Care Homes Come of Age in China

barry says

The current development buzz worldwide appears to be focused on senior living and elderly care facilities. In the United States, the seniors market appears to have bounced back strongly since the recession, outpacing the apartment, retail, industrial, and office sectors[1] whilst China has seen the surprisingly robust introduction of the luxury senior sector, despite the traditional custom of multigenerational living. With the residential boom apparently now over, many developers have been starting to look at senior housing because they see it as a way to use unsold residential developments and as a sector that would get government support[2]. 

With the move to urbanisation and massive demographic shift caused by an aging population and the one child policy, the challenge in providing adequate elderly care is very real. Siblings are uncommon, meaning that one child must often care for two parents and four grandparents (The 4-to-2-to-1 ratio). This massive burden on the working generation has put pressure on the Confucian traditions that dictated children were responsible for taking care of their elders. With the working generation moving to the cities for jobs, they often have to leave elderly parents alone in their rural villages. Even when grandparents move to cities with their families, those grandparents are often left alone during the day. 

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The 2006 white paper, “The Development of China’s Undertakings for the Aged”[3], affirmed the government’s “active” role in promoting the construction of homes for seniors. As such the China Guangzhou government announced last month that it has designated 53 areas with 51,000 bed spaces for the building of new elderly care homes. The number of elderly in the city is anticipated to reach 1.75 million by 2020, which will account for almost 20% of the population. Their goal is to provide 90% of these seniors to be cared by their own families, 6% to be in community assisted living whilst a 4% provision is deemed necessary through care home provision. Land for care facilities is to be allocated directly or through public auction and developers, corporations, organizations or individuals can work either with government or independently to build the homes. However the facilties are considered not-for-profit and as such concerns exist about how the financial models will work. Of the 53 areas just 7 are designated for public care homes. Currently 71% of care homes in Guangzhou are privately owned. 

Senior housing is still a relatively new concept for China and there needs to be significant regulation of the senior housing sector as has developed internationally. Furthermore the market has yet to show any significant trends and is expected to differ from the US, Europe or even Japan where the sector has a broad spectrum: from providing communities for the “active elderly” who do not need care, to the very old and frail who need nursing support. Elderly care can refer to a whole range of tailored products and facilities including: active-adult communities; senior apartments; independent-living; assisted living; memory care; nursing homes; skilled-nursing communities; and continuing care retirement communities [CCRCs].(for a detailed explanation of the differences please see below)

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The US leads the way in the field and may offer examples of how the elderly care sector might develop in China. Currently trends there demonstrate increasing sophistication of the market and a response to the expectations of the post-war, baby-boomer generation. Large, gated, age-restricted active senior housing communities that often didn’t allow children are becoming a thing of the past. Communities are now expected to become inter-generational and encourage connectivity between residents and the community at-large. Active residents look to be able to enjoy the benefits of what the wider area has to offer particularly within transit-oriented districts and walkable environments where shops, restaurants, libraries, and theatres form a key component of their lifestyle choices. Within the development provision is the expectation of ballcourts, pools, spas, activity spaces and outdoor fitness and meditation areas. More attention is being paid to health and wellness values.  Multiple dining venues are seen as a must, including diversity of price-point options and cyber cafés. Apartments should exhibit a modern feeling with high ceilings and a spacious feel. Higher-end finishes are desired, with wood, stone and stainless-steel appliances.

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Providing such attractive developments to the new wealthy urbanised populace in China is one thing but questions arise as to how adequate facilities will be able to be provided in rural areas, or for the infirm or those on low incomes. Aging in-place at home is repeatedly cited as the most desirable solution however a multitude of problems appear to exist, not least as to whether there will be enough trained people available to provide suitable in-home care to support absent families. The whole subject is a very sensitive one in a culture where respect and responsibility for the elderly are hardwired and people instantly panic over the very thought of not being able to take care of their parents adequately.

United States Classifications for Seniors Housing Property Types

These classifications have been endorsed by the following organizations: American Association of Homes & Services for the Aging (AAHSA); American Health Care Association (AHCA); American Seniors Housing Association(ASHA); Assisted Living Federation of America (ALFA); National Centre for Assisted Living (NCAL); and the National Investment Centre for the Seniors Housing & Care Industry, Inc. (NIC).

Active Adult Communities: For-sale single-family homes, townhomes, cluster homes, mobile homes and condominiums with no specialized services, restricted to adults at least 55 years of age or older. Rental housing is not included in this category. Residents generally lead an independent lifestyle; projects are not equipped to provide increased care as the individual ages. May include amenities such as clubhouse, golf course and recreational spaces. Outdoor maintenance is normally included in the monthly homeowner’s association or condominium fee.

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Senior Apartments: Multifamily residential rental properties restricted to adults at least 55 years of age or older. These properties do not have central kitchen facilities and generally do not provide meals to residents, but may offer community rooms, social activities, and other amenities.

Independent Living Communities: Age-restricted multifamily rental properties with central dining facilities that provide residents, as part of their monthly fee, access to meals and other services such as housekeeping, linen service, transportation, and social and recreational activities. Such properties do not provide, in a majority of the units, assistance with activities of daily living (ADLs) such as supervision of medication, bathing, dressing, toileting, etc. There are no licensed skilled nursing beds in the property.

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Assisted Living Residences: State regulated rental properties that provide the same services as independent living communities listed above, but also provide, in a majority of the units, supportive care from trained employees to residents who are unable to live independently and require assistance with activities of daily living (ADLs) including management of medications, bathing, dressing, toileting, ambulating and eating. These properties may have some nursing beds, but the majority of units are licensed for assisted living. Many of these properties include wings or floors dedicated to residents with Alzheimer’s or other forms of dementia.

A property that specializes in the care of residents with Alzheimer’s or other forms of dementia that is not a licensed nursing facility should be considered an assisted living property.

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Nursing Homes: Licensed daily rate or rental properties that are technically referred to as skilled nursing facilities (SNF) or nursing facilities (NF) where the majority of individuals require 24-hour nursing and/or medical care. In most cases, these properties are licensed for Medicaid and/or Medicare reimbursement. These properties may include a minority of assisted living and/or Alzheimer’s/dementia units.

CCRCs: Age-restricted properties that include a combination of independent living, assisted living and skilled nursing services (or independent living and skilled nursing) available to residents all on one campus. Resident payment plans vary and include entrance fee, condo/coop and rental programs. The majority of the units are not licensed skilled nursing beds.

References:


[1] National Council of Real Estate Investment Fiduciaries Property Index

[2] Sun Xiangshu, Chairman Beijing Victory Star Architectural & Civil Engineering Group

[3] China’s State Council Information Office