On November 24, 2007, Margaret Walker, President, associated residents of Covell Gardens, Davis, a senior living facility in Davis wrote a letter to the Davis Enterprise protesting the decision by Atria Senior Living company based in Lexington, KY to raise rent by 8 percent for the second straight year.
Ms. Walker writes:
The Davis Enterprise story quotes him:
When you are a business that relies on seniors for your profits, you have to recognize that the downfall of that market is that you cannot do things the way you would do them in other sectors of the economy. You cannot increase rents by more than their cost of living adjustments. Otherwise, what you will do, is put elderly people on the streets.
This is not a knock on Atria. I am sure that Covell Gardens is a fine place, well run, but when you deal with people on fixed incomes, you must understand that large increases in costs put them in peril.
There are ways to deal with increased costs in the short term, and one way, is to instead of increasing the rent by 8 percent some years and likely zero in other years, use the years where costs are not going up to bank for when costs are soaring.
The second thing that comes to mind is that the city of Davis needs step in to protect the vulnerable--and the most vulnerable are people on fixed incomes, some of whom do not have a lot of savings, and many of whom are not in great health.
Again, the upside of the senior market, is that it appears to be a growth industry but the downside, is that sometimes if you serve seniors, you are the one that needs to bite the bullet during lean years because they cannot. Atria should have known that they could not get away with back-to-back 8 percent rent increases. That was never a wise plan.
---Doug Paul Davis reporting
Ms. Walker writes:
"The residents of Covell Gardens senior living community are dismayed by the management's announcement of a rent increase of 8 percent, to take effect in January. This follows an 8 percent increase in January 2007. We are an economically diverse community and this increase will cause a hardship to many. Those on a fixed income will face a noticeable decrease in their quality of life as they struggle to meet these higher costs. The Social Security increase will be only 2.3 percent.Another resident, Arthur Zalkan was quoted as saying:
We feel we are part of the Davis community. Some have owned homes here, many have family living nearby. The pleasures of living at Covell Gardens are many, but we must protest the exorbitant proposed increase in cost.
The owner, Atria Senior Living, is a private company based in Lexington, Ky. It is legal but unethical for them to impose this burden on senior citizens who are living on a fixed income. "
"We expected an increase... But we didn't expect Atria to gouge us--and that's what they're doing."The facility's executive director, Robert Godfrey responded by citing increased costs and there is no doubt that is accurate.
The Davis Enterprise story quotes him:
"I'm certainly empathetic... But it's an unfortunate reality to business right now. Lots of people we do business with are now charging us fuel surcharges, for example."To turn this around on Mr. Godfrey, while I am empathetic to your cost concerns and understand that you are trying to run a business and make a profit, you also have to understand that you are running a business geared towards seniors. And when you run a business geared towards seniors, you are acknowledging that the residents there are on basically a fixed income. That means that they get only a 2.3 percent increase in their income--not near enough to cover an 8 percent increase, let alone for two years in a row.
When you are a business that relies on seniors for your profits, you have to recognize that the downfall of that market is that you cannot do things the way you would do them in other sectors of the economy. You cannot increase rents by more than their cost of living adjustments. Otherwise, what you will do, is put elderly people on the streets.
This is not a knock on Atria. I am sure that Covell Gardens is a fine place, well run, but when you deal with people on fixed incomes, you must understand that large increases in costs put them in peril.
There are ways to deal with increased costs in the short term, and one way, is to instead of increasing the rent by 8 percent some years and likely zero in other years, use the years where costs are not going up to bank for when costs are soaring.
The second thing that comes to mind is that the city of Davis needs step in to protect the vulnerable--and the most vulnerable are people on fixed incomes, some of whom do not have a lot of savings, and many of whom are not in great health.
Again, the upside of the senior market, is that it appears to be a growth industry but the downside, is that sometimes if you serve seniors, you are the one that needs to bite the bullet during lean years because they cannot. Atria should have known that they could not get away with back-to-back 8 percent rent increases. That was never a wise plan.
---Doug Paul Davis reporting
