There is tremendous pressure in retirement communities to continue attracting younger residents. This has created what I call the “great construction arms race.”
The best way to imagine this is to think of a completely new community. Most residents tend to be younger in a new community. However, as the community gets older, so do the residents. It takes a few years for apartments to open in independent living, and when they do, the residents are older than they were when the community was new.
Now the marketing department has older seniors living in the property. When it brings in potential residents, the potential residents worry that the existing residents are too old for them.
This starts a vicious cycle whereby the residents get older as the community ages, and it gets more difficult to sell vacant units to younger seniors. It’s basically the same problem as aging in place.
As a result, existing communities have big incentives to remodel or expand their properties in order to attract younger residents who want newer apartments and fixtures. In some cases, this remodeling is long overdue. I’ve seen communities that have gone decades without a major remodel that desperately need a facelift in order to stay in business. In other cases, the remodel is a sort of marketing tool that helps younger seniors get comfort with the thought of moving to a retirement community.
Whatever the case, you can expect construction at your CCRC during your years there. It’s not absolute, but it’s likely. I remember one community where the resident council was angry that management had begun making plans to complete a substantial remodel of the entire campus. It was a multimillion-dollar renovation, and, to the casual observer, the campus didn’t need it. But, the problem was that the campus lacked the infrastructure to grow in the future. While most of its apartments and cottages looked fine, they weren’t built to last more than 20 years. In order to remain competitive in the long haul, the community had to remodel.
Residents were justifiably upset. The remodel entailed residents shuffling from apartment to apartment as different wings of the main building were redone. Everyone was livid at the thought of being awoken to the sound of construction crews.
Yet, the remodel was in the residents’ best interest because it ensured that the community continued to attract new residents. That meant that entrance fees would be repaid, and the community could remain a viable player in the local market.
Thus, as a resident, you should expect at least one construction project while you live in the community. This isn’t necessarily a bad thing and can actually make your investment more stable. But, as with anything, the resident committee should be involved in the process and understand the implications to the community’s bottom line.