, insist on remaining independent as they age?
Cities, Torres-Gil said, are realizing they need to prepare for shifts in people’s expectations and needs as they age. The entire panel, in fact, agreed that the most creative and effective solutions will be arrived at locally. And for-profit enterprises with a sense of social responsibility might be the most effective agents for change. Ziman remains committed, said Ziman executive director Tim Kawahara, to a certain obligation to help shape and implement policies that support the housing needs of an aging population and demonstrate an investment in communities as part of the community. It’s in Ziman’s DNA, he said, thanks in large part to the standard set by the Howard and Irene Levine Program in Housing and Social Responsibility.
In 2013, UCLA Anderson EMBA ’14 students Matt Heidt, Sanjay Rajagopal, Kinoka Ogsbury, Augustus Gatto and Naomi Chen conducted a Strategic Management Research Project with Mercy Housing. It was Ziman’s first, and it forged a fruitful connection between Ziman and the national nonprofit. Phillips said Mercy wanted to launch new business and the SMR project became the catalyst for a “sophisticated economic model” to achieve it. As Heidt, who was in the audience, explained in an interview last fall, “Our challenge was to find a financially viable solution to increasing the supply of affordable senior housing using private equity rather than subsidized capital sources. Our team was able to demonstrate that not only could a private equity approach to affordable senior housing be profitable for investors, but government programs like Medicare and Medicaid could reduce spending at the same time.” Now Mercy focuses primarily — and with confidence — on property acquisition.
Supportive housing needs to be located in places seniors want to live but where amenities and affordable, high-quality medical care and other services are abundant. Accessible public transportation is key; Torres-Gil calls it the stepchild of housing. But certain communities, whether whole towns or specific ZIP codes, might not be terribly welcoming toward the kind of re-envisioned housing complexes Farrell and Phillips see taking the place of traditional nursing facilities. Torres-Gil, who served for many years on the Los Angeles City Planning Commission, said, “There is a visceral connection between people and their property values.” So a significant impediment, unless municipalities impose special zoning, could be the LULU faction — resistance on the basis of “locally undesirable land use.”
But there’s hope in the fact that these questions are likelier and likelier to be bipartisan concerns. It means policy is more apt to change, the panelists agreed.
It’s fair to say this is the calm before the real storm, and it will take careful planning if we expect to weather it.
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