EB-5 Project Spotlight: What Exactly is an Assisted Living Facility?

After the newly imposed EB-5 regulations took effect in November of 2019, there are fewer EB-5 projects to choose from that still qualify for the reduced investment amount, now at USD$900,000. And as the Coronavirus has decimated the hotel and travel industry, which comprised a majority of available EB-5 projects, what asset classes are there to choose from for your EB-5 investment.

 

At Christian Tyler Properties, we have chosen to develop senior care facilities across the Southeastern United States to mitigate risk for our EB-5 investor families, and for ease of exit strategy once the project is ready to be monetized and funds returned to investors. In short, these projects have been strategically chosen for development so that our EB-5 investor families can be confident in the security of their investment due to various government incentive programs and the supply/demand economic trends that exist in the Senior Care industry. You can read more about this type of investment here: Why are we developing so many senior care facilities?

 

Not only des senior housing benefit EB-5 investors for its continued demand and ease of available exit strategies, senior housing also holds an important place in society, bringing many benefits to the community. In this article, we will highlight the Senior Care Industry in the United States, the distinct components of Assisted Living, and how assisted living differs from nursing homes in the wake of the Coronavirus pandemic.

 

Senior Care in the United States

In the United States, there are numerous options for facility-based long-term care services, such as board and care homes, assisted living facilities, nursing homes, and continuing care retirement communities. These types of facilities are currently in extremely high demand due to the aging population of the “baby boomer” generation born from 1940 – 1960.

 

In fact, the 65+ population in the United States is expected to increase from 46.2 million in 2014 to 72.1 million in 2030, according to the Department of Health and Human Services’ Administration on Aging. Even more, the U.S. population over the age of 75 is projected to increase by 77% from 2010 to 2030, a growth rate nearly double that of the prior twenty-year period (43% from 1990 to 2010). Read more about the high demand of senior care facilities on our previous blog post here: Senior Care Living Facilities Are in High Demand.

 

One of the most common misunderstandings about senior living, however, is that “Assisted living” is just another way to say, “nursing home”, when in reality the two differ significantly.  

 

What Is Assisted Living (“AL”)?

According to the National Institute on Aging, assisted living is for older adults who need help with daily care, but not as much help as a nursing home provides. Assisted living facilities range in size from as few as 25 residents to 120 or more. Typically, a few “levels of care” are offered, with residents paying more for higher levels of care. Assisted living residents usually live in their own apartments or rooms and share common areas. They have access to many services, including up to three meals a day; assistance with personal care; help with medications, housekeeping, and laundry; 24-hour supervision, security, and on-site staff; and social and recreational activities.

 

Assisted Living Statistics & Demographics

  • The Journal of Post-Acute and Long-Term Care Medicine estimates that there are 30,200 licensed AL communities across the United States, providing care to more than 835,000 residents, which constitutes almost 40% of persons who receive residential long-term care in the United States.
  • More than half of the AL residents are “old-old” or “oldest-old”: 53% are aged 85 or older.
  • Many have the chronic underlying conditions: 34% have heart disease, 17% have diabetes, and 15% have lung disease (chronic obstructive pulmonary disease and allied conditions).
  • More than a quarter have between 4 and 10 chronic health conditions.
  • The median stay in Assisted Living is 22 months, and an overwhelming majority of residents are female.
  • More than 70% of AL residents have some cognitive impairment, with 42% having moderate or severe dementia
  • Memory care units in AL have grown steadily over the last decade. Simply stated, AL has become the primary provider of residential care for older adults with dementia.

 

What Are Nursing Homes?

Nursing homes, also called skilled nursing facilities, provide a wide range of health and personal care services. Their services focus on medical care more than most assisted living facilities. These services typically include nursing care, 24-hour supervision, three meals a day, and assistance with everyday activities. Rehabilitation services, such as physical, occupational, and speech therapy, are also available. Some people stay at a nursing home for a short time after being in the hospital. After they recover, they go home. However, most nursing home residents live there permanently because they have ongoing physical or mental conditions that require constant care and supervision.

 

Growth in the Assisted Living Market Over Nursing Homes

Recently in the United States, nursing homes have been a shrinking component of the residential long-term care system, with some of the largest growth having been in assisted living. Every person’s reason for choosing elder care is different, but the main factor in choosing assisted living or a nursing home is what type of care is needed.

 

More than 20 years ago, the Assisted Living Quality Coalition established that the overriding philosophy of care in AL is social, as opposed to medical for example, to promote individuality, ensure choice, and provide opportunities for social engagement. Furthermore, as compared with nursing homes, AL settings have higher proportions of residents who are engaged in outside activities, such as trips with family members, and some own and drive cars for independent outings to maintain contacts in the community.

 

This makes assisted living a positive place for the aging parents of adult children, and dispels many misconceptions and often, fear, over the quality of life one may have in such a facility.

 

Assisted Living & Quality of Life

  • 73% of families report that a senior loved one’s quality of life improved after moving to assisted living, according to a survey by A Place for Mom and Sage Projections, a Seattle-based research company. Additionally, 60% of caregivers found that their personal quality of life improved.
  • Many seniors fear losing their independence and privacy. It’s helpful to know most communities provide residents with a choice of spacious apartments with different floor plans and separate entrances. People are free to furnish their apartments with their own furniture and personal items. As in private life, apartment doors lock and are controlled by residents.
  • Senior living communities are responding to people’s preferences for fine dining and high-tech fun. “Now that the Baby Boomer generation is entering senior living, we’re starting to see assisted living communities change to reflect a more demanding consumer,” says Sue Johansen, vice president of strategic customers at A Place for Mom. “We think about bingo and the senior communities. But more and more, there are virtual reality theaters, spas, and lots of different activities to stay social.”
  • As for meals, dining options look more like restaurants and less like buffet lines. In some higher-end communities, you’ll find bars, sushi, and other fine dining options seniors are used to at home in their private lives.

 

Senior Living Facilities & COVID-19

Given the current pandemic sweeping the nation, it is important to address Coronavirus and how it affects the senior care industry. Given their congregate nature and population served, assisted living facilities have some risk of affected by COVID-19 just like all sectors of society, but the risk is not as high as nursing homes, which are cited by the CDC as being at the “highest risk” level of Long-term Care Facilities.

 

Nursing homes have been particularly hard hit by the coronavirus pandemic, but as outlined above, assisted living facilities are NOT the same as nursing homes. More so, AL communities are not intended to be medical settings, and in the wake of COVID-19, they should not be faulted for not being medical settings. However, they provide care for individuals among the highest risk for COVID-19 and serious outcomes, making it especially important to not ignore COVID-19 in AL.

 

In order to protect the residents and staff at each of our senior care facilities that we have developed, each community is following the recommendations of the Centers for Disease Control and Prevention (CDC) and local and state health departments to contain the spread of the virus. For example, see how Promise Pointe at Tampa Oaks, an assisted living facility developed and owned by CTP, has responded to COVID-19 and how the facility is taking steps to protect residents and their families here.

 

Coupled with structuring an EB-5 project that’s favorable for our investor families, we also take pride in knowing that we are providing in-demand facilities to better the lives of those in our communities. If you have any questions about the content in this article, please reach out to our team at info@ctp-fl.com. As always, we are here to serve you.