What are your thoughts about living in a village owned by a corporation?
Maybe you already are. Is it a good experience? Do you think it is any different to a village managed by an owner/operator or a small not-for-profit? Are there benefits you gain – or lose?
These are important questions because I believe that in 10 years’ time, or it may just be five, just a few corporations will dominate the ownership of private retirement villages. And there will be some big not-for-profit operators who will have the same businesslike approach as the corporates.
The old hands – the private people who have built retirement villages and then operated them with personal pride and passion – say villages aren’t the same when the corporations takeover. Less passion, less caring, the resident experience is not that great.
I think this will be true. But it may be shades of grey; the differences may not be so big and the benefits that corporates bring may outweigh the losses.
The corporate animal
Corporations need systems. They need to control risk and they need to generate a steady income for their owners. This means corporation-run villages are going to be more rigid, to maintain control.
The big thing that will be lost will be flexibility – the ‘bending of the rules’, making adjustments to financial arrangements, and accommodating special requests.
The counterbalance with corporations will be, in most cases, a more professionally run village bringing in better allied services and with better capital maintenance. Health and safety systems, on-site care programs and the ability to replace things like buses when required, rather than run them on their last legs, will be the norm.
The corporates will try harder because they are competing for customers.
A comparison would be the professional management companies that look after apartment buildings. They get things done because they want to win more contracts.
Does efficiency outweigh the benefits of flexibility, passion and warmth? Most probably not. Will we have a choice? Most probably not.
Discussion3 Comments
Sounds like the end of the slippery slope to me. Profit is always going to come first and choice and diversity are very expensive inputs. What a shame the norm is now the institutionalisation of the young and the elderly and it is pretty much accepted you will start off in child care and end up in a nursing home. Even the most upmarket establishment with its fancy decor and restaurant grade meals, is no substitute for ending your days surrounded and cared for by your family. Oh for the good old fashioned days …..
It’s the same for the other sort of RV Villages – caravan Parks and Rec Vehicle villages. 4 or 5 corporations already own the largest parks and raising funds on the ASX to continue to buy up all the “best” ones. Some are being converted to Manufactured Home Villages but all don’t have the same culture as the Ma and Pa locations. Some of these corporations have lost hundreds of millions of investors funds, time will tell wether it’s good for these investors – but we have already seen that it has not been for consumers, employees and the sector as a whole.
Big Business and Retirement Villages do not make a good mix for the consumer but are probably a great mix for the shareholders.
In the 11 years we have lived in our Freehold village we have had 7 different ‘Owners’. The first two, small owner/operators, then came larger corporations and now, after being owned by the largest ‘independent’ R.V. operator for a mere few months, they too have sold out; this time to a couple of New Zealand enterprises.
As residents, we have found that as the larger companies came along the humanity declined and the reach for the almighty dollar increased.
Beware the ‘improvements’ that these companies sometimes wish to make, especially when it comes to paying the maintenance on same because it is once again the residents who will be paying via increased fees. A fine example being our new operators suggesting they pay to put in air conditioning in the Clubhouse. Sounds great on the surface. The bottom line is that this building is most unsuitable to air condition because of various factors (this project has been gone into many times in the past) and any air conditioning bill would be astronomical – which the residents would have to pay. The reasoning from this new S.O. was that it is so hot in summer in the clubhouse that it could put new buyers off! First thought for the company and only second thought that, yes, it would also make the residents more comfortable too – but at what cost, and at whose cost? Lesser money could be well spent on putting solar panels on the roof which would lower the electricity bill and every resident would gain through lower fees. S.O. not interested in this scenario.
Recalcitrant committees are ignored by management and are allowed to breach the Retirement Villages Act with impunity. Complaints about these breaches are ignored by the S.O. and the residents who dare speak out are simply told to ‘go to QCAT’. Large corporations have large bank accounts, retirees rarely do.
Small owner/operators tend to have a more personal ‘hands on’ approach and quickly solve (or at least try to solve) disputes. They tend to have a quiet word with recalcitrant committees and steer them onto the right path; a few gentle words with residents who are not doing the right thing. In other words the smaller operator tries much harder to ensure that peace and harmony reign in their village and that, as far as possible, the residents enjoy their lifestyle and the operator enjoys a viable business.
There is no doubt that in a very few years the big nationals will take over the Retirement Village Industry, giving their first loyalty to their shareholders much to the detriment of the residents. The Retirement Villages Act needs many amendments to uphold the rights of residents and operators need to treat residents with respect as intelligent beings and not simply ‘cash cows’.