By Jack Cumming
Imagine what life would be like if senior living were so popular that younger people were demanding to also be allowed to enjoy the life and amenities offered by the industry. Isn’t that how it should be?
The world of senior living is changing rapidly. Most recently Honor Technology, Inc. announced the acquisition of Home Instead to create a $2 billion home care firm. Home care has become so popular that Congress is considering funding it as a social program. Increasingly, senior living is seen as only for the frail and failing. That narrows the industry’s reach and sub-optimizes the value of what senior living can offer.
Reimagining into the Future
The times call for reimaging what the industry has long taken for granted. The Village Movement is gaining traction as a grassroots movement of young people of “retirement” age who want to stay in the homes they know and own. Moreover, “retirement” is here in parentheses because as this movement gains adherents, these are not people who think of retirement as what it was. The Village Movement is still in its infancy, but it is growing rapidly as it draws people who are aging with passion.
The Baby Boomers have put their stamp on culture at every stage of their life journey. Senior living will be no exception. Already, they are insisting that they be at the top of the heap in the hierarchy where they live. For many, perhaps most, senior living organizations that will mean upending the existing order of things. That need not be traumatic for current operators if they get in front of the change.
Giving boomers the recognition they expect means making residents full members in governance. For many, it will also mean giving them ownership. This can be accomplished without disrupting established finances or operations. Let’s see how this can look and what changes can make it a reality.
Evolving Market Expectations
Business changes like those pursued in this article respond to perceptions more than academics. See if this list of what the new expectations will be is one that you agree with.
- The new consumer views aging as an opportunity rather than as a health challenge.
- The new consumer is looking for a better life and not a solution to a problem.
- The new consumer wants to be self-sufficient without dependence on children or welfare.
- The new consumer wants active engagement in the residential community.
- The new consumer wants to have meaning and purpose throughout life.
- The new consumer wants a life outside the community as well as within it.
Change can seem radical when it’s not. It only seems radical because it’s unfamiliar. We now take the internet for granted, but it was radical just a little over two short decades ago. Now the idea of including residents as voting members in a senior living nonprofit may seem radical, but it’s not. Most social clubs are nonprofits with voting members. Professional management keeps them stable over time. If you convert your nonprofit to have residents as voting members, the operator’s role continues in management. That’s business as usual except that your offering will be far more attractive.
But we can take this a further similarly “radical” step forward. A nonprofit can own a for-profit in whole or in part. That means that a nonprofit can move its residential units into a cooperative corporation while keeping nonprofit status for the public areas and services. Why would you do this? Because cooperative ownership can allow you to give residents homeownership in your community with all the associated advantages of pride and otherwise.
As an aside, cooperative organization is the preferred approach since it allows immediate transfer to new ownership at death while a condominium may be tied up in estate settlement complications. No existing resident is required to buy into the cooperative.
Making Senior Living What You Want for Yourself
Thus, these two sensible steps, which strike one as radical at first, can transform senior living into a consumer-friendly business without impacting the career calling which drew you into the industry in the first place. By giving residents, or if you wish their families, ownership and a legal voice in governance, you can overcome the primary objection that senior living is institutionalization with loss of autonomy.
Finances and operations remain virtually the same, though sales of residential shares may provide equity capital for growth. Subject to legal counsel, it’s possible that the corporation can control share prices and voting rights so that only residents have a say and so that shares can only be resold to the corporation at prevailing values.
A concrete success example of this initiative is Beaumont Senior Living in Bryn Mawr, PA, though the cooperative residence within the Highlands in Topsham, ME may be similar. Conversion from an existing senior living community to a hybrid, resident-empowering model is straightforward. Ownership and inclusion can make senior living far more attractive for a wider range and younger group than is now typical. Moreover, the coming generation of residents may demand it.