Baked-in Costs vs Sustainability

Why boomers care about fixed costs and want sustainable retirement housing

The fear of future bills. Sustainability includes more than the environment. Baby boomers preparing for retirement are keenly aware of their monthly budget after a life of work. It’s not just the income side, from work, savings, Social Security, or investments. It’s also the expense side. Some of us obsess over the spreadsheet projections. Controlling the expenses side is essential to getting the time value of money to be your friend on the investment side. But even the less mathematically inclined perceive the rising tide of bills and the shrinking pool of funds. We sense the limited base of income and assets which must pay for all the bills to come. We’ve got one lifetime of savings to sustain us. We don’t get another lifetime if it goes wrong. Thus, we fear new, unfamiliar bills. Bills that are unpredictable or subject to change on someone else’s whim are particularly bad. Sustainability, by contrast, is good.

We hate utility bills

In our life, we hate things like utility rate increases. We prioritize energy efficient appliances, lighting, and construction (or reconstruction and remodeling, as the case may be). We buy the 95% efficient furnace, the LED lights, the insulation to drive down the monthly gas and electric bill. Those rate increases take back the savings we work so hard to capture.

Why does all this matter?

Yes, we’re conservationists or environmentalists. But we ultimately measure results in control over our own budget and destiny.

Boomers care about sustainability

Senior Living Industry? Not so much.

We care. We’re not alone. We see other baby boomers passionately caring about sustainability. Both personal budgets and environmental.

The Senior Living Industry largely ignores sustainability and operating costs.

Why doesn’t the senior living industry care in the same way? The various senior living communities we’ve toured do not demonstrate much concern about sustainability or future operating costs. Instead, these future operating costs get passed onto residents in monthly fees. They’re baked into the mix. As fixed or structural costs go up, operators just pass the increases along. It’s up to the residents to make their budgets work with the new, higher fees.

It’s your problem. Rising operating costs? Communities say, “Hey, residents you figure it out.” But, wait! The developer and the operator were in charge of the decisions that locked in these future costs.

We want energy efficient structures and low maintenance buildings and landscapes. Even if we’re not doing the maintenance, we’re paying the bills.

Demand Sustainability

Protect your assets and the environment

Developers won’t change until you say no to projects that aren’t built or operated the way you would do your own next home.

Two Examples

This was a hot topic of discussion for us in the last couple of weeks for two reasons. We toured a new Continuing Care Retirement Community (CCRC) that sent mixed messages on sustainability. And we interviewed a design team that understands the sustainability imperative from both the conservation viewpoint and the future operating costs viewpoint. The new CCRC got it half right. The design team is spot-on.

Almost but not quite – a lily out of context

We toured a new CCRC by a major developer and operator. It’s set in a pothole prairie landscape but features a suburban manicured lawn. The Commons feature energy efficient ground loop heat pumps. The Commons is Green Building Council LEED Silver certified. But not the resident units. LEED is an acronym for Leadership in Energy Efficient Design. Portions of the commons are covered by a green or living roof. But that golf course perfect grass lawn doesn’t match the green roof or the surrounding native grasses of the nearby protected wetlands. While the salesperson may have been the absolute best we’ve encountered, sustainability wasn’t part of the pitch. Even when we brought up future monthly rate increases, sustainable design wasn’t part of the answer. Why go to the effort of LEED certification if you’re not going to sell it? This is on the marketing and design team, not the salesperson. Why do LEED on only half of the loaf?

Missing continuity

We concluded sustainability wasn’t a central, unifying principle.

It is one of our central principles. We concluded the developer is used to managing rising costs by passing them on to paying residents rather than prioritizing controlling the sources of future cost increases when making structural choices. That’s the industry standard. It’s not what we’re looking for in leadership on sustainability. We want our manager or operator to care just as much as we do.

We wanted to love this CCRC from everything we’d read. There was a lot to like. We loved our salesperson. But we were ultimately disappointed because the project fell short of what it could and should have been. It was just okay. Good. Not great. Pedestrian. Not stellar. It lacked a unifying theme or principle to bring it all together. Sustainability wasn’t a continous goal.

BSA Planning & Design and LandEconics

But some industry players get it. And get it right. We stumbled upon a design team emphasizing the importance of a fully-integrated design theme. Brad Smith of Brad Smith Associates Planning and Design and his partner, Scott Girard come to the senior living industry informed by experience with Disney theme parks. What does Disney have to teach the senior living industry? Apparently, a lot.

To hear Scott Girard explain the planning of a theme park, the questions aren’t that different than the resident experience on a senior living campus. Disney World’s Main Street offers spaces for families and friends to meet and make decisions before scattering to Tomorrowland or Frontierland. The focus on the customer experience is a function of the Disney Way principles that put the customer’s happiness first. But it’s easier said than done. Resident-centered care and hospitality are dominant themes in much of senior living. But consistency in delivery is hard.

PLACECreation™ — Fully-integrated Design Theme

Brad and Scott are landscape architects with a national practice and special focus in senior living and healthcare. Site planning, campus programming, sustainability, and ultimate landscaping are their profession. But their jobs are immensely easier when a project’s designers work as a fully-integrated team inspired by a common theme, tested against consistent principles. Sustainability should be one of those principles. Architects, engineers, and designers shouldn’t work in isolated silos.

New urbanism as practiced by Scott Girard and Brad Smith is known for creating a built environment with a sense of place. The sense senior living communities should convey? We should see a promising and happy life ahead on first viewing.

Brad explains the lesson from Disney, whether it’s theme parks or planned communities like Celebration, Florida. It’s all about PLACECreation™. The buyer has to arrive in the space and feel the emotion, “This is where I belong. It’s safe. It’s comfortable. I can enjoy myself here.” Design must be fully-integrated with a clear message. A design that sends mixed messages or false notes dilutes the message.

Landeconics™ — future cost control

To this focus on the customer experience, BSA Design adds another tool. They offer proprietary software to evaluate the future maintenance or life-cycle costs of alternative landscape designs. Not all landscapes are created equal from the viewpoint of future required maintenance.

Brad explains, “There are three costs associated with any landscape designer. First, our design fee. Second, the cost to build and install the design. And finally, the cost to maintain the design over the life of the project. Too many customers focus on the first two. They don’t understand that it’s the third one that is a permanent burden on operating expenses. Designs may vary by 500% in future costs. Most designers and most developers don’t even know to ask the question. We not only help ask the question, we can answer it with our LandEconics™ software.”

We’re going to look at some projects recommended by Brad Smith and Scott Girard as “done right.” In the meantime, they’re joining our pantheon of industry leaders in the design category. We’d be happy to have them work on a project in which we planned to live.

Conclusion: Sustainability must be a carried throughout a design and operations

Lessons for senior living consumers?

When considering a retirement or senior living community, look for continuity. Insist on sustainability.

· Is sustainability a theme? Does it carry throughout the entire project and ongoing operations?

· Do the developers spend your future money like their own current money? Did they sweat sustainability questions like, “What’s the effect of each decision on future operating costs and cost control?”

Buyers increasingly care about sustainability, including future operating costs and inflation control. Especially the incoming cohort of baby boomers. The alternative is what we would build for ourselves. If developers don’t fully realize our vision for a sustainable lifestyle and planet, we’ll go elsewhere.

Boomers will say no to a project that sends mixed messages or ignores sustainability.