Slow Housing Market Hurts Retirement Communities

TAMPA - Florida's retirement communities are taking a financial beating as would-be residents struggle to sell their homes.

Hit especially hard are facilities that offer life-care services, known in the business as continuum of care retirement communities. Places such as North Tampa's University Village charge entrance fees ranging from $75,000 to $500,000. In exchange, residents are guaranteed a place where they will be cared for the rest of their lives.

"We've had to be creative to get people into our community," said Aarene Alessi, marketing director for University Village.

Life care doesn't come cheap. On top of the entrance fee, University Village charges residents $1,200 a month in fees to cover meals and programming. The 20-year-old facility has had waiting lists in the past, but the vacancy rate has nearly doubled this year because potential residents cannot sell their homes.

At nearby John Knox Village, the occupancy rate has dropped 13 percent in the past three years. The independent-living occupancy - residents who are in life care but do not receive assisted-living or nursing care - dropped more than 28 percent during the same period.

Florida has the highest average age among the 50 states, but just 4 percent of its residents live in nursing homes or assisted-living facilities, according to Florida Healthcare Association.

"That's well below the national average," FHA director LouMarie West said. "These residential communities are where the majority of our seniors live."

While many of those retirees move from out of state, more than half have lived in Florida for a decade or more, according to Bennett Napier, executive director of Florida Life Care Residents Association. He said retirement communities along Florida's Atlantic coast are seeing unprecedented vacancy rates, some as high as 20 percent.

"In the past, when we had a different real estate market, the continuum care communities would buy the houses," Napier said, "but they can't take that risk in today's market."

University Village has introduced financing options to combat the housing crisis and has managed to keep its occupancy above 90 percent. The village is allowing new residents to defer half of their entrance fee for up to six months to give them time to sell their homes.

"It's usually easier for them to market the homes after they've moved out," Alessi said.

If a new resident takes out a home equity loan to pay the entry fee, University Village will pay interest on the loan for up to a year. Or the community will reimburse the resident up to $1,200 a month for housing expenses for up to a year if he keeps the house.

"They can use it to make their mortgage payment or pay utilities or for lawn service," Alessi said. "If we weren't doing these things, our vacancy rate would be down much more than the 3 or 4 percent it is now."

John Knox Village has gone even further. Marketing director Margie Ferrino said the continuum care community started accepting promissory notes in lieu of cash from residents who are trying to sell their homes. The note allows residents to move in immediately and gives them six months to sell their homes.

The community has dedicated staff to help these residents with the sales. Ferrino said she sends John Knox Village's maintenance staff to seniors' homes to make sure they don't get scammed by unscrupulous contractors and repairmen.

"We have 19 people who have made deposits and are currently waiting to sell their houses," Ferrino said. "I've got someone on staff who is a real estate professional and she's going out to their houses to help stage their homes."

John Knox Village won't hold an apartment for a prospective resident unless there is "serious activity" at the home - if the house is under contract. People can join the "future resident" program.

"They've made a deposit and we allow them to come to John Knox Village every day and take advantage of all the meals and programs," Ferrino said. "It's a way for them to get to know the staff and make friends. Because the last thing we want is for them to sit around their house all day and get depressed staring out at a For Sale sign."

Tampa's Canterbury Tower saw its overall occupancy plummet over the past four years, from 88 percent in 2004 to 81 percent last year. The Bayshore Boulevard community requires entrance fees ranging from $150,000 to $500,000. Marketing director Linda O'Leary said the occupancy rates are just now returning to normal.

Deborah Franklin, incoming president of Florida Healthcare Association, said the problem isn't limited to life-care communities. As chief executive of Hawthorne Village and Hawthorne Estates in Brandon, Franklin said even rental-based retirement communities are losing residents because of the housing crisis.

"They move in thinking surely the house will sell before they run out of assets," Franklin said. "But it doesn't and they end up having to move in with a relative. Some have had to move into skilled nursing facilities just to get on Medicaid."