Retirement Communities

Leisure-oriented Retirement Communities (LORCs) emphasize the provision of the opportunities, services, and facilities to pursue a wide variety of leisure activities. A great deal of personal support may be found in the LORCs, but supportive activities tend to be informal. Gerontologists have been studying these kinds of communities for over a half century. The early communities were often affiliated with fraternal or religious organizations and unions, and usually provided low-cost housing and activities for the residents, who were often members of the sponsoring organization. Around 1960 there was a sudden spurt in the development of LORCs as a result of changing attitudes toward retirement and an increase in the number of healthy older persons with adequate income to pursue an active lifestyle.

Entrepreneurial developers began to establish LORCs in the Sun Belt states in the 1960s. More luxurious, ‘‘club-like’’ environments had facilities that were designed to encourage and enhance leisure pursuits. Gradually there was a shift from modest-priced housing for retirees to luxury homes. This has resulted in the creation of two broad types of LORCs: those for lower income levels that provide low cost housing and a limited range of activities, and those for affluent residents that have a rich program of activities, services, and programs. Some of the more affluent communities may have multiple golf courses, a large auditorium to attract celebrity entertainers, and so forth.

As residents have aged in all kinds of communities, there has been an increasing awareness among both residents and developers that attention must be paid to the health and physical needs of residents who are aging in place.

Another important trend among the planned retirement communities are the development of ‘‘life-care retirement communities’’ and ‘‘continuing care retirement communities’’ (CCRCs). Both the for-profit and nonprofit segments of the industry have moved into development of this kind of retirement community. The early forms of life care communities were denominational in origin and were planned to care for specific groups of individuals. The life care aspect usually required that the resident give a large percentage of his or her assets to the community for housing and life care.

As CCRCs developed and spread, more flexible arrangements have developed. Residents pay a specified entrance fee and a monthly fee, with a variety of arrangements as to whether some of the entrance fee is recovered when the person dies. The idea governing CCRCs was a self-insured health care component. The CCRC receives revenues in advance of the services required, and the resident is assured housing and life care in a variety of settings and the availability of assisted living and nursing home care. Applicants for residency in CCRCs are required to provide a medical history, have a pre-entrance physical examination, and furnish detailed financial information about assets, liabilities, and income.

CCRCs are a form of long-term care insurance, with some states assigning regulatory authority to the State Department of Insurance. The CCRC business has become more sophisticated and tries to predict long-term costs accurately. Thus there is a need to have a rather stringent health and economic criteria to avoid financial and service delivery problems. Acturial predictions must be carefully utilized in order to assure both solvency and the guarantee of housing and long-term care if it is required.