A Delicate Balance: Effective management of Senior Housing

10 min read

On any given morning, the manager of any rental apartment or housing complex can expect to be barraged with a diverse array of questions, comments and complaints from tenants. They may range from no heat or cooling or hot water, to dripping faucets, noise, cooking odors or smoke from next-door, burned-out light bulbs in the hallway, lost keys, balky appliances, perceived rudeness from a staff member or someone else’s car in an assigned parking space. Each manager has his or her own roster of recurring “favorites”.

When the residence in question caters to seniors, the possibilities expand considerably: grab bars detached from the walls, a spat between two dining room table mates, an aide who didn’t bring medicine on time, the bus to the supermarket or movie theater that never showed up, a cancelled program and the big worry – falls.

When the facility is an affordable senior residence, the issues grow even more complex. One resident may have no way to get to a necessary but unplanned doctor or dentist visit. Another might be out of medicine and have no money to renew a prescription. A third might not be able to pay this month’s rent.

If there is one take-away from all of this, it is that if you’re going to be in this game, you’d better know what you’re doing.

“This is tough stuff,” states Jeffrey K. Hettleman, a partner and Executive Vice President of The Shelter Group, a prominent developer, owner and manager of multifamily and senior living communities in the eastern United States, headquartered in Baltimore, Maryland. Hettleman helps lead his company’s affordable housing business and capital relationships, among other duties. “If you’re just doing one deal, better to partner with people with experience.”

Those with that experience point to several factors that both define and add to the complexity of managing and marketing senior housing facilities geared to low income and subsidized residents.

When you build affordable housing for the general market, the key consideration is simply affordability – for a residence in an attractive, safe environment with basic amenities. For a senior affordable facility, there are the added considerations of healthcare, transportation and food service or nutrition. So a major challenge becomes: How do you balance the needs and desires of residents with financial stability and return?

Or, as Hettleman puts it, “We have a longstanding history and culture. For us, affordable senior housing is part of our core mission. But we cannot accomplish our mission without assuring that properties operate in a financially viable manner.”

“Mission” is a term that comes up repeatedly in conversations with those in the tax credit and affordable senior housing field. Pam Monroe is Vice President of Housing for National Church Residences, a leader in integrating home and supportive services for seniors and vulnerable individuals, based in Columbus, Ohio. She oversees daily operations of the nonprofit organization’s 340 communities in twenty-eight states and Puerto Rico.

“We recognize that older Americans need housing, and that age group represents thirteen percent of the population. By 2030 it will be up to twenty percent. And we are looking for those who can’t afford to spend five, six or seven thousand dollars a month.”

Monroe’s avenue to effective management is evaluating individual needs – the needs of each facility and then each resident within the facility. To accomplish this, National Church Residences employs service coordinators at most of its properties and has developed a “Care Guide.” It is a record and chart of each resident’s level of independence across a wide spectrum of daily activities of living. It is updated regularly, which lets management, in Monroe’s words, “cater to specific needs.”

The market rate model for senior residences is to charge a certain rate for a room, suite or apartment, which comes with basic services and, often, dining. As more services or individual care are required, they are billed on an a la carte basis. Clearly, this does not work in the affordable sphere. As a result, the best owners and managers have developed other means to close the gap.

One key is to know and understand one’s target audience. The average age for seniors in Shelter’s affordable senior communities tends to be lower than in its more service-enhanced market-rate senior living properties. So even though the residents have lower incomes, they are more independent and need fewer services. “Our affordable age-restricted affordable communities are intended for those who are independent,” Hettleman explains. “For those who need extensive care, other types of programs and facilities are more appropriate.”

Diane Edwards, Shelter’s senior vice president responsible for managing the apartment communities, employs both creativity and flexibility to provide as many amenities as possible. For example, “We might offer a beauty salon free to the service provider  in exchange for providing services at rates our residents can afford. That’s a win-win for everyone.”

Part of the solution to providing a wide array of services to seniors who are not paying market rate is economy of scale – spreading costs over a number of properties. In addition, many of the larger operators now employ advanced software packages that integrate billing, expenses, receivables, operations, maintenance, personnel, customer relationship management, medical oversight, tracking of falls and other functions into one integrated system, across all of their facilities.

“We work very hard to provide services at our affordable properties,” says Hettleman. “We have full-time people working on defining and implementing best practices, including empowering residents, health and exercise, food services and computer classes. We apply what we learn in each community to the others.”

For example, Shelter has established the Shelter Elder Care Foundation, which has obtained grants to purchase several vans that  efficiently rotate among twenty-four communities, spreading the cost. Each community can decide how and when it would like to use the van.

“Transportation is huge,” says Pam Monroe. “For the grocery store, doctor and dentist, cultural events. Some of our properties are very outgoing. Either we have busses or we arrange transportation from local companies. We are always looking for local entities that provide senior services so we can try to partner with them.”

And there are a lot of resources in the community if you know where to look for them, which is where experience again becomes critical.

Diane Edwards enumerates, “The Property Manager at each community coordinates blood pressure and medical screenings and brings in counselors to help with such issues as budgeting and nutrition. Through various programs, we can get our residents cell phones at no cost, which frees up some money for other needs. While we might have some baseline template out of the gate, you don’t know who your residents are going to be, so you try to integrate services specific to the needs of each community. And those needs will change. We try to maximize what we’re able to do, and property managers will spend a lot of time talking with residents.”


That manager is a crucial element of the equation.


“Generally, given the limited number of employees and complexity of the demands on the on-site management team, we need someone with a combination of skills, who can do a lot of things well,” Edwards explains. “In additional to all of the other skills, there is the regulatory aspect; understanding compliance. You need people who can manage a fair amount of detail, regulation and paperwork.”


But, she notes, her first priority is the candidate’s inherent qualities. “We can teach skills. We can train tax credit understanding and compliance, but not personality.”


Pam Monroe agrees. “You have to recruit passionate and caring individuals who honor the seniors who live in our properties. But you have to manage the compliance side, too. Marketing, managing and compliance are not always overlapping skill sets. So our practice has been ‘hire from the heart,’ and teach them the compliance skills they need. And we give our property managers a lot of support, including regular round table discussions among managers and our own in-house ‘university’.”


Each level of subsidy adds a level of complexity. Monroe points out, “In the tax credit world, you have to understand the regs or you’re going to have problems with HUD, state agencies and/or the IRS. In addition to our own tax credit properties, we manage about seventy-five properties for other owners.”


At the bottom line, though, the differences between affordable and market-rate senior housing are more of degree than kind. Jeff Hettleman states, “The idea that in market-rate, you can charge whatever you want for rent and basic services, then add on all kinds of special services on top of that, is misleading. We have to be competitive in every market. We know what everything costs and what people are prepared to pay for it. So


that is built into our services, our underwriting and our marketing.”

By the same token, affordable and not-for-profit communities have to be just as economically prudent as their market-rate counterparts because grants, subsidies, contributions and even state qualified allocation programs are seldom consistent sources of income.

Banker, publisher and consultant George Yedinak summed it up in a January 2014 column for Solutions Advisors and Retiring by Design, senior living analysis and management consultants: “Both models serve essentially the same customer and both have similar financial structures that enable them to deliver their levels of care.”

Even though supply and demand makes affordable communities easier to market, Edwards says, “We still have to reach out, but the effort tends to be more grassroots-based.” That includes contacting local hospitals, senior centers, grocery stores, larger employers and adult children.

Pam Monroe comments, “Each property is unique in how it needs to be marketed. Some are in communities so small there is no grocery store within ten miles. So we reach out to local resources, to the VA, to churches. We let doctors and health services know when we have vacancies.”

One particularly successful recent approach to marketing across the senior spectrum is focusing more on the personalities of the residents than on the facilities and services. In other words, if the resident appear happy and well taken care of in their environments, there is a tacit implication that the facilities are first-rate and the operator doesn’t have to market each individual feature or service.

Danielle Cantin, who has a background in advertising and a commitment to senior care dating back to childhood, spent four years as Director of Marketing for American House Senior Living Communities of Bloomfield Hills, Michigan and now runs Creating Cloud Nine, a branding and marketing firm. At American House, she created a total brand image based on honoring and individualizing residents and inspiring employees to higher levels of service. This “360 degree” campaign resulted in higher occupancy, increased income, decreased promotional rent credits and attracted national investors, enabling the company to grow by twenty-one percent.

The youngest of seven children, Cantin spent considerable time with older neighbors who were “awesome.” As a result, she later volunteered at a senior living center and took care of her mother and father near the end of their lives.

The marketing campaign she devised was based on core values: dignity and respect for each human being at every stage of life. She also describes the approach as, “Do as much as you can, with as much fun as possible.”

“By focusing on the individual identities of our residents with a consistent message across all media – television, print, banners, press releases and social media – we capture our essence and deliver an identity. This is what adult children are looking for when they help their parents choose where to live. But it only works if everyone involved believes in the mission and is willing to ‘own it’.”