How Opus Newton Makes Housing Affordable For Middle-Income Seniors

Overcoming Challenges

I recently visited one, called Opus Newton, in the Boston suburb of the same name. It has been open for almost exactly one year and looks and feels like a high-end community. But with some tweaks, its creators made the suburban Boston campus affordable for middle-income older adults.

Senior living operators are well aware of the enormous “missing middle” market. But most have been unable to figure out how to make these projects work. Or they are not interested in even trying, preferring ultra high-end facilities, where waiting lists are long and returns can be much higher.

Adding to the challenge: Many lenders remain skeptical, making it hard to find the capital necessary to build for the middle-market.

That leaves millions of older adults with few housing options. As a result, they often are trapped in the homes where they raised their children, even when those houses are no longer appropriate for them, or even dangerous.

And it does not just hurt them. That residential stickiness limits the supply of housing and is one reason why many young people are unable to buy their own homes.

Changing The Dynamic

Opus is changing that dynamic. It has 172 apartments. Like many non-profit CCRCs, residents pay an entry fee and monthly rent. At Opus, 80% of the entry fee is refundable when a resident dies or moves.

Its owners wanted to make Opus attractive to people who’d be comfortable with entry fees of roughly half of median home value in its community, and affordable for those with annual incomes of roughly $50,000 and up.

Thus, entry fees average about $800,000 and monthly rents range from about $2,000 to $4,500, depending on a unit’s size. The monthly fee for a second person averages about $900.

For much of the US, that sounds steep. But in the tony suburbs of Boston, median home values hover around $1.5 million. And it isn’t unusual for CCRCs in the area to charge entry fees well north of $1 million and monthly rents averaging $8,000.

How Does Opus Do It?

CEO Amy Schectman says a key is keeping monthly fees manageable. She says prospective residents know what their homes are worth and thus are prepared for the entry fees. But they worry about affording monthly rent over time.

The facility found several ways to limit operating and construction costs, which kept fees relatively low while still satisfying the demands of its residents.

For example, while it is licensed for independent and assisted living, it does not have designated assisted living units. Instead, residents can receive higher levels of care in their own apartments.

To help make that possible, Opus contracts with a home care agency that provides all the assistance that nearly any resident would need, short of certain skilled nursing. Aides are available on site and can offer care in 30-minute increments, far less expensive than the typical four-hour minimum shifts that home care agencies often require.

Residents must pay for that extra care out-of-pocket. But they prefer to stay in their own apartments. For couples, that also can be a substantial money-saver since they’d otherwise have to pay for two units should care needs increase for one spouse.

Following a growing trend, Opus has no skilled nursing facility, which significantly reduced construction and operating costs.

Resident Volunteers

Food is high quality but not gourmet-style. Think meatloaf and grilled salmon instead of walnut lobster and strawberry pasta.

Each resident gets a $400/month meal credit, which they can use any way they want. While Opus serves breakfast and lunch daily, it offers full dinner service only three evenings a week. Once residents spend their monthly credit, they can purchase additional meals. Dinner entrees run $20-$25.

Another key to both cost savings and resident satisfaction is Opus’ requirement that all residents who are physically and cognitively able volunteer for the community at least 10 hours each month.

Residents serve in a wide range of roles, from working the front desk to setting and clearing the dinner tables to running resident programs. When I visited, there were 29 different activities, nearly all organized by residents. They’ve even put on theatrical productions–led by a resident who is a retired director.

Volunteerism not only saves on staffing costs, it appears to help build community. Every resident I spoke with brought it up as a major reason why they chose Opus.

Indeed, it turned out to be an enormous marketing advantage. The facility sold out before it was completed and currently has a waiting list of nearly 300.

Adding, Not Subtracting

CEO Schectman and much of her team came to Opus Newton from the low-income senior housing world, where their non-profit, 2Life, runs several subsidized campuses in the Boston area.

That background may have given them an important perspective on middle-market products. Rather than thinking about scaling back services and amenities, they saw attractive add-ons.

Still, there are many questions about the model.

What will happen when residents who are relatively young, active, and healthy become more frail and need higher levels of care?

Already, Schectman and her staff are rethinking dementia care. While Opus has adult day services for people with cognitive decline, it does not have designated memory care units. That may change in the future.

Can the model be replicated without an expert and deeply committed staff and highly motivated pioneer residents?

Keep in mind that middle-market covers a wide range of incomes. Some with limited incomes and assets do not quite qualify for Medicaid or housing subsidies. Others are much wealthier older adults who still are unable to afford most communities.

There will be different solutions for all of these seniors. But for what you might call the middle-middle—say, retired teachers, firefighters, or nurses—Opus seems to have created a workable, replicable model.

Full disclosure: I am an unpaid board member of a CCRC that does not yet have a middle-market campus.