Aging population drives need for assisted-living, but independent facilities may face difficulty

HAMPTON — The market for housing for people 65 and older in Hampton Roads is large and growing, say experts and members of the senior care industry.

“If you watch demographics, you know that the society in the U.S. is on an age wave — some call it a ‘silver tsunami,'” said Rick Jackson, executive director of Riverside Center for Excellence in Aging and Lifelong Health in Williamsburg, alluding to the huge wave of baby boomers who are reaching retirement age.

A report from the Weldon Cooper Center at the University of Virginia, which tracks the state’s population and demographic changes, said in 2009 that the number of Virginians age 65 or older is expected to double by 2030, from 900,000 in 2009 to 1.8 million by 2030.

That’s similar to the national trend. A U.S. Census Bureau report listed more than 40 million Americans aged 65 and older in 2010, which it projected would increase about 80 percent, to 72 million, by 2030.

Despite the demand, a nonprofit group called the Peninsula Home for the Aged shuttered the Shelton on the Bay assisted-living facility in Hampton earlier this year. Officials with the group say they likely won’t open a new assisted-living facility in its place and will probably lean toward independent senior living at the recommendation of developers, who don’t seem interested in building more assisted living.

“If you look purely at demographics, you’d say surely there’s a need for assisted living. Just looking at the demographics, you’d say, ‘How could they close that?'” Jackson said.

But other factors are at play. Many aging and retiring people want to stay in their homes as long as possible and avoid living anywhere institutional, Jackson said.

“Companies, private and nonprofit, are moving in that direction, to enable people to remain at home for as long as possible,” Jackson said. Improvements in available home care and technology are driving the age-in-place trend.

“I was very sorry to see that because in many ways I think there’s not enough assisted-living facilities,” Jackson said, but the trends are against a small operation like Shelton on the Bay.

“The standalone guys really struggle, because they don’t have the financial standing and support to have bad months,” Jackson said.

According to Shelton on the Bay officials, the nonprofit’s operations were unsustainable due to costs associated with the aging building — the main section was built in 1953. Public tax filings from 2013, the latest available, show the organization more than $260,000 in debt.

“Many of the successful ones now are part of a larger health system like Riverside or Bon Secours,” or are part of a network of private or faith-based facilities, Jackson said.

Smith/Packett is a Roanoke-based senior housing developer that builds and operates facilities across the eastern United States.

Court Rosen, Smith/Packett’s vice president of strategic initiatives, said many of the company’s facilities are a mix of assisted living, independent senior living and what’s called “memory care” — specializing long-term nursing care for those with Alzheimer’s, dementia and other memory conditions.

The group operates the Chamberlin on Fort Monroe through a sister company, recently opened a facility in Suffolk and has senior living projects in Virginia Beach and Yorktown under construction.

“From a market perspective we think (Hampton Roads is) a very strong market,” Rosen said.

Rosen said he wasn’t familiar enough with Shelton on the Bay to comment specifically on that situation, but he acknowledged that it’s easier for larger interests operating multiple facilities to get into and stay in the assisted-living game.

“Certainly in most areas, economies of scale enable you to get certain pricing on things once you’re buying a certain amount of soap for communities or cleaning supplies or food,” Rosen said.

Rosen also said location is also critical and market research helps Smith/Packett figure out exactly where to locate their homes.

“Folks expect to be near shopping and dining, but also near medical services,” he said.

The now-vacant Shelton on the Bay home is on 17 waterfront acres in a largely residential part of Hampton at 1300 N. Mallory St., roughly between Buckroe Beach and Phoebus.

Hampton saw a new complex of independent senior living apartments open just this summer called the Woodlands at Phoebus. David Jester is the president of Marlyn Development in Virginia Beach, which developed the Woodlands and several other senior living facilities throughout the state.

He said they target independent senior living because they see a demand there, and the benefits outweigh those of trying to get into assisted-living.

“(Independent living) is the segment of the market that we’re interested in. If you go beyond independent living with meals and additional services, health care – the costs, the licensing are all greatly different,” he said. Part of that, he said, is finding customers who would be able to handle monthly payments of $3,000 or more for assisted living.

A state program also enabled Marlyn Development to issue tax-free bonds to fund construction of the facility by ensuring that 20 percent of the apartments at the Woodlands would be considered affordable housing, with the remaining 80 percent rented at market rates – something the Peninsula Home for the Aged may be able to tap into for development of its site.

Jester said his company has been in talks with the nonprofit behind Shelton on the Bay, helping them to figure out what to do with the property.

“We’ve given them a lot of options,” he said.

Murphy can be reached by phone at 757-247-4760.