{"id":263050,"date":"2020-07-27T08:08:40","date_gmt":"2020-07-27T12:08:40","guid":{"rendered":"https:\/\/canadianinquirer.net\/v1\/?p=263050"},"modified":"2020-07-27T10:36:47","modified_gmt":"2020-07-27T14:36:47","slug":"the-coronavirus-exposes-the-perils-of-profit-in-seniors-housing","status":"publish","type":"post","link":"https:\/\/canadianinquirer.net\/v1\/2020\/07\/27\/the-coronavirus-exposes-the-perils-of-profit-in-seniors-housing\/","title":{"rendered":"The coronavirus exposes the perils of profit in seniors\u2019 housing"},"content":{"rendered":"
\"wheelchair\"<\/a>
This has followed the trend of what\u2019s known as\u00a0financialization\u00a0in the global economy, in which finance has come to dominate in the operations of capitalism, prioritizing investor profits over social, environmental and other goals. In seniors\u2019 housing, financialization has arguably intensified the profit-seeking approach of private owners, with harmful outcomes for residents and workers alike. (File Photo: Steven HWG\/Unsplash)<\/figcaption><\/figure>\n

In May 2020, Orchard Villa, a long-term care home in Pickering, Ont.,\u00a0made headlines<\/a>\u00a0for a bad COVID-19 outbreak. Just two months into Ontario\u2019s lockdown, 77 patients in the 233-bed home had died.<\/p>\n

A report by Canada\u2019s military<\/a>\u00a0revealed horrifying conditions, short staffing and neglect. Some family members blamed for-profit ownership, arguing that COVID-19 had simply exposed, in tragic fashion, the impact of prioritizing profits in the operation of seniors housing.<\/p>\n

Notably, Orchard Villa had been purchased in 2015 by\u00a0private equity firm Southbridge Capital<\/a>, adding it to Canada\u2019s growing stock of \u201cfinancialized\u201d seniors\u2019 housing \u2014 bought by financial firms as an investment product.<\/p>\n

This has followed the trend of what\u2019s known as\u00a0financialization<\/a>\u00a0in the global economy, in which finance has come to dominate in the operations of capitalism, prioritizing investor profits over social, environmental and other goals. In seniors\u2019 housing, financialization has arguably intensified the profit-seeking approach of private owners, with harmful outcomes for residents and workers alike.<\/p>\n

Grey wave<\/h2>\n

Seniors\u2019 housing includes both government-subsidized long-term care (LTC) homes (nursing homes), and \u201cprivate-pay\u201d retirement living. Canada\u2019s population is aging, with a so-called grey wave predicted to require 240,000 new spaces\u00a0by 2046<\/a>.<\/p>\n

Industry experts call this \u201ca rising tide that can\u2019t be denied<\/a>.\u201d Investors are rushing to get on board, both with LTCs, where long waiting lists and government funding ensure steady income, and with retirement living \u2014 where hospitality services (housekeeping, laundry, meals) and private-pay health-care services can drive rents as high as $7,000 a month.<\/p>\n

Financial operators have spent two decades consolidating ownership of Canadian seniors housing. These operators include Real Estate Investment Trusts (REITs), institutional investors and private equity firms.<\/p>\n

In 1997, the first seniors housing REIT launched with 12 homes. What followed was a consolidation frenzy and the rise of financial firms like Chartwell, Sienna, Revera, Extendicare, Amica, Verve and others. By 2020, financial firms controlled about 28 per cent of seniors housing in Canada, including 17 per cent of LTCs and 38 per cent of retirement homes.<\/p>\n

American owners<\/h2>\n

Ownership has also become international. Today, Canada\u2019s biggest owners are the largest health-care REITS in the United States.<\/p>\n

Ventas REIT and Welltower REIT entered Canada in 2007 and 2012, and have amassed major interests in 36,792 suites (225 homes). Canada has also seen a surge in U.S.-based private equity ownership by firms that recognize similarities between our private-pay retirement sector and privatized health care south of the border.<\/p>\n

They are eager to capitalize on the growing number of seniors on LTC waiting lists who require care and are\u00a0forced into private-pay retirement living<\/a>.<\/p>\n

Why should it matter if financial firms own seniors housing?<\/p>\n

Researchers have found that for-profit facilities have\u00a0lower staffing levels<\/a>,\u00a0lower quality of care<\/a>\u00a0and\u00a0poorer resident outcomes<\/a>, in both the U.S.\u00a0and Canada<\/a>.<\/p>\n

Among for-profits, corporate chains are\u00a0worse than<\/a>\u00a0independent operators.<\/p>\n

Financialization, meanwhile, is like private ownership on steroids. In\u00a0other sectors<\/a>, financial firms view homes\u00a0as assets<\/a>\u00a0for generating profit, and their large scale, sophistication and access to capital enable them to pursue it more aggressively.<\/p>\n

In seniors housing, REITs are clear about prioritizing share value, growth and monthly investor distributions. But there are no objectives to deliver better care, dignified environments or good workplaces, which should be paramount in the operation of seniors housing.<\/p>\n

Fatalities higher in \u2018financialized\u2019 homes<\/h2>\n

Pandemic mortality rates are highlighting the serious problems with financialization in the sector. Using data compiled by writer\u00a0Nora Loreto on COVID-19 deaths<\/a>\u00a0in Ontario long-term care facilities as of June 23 and my own original database on seniors housing ownership, I found worse fatalities in for-profit homes.<\/p>\n

In Ontario, for-profits own 54 per cent of beds, but had 73 per cent of deaths. Public homes, by contrast, include 20 per cent of beds, but had only had 6 per cent of deaths. Financial operators (REITs, private equity and institutions) had higher death rates than other for-profits, with 30 per cent of beds and 48 per cent of Ontario LTC deaths.<\/p>\n

There were 875 deaths in Ontario\u2019s nearly 24,000 financialized long-term care beds, or a 3.7 per cent rate of deaths per total beds. This is 1.5 times higher than other for-profits (at 2.5 per cent), and five times higher than the rate in public homes (at 0.7 per cent).<\/p>\n

While\u00a0more detailed studies<\/a>\u00a0are needed to compare features of the homes and their residents, this trend appears to support what\u00a0researchers suggest<\/a>\u00a0\u2014 that financial operators may pursue\u00a0profits at the expense<\/a>\u00a0of\u00a0nursing home quality<\/a>.<\/p>\n

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Read more:\u00a0How some OECD countries helped control COVID-19 in long-term care homes<\/a><\/strong><\/em><\/p>\n

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Orchard Villa was not the only private equity-owned property to experience crisis. Southbridge Capital had outbreaks in nine of its 26 Ontario homes, and a 7.4 per cent death rate \u2014 more than 10 times that seen in public facilities.<\/p>\n

Investors in Southbridge Care Homes are promised a yield-based investment with \u201cupside market gain<\/a>.\u201d While those profits roll in, 176 people have lost their lives to COVID-19 in the firm\u2019s investment properties.<\/p>\n

These numbers underscore the need for\u00a0transformative change<\/a>\u00a0in the seniors housing sector. All seniors deserve the right to affordable and safe housing, high-quality health care and a dignified environment. Staff deserve safe, well-paying and rewarding jobs. The pandemic has revealed the devastating mistake we\u2019ve made in allowing homes to be treated as financial assets for investor gain.<\/p>\n

This article is republished from\u00a0The Conversation<\/a>\u00a0under a Creative Commons license. Read the\u00a0original article<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

In May 2020, Orchard Villa, a long-term care home in Pickering, Ont.,\u00a0made headlines\u00a0for a bad COVID-19 outbreak. Just two months …<\/p>\n","protected":false},"author":33,"featured_media":256119,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18,54365,16],"tags":[],"class_list":["post-263050","post","type-post","status-publish","format-standard","has-post-thumbnail","category-news-ca","category-instagram","category-news","mauthors-martine-august-assistant-professor-school-of-planning-university-of-waterloo","mauthors-the-conversation"],"_links":{"self":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/263050","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/users\/33"}],"replies":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/comments?post=263050"}],"version-history":[{"count":2,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/263050\/revisions"}],"predecessor-version":[{"id":263052,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/263050\/revisions\/263052"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media\/256119"}],"wp:attachment":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media?parent=263050"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/categories?post=263050"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/tags?post=263050"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}