Integrated Retirement Communities - Affordable Segment & EWS

Introduction

? Statistics in brief: 1.30 Billion senior citizens in India, out of which 70 % are in rural areas, 28 % on their own or with their children in urban areas and about 2% in retirement communities set up by private players for Affordable Segment of seniors 

? Old age Homes run by Government, charities or by NGOs are not up to desirable standards and are also grossly inadequate 

? The number of incidents of elder abuse in rural and urban areas is a cause for concern

? India's ageing population is growing. In 2025 the percentage of children below 5 years and senior citizens would be equal to 8%. But in the next 25 years, the elders would touch 20% and the children below 5 years would fall to 4%, leaving a huge mismatch in demography

? India has a growing middle class - the fastest in the world and a young population. By 2040 India will have 65% below 35, over 20% elders and, a huge gap in between. 

? After 2040, the younger population would decrease as the Total Fertility Rate or TFR is falling rapidly. While the ideal is 2.1 children per woman in her childbearing years, already it has dropped to below 1.76 in many Southern States. Even in Bihar and UP TFR is falling. This would lead to a skewed demographic dividend. 

? Education and opportunities are making rural India look for opportunities in Urban areas. The joint family system and even the village loyalties are getting affected as the class divide is seen between families, where children have done well in education and those who have lagged behind. This will put more pressure on the elder population

? The affordable segment population is used to a lifestyle, which requires some domestic help like housekeepers, who are increasingly becoming unavailable thanks to the younger population unwilling to take up such jobs. Caregivers are difficult to find for senior citizens who are in homecare The issues related to advancing age are making elders go to retirement communities. But the cost of care like assisted, memory and palliative care being high, the net worth of individuals is getting eroded. The trend is to move to retirement communities only when physical or memory disabilities get manifested or the lifestyle that one is used to is getting affected by the non-availability of labour. Also many do not want to spend on capital investment if at old age and prefer to, opt for the lease model in retirement communities and, save for care requirements of the future. 

? The absence of structured social infrastructure for the aged is becoming a big problem with changes in demography and attitudes. Even pension has become contributory and most of the elders do not get any pension. The dependency on others including kith and kin for living causes lots of problems for the elders and the carers from the family.  

Physical and memory disabilities of elders lead to spending money on them for providing caregivers. Physical and verbal abuse begins when the elder in the family gets any form of disability.

Concept of Integrated Retirement Communities (IRC): 

1. Create an Autonomous Fund at State Government Level with say 10% equity from the State Government and the balance to be sourced as any other private fund would do, including funds from abroad at low-interest rates, like the Tamil Nadu Infrastructure Development Fund

2. The concept is to create an IRC on 99-year Lease on land allotted by the State Government and use funds from the Infrastructure Fund for the creation of this IRC with care facilities for both the affordable and EWS elders from the State that can be planned in each district over a period of time, based on a Pilot project. The aim is not to give the dwellings or services and care free of cost but to charge fully for the affordable class and give concessions or subsidies to the EWS segment. 

3. Both segments to live adjacent to each other but with clear demarcated boundary walls. This is primarily because one segment is paying the full cost and the other is getting subsidies or concessions and different lifestyles would cause problems if they are made to live in the same compound wall.

4. Provide services for both sections independently but create and run common care facilities like Assisted, Palliative and Memory Care or both segments

5. Create a revenue model for the amount given by the Autonomous Infra Fund as a term loan at concessional interest rates to an established Senior Living Private Operator.

6. The Infra Fund should have the mandate to fund projects of social concern like senior housing, care centres, Persons with Disabilities (Special Needs Children), Working Women’s hostel, EWS housing, Shelters on payment etc. 

7. The State Government to identify a land parcel with road connectivity, basic infrastructure like roads water, electricity, public transportation, sewage system, and garbage disposal arrangements. The land selected could be about 15 acres in each district and not in the wilderness without social infrastructure. The pilot project may be on a five-acre plot.

8. Identify a senior living or care operator with a good track record 

9. Follow the policy that nothing is free and where subsidies are to be given, the same should be ploughed to the individual in his/her bank account by the Government as bank accounts are linked to Aadhar Cards

11. Lease tenure should not be more than 15 years and should be based on the age of the senior citizen. The lease can be renewed at a specified value in case the senior citizen or the spouse survives beyond the lease duration. Fundamentally, senior citizens living in this complex should be around 70-75 years of age with some exceptions as detailed in this Paper

Factors Considered:

? As a pilot project, it is suggested that the first project be of 200 apartments as one and two BHK apartments. 

? Allot 35 % of dwellings (one BHK) to EWS and the remainder to Affordable Class (70% 2BHK and 30% 1 BHK) 

? The affordable class will pay the lease amount decided and on vacation, will get some refund based on the workings made.

? EWS will pay a nominal amount to be decided and also pay for services including catering at subsidised rates available through various Central and State Government schemes including rations from ration shops that they are entitled to

? The Monthly charges payable will be worked out and finalised and any subsidy given will be reimbursed to the EWS beneficiary by the Government

? The amount taken on loan by the Services and Care Operator from the Infrastructure Fund would be returned as per the terms agreed to. The money will be given at a reasonable interest rate (lower than bank lending rates). The disbursal is to take place as per the stages of development of the project in a separate bank Escrow account created for the project

Role of the Company chosen as the Services and Care Provider:

? The services and care provider company chosen must fulfil certain criteria to be laid down and must have the experience and reputation in running senior living communities

? From concept to design, drawing, completion of the project including construction, infrastructure development, amenities, care and medical centres as decided and, on completion providing services and care to the elders would be the responsibility of the Company chosen

? The services offered will be documented  

? The common amenities will be separate for affordable and EWS segments as payments made are different. However, the quality of services will be ensured as per the agreed standards 

? Care components will be created which would be common to both segments. Medical care in terms of nurses, caregivers and visiting doctors will be organised for both the Communities in the IRC 

The Model: 

1. Affordable Class: 

? 1.5 and 2 BHK apartments as per FSI allowed and within Affordable Housing category of Government of India (Max 60 sq M RERA Carpet Area and 1% GST) 

? Lease of 5, 10 and 15 years that are renewable afresh on completion of lease tenure or terminated if the allottee dies or vacates. 

? Lease duration is based on age - 5 years for 85 yrs age, 10 yrs for 80 and 15 for 75 years. The life span has been taken as 90 years. These can be changed after discussions

? Lease amount will be worked out jointly. 

? Land cost needs to be reduced from the Guideline Value as land cost realisation is over a long period of time.

? Dwellings will be apartments with lifts designed for elders and will also be wheelchair friendly. We can create a common design for all IRCs

? One Toilet will be wheelchair friendly in each apartment and also in common areas

? Common Amenities for providing services will be decided and they will be affordable but need-based (not luxury) 

? Monthly Maintenance Charges will be worked out based on plans and discussions

? Create a Governing Council (See details below)

? Details regarding Maintenance and Catering deposit will be decided after discussions with the Governing Council

? For better social living, both Communities will be integrated to get benefitted mutually 

? Accounting system for both segments will be separate 

? Allotment will be strictly made on modalities worked out and will not be deviated by any pressure from any quarters 

? Agreements and legal issues will be finalised.

? The issue of lease renewal and the governance by a Management Trust will be formed. The composition, their role and responsibilities would be spelt out. The Chief Secretary of the Social Welfare Department will be a member representing the State Government with the Chief Secretary of from Central Government (MOSW&E) plus three members from the State from HelpAge India, ASLI, CII/FICCI.

2. EWS Segment: 

? EWS will be defined 

? No quota on religion or caste or community. Should be strictly on rules evolved and ensured by the Governing Council 

? Design will be of 1 BHK - Living, spacious bedroom, small kitchenette, senior-friendly toilet and a Balcony - wheelchair friendly

? Quality will be ensured as the services and care Provider would be responsible for construction also. Poor quality will result in larger maintenance expenditure

? Reservation: We need men and women to provide various services for both segments to include housekeeping, security, garden maintenance, running of utilities, kitchen staff, waiters, supervisors, medical personnel like nurses, caregivers, and Aayahs ( for Care Centres). The scale will be worked out based on the number of dwellings and the number of residents. We propose reservations in the age group of 50-60 who could be widows and widowers without any dependent children. They will be paid salaries decided. The affordable segment will employ such residents from the EWS section. This way, we are creating employment opportunities. Modalities are to be discussed and finalised. 

? The lease to the EWS section would be on similar lines as the affordable segment. The percentage for each age group will be decided based on the number of dwellings, lease amount to be charged, staff requirements to run the facility etc

Care Components:

Medical care as part of preventive care is the best care. Therefore, we can institutionalise comprehensive preventive care including medical care that would be in digital mode for better efficiency and management. The various Care Components are: 

1) Medical Centre: 

Operated by nurses and caregivers 24X7. Visiting Doctor would be arranged. Emergency procedures for evacuation to hospitals would be ensured. A separate medical centre would be set up. Dental Chair would be available - one for the entire community. This is a payable service. For EWS we need to work out cost reimbursement.

2) Assisted Care Centre: 

? 40 beds - 12 rooms with attached toilets (for Affordable class) and 28 beds in 4 Dormitories with attached toilets (for EWS). The care could be short-term or long-term and, on a chargeable basis. For EWS, subsidised charges are to be reimbursed by Government. 

? Dining, Activity and entertainment would be provided 

? Caregivers and nurses quarters would be planned

? Visit by specialist Doctors from Government hospitals will be arranged. 

3) Dementia Care ( Common for both segments) 

? 16 beds - 4 Independent rooms and 12 on Twin sharing Basis

? Will have Access Control, nurses and specialist caregivers, volunteers 

? On a chargeable basis and reimbursement for EWS

? Activity and dining as well as a lounge would be provided

? Tie-up with a specialised memory hospital would be made

4) Palliative Care: This is end-of-life care. One dormitory to cater for 6 patients and, as an extension of Assisted Care would be set up. Will need pain management professionals common to both segments. 

Legal Issues:

? Clear Title of land documents 

? Lease Agreement - between Operator and the Government, the Government and the Fund created

? Agreement for funding between the funding agency and services & care provider

? Approvals from authorities and all NOCs - Government to get without any cost except as payable by Government rule

? Tax Assessment, CC and applicability of RERA 

? Non-interference Clause 

? Constitution of Management Committee/Governing Council of IRC and terms and conditions including tenures etc

? Termination of the lease, refund of lease deposit minus the deductions as agreed, renewal of the lease, fresh lease - amount to be charged and paid to whom ( suggest department of Social Welfare )

? Payback of borrowed money to Infra Fund - terms, conditions and Interest rates as well as duration - for both segments

Management: 

? The Infra Fund would exit when the money advanced for Project IRC has been returned. 

? The said project is being conceived, executed and operated by Senior Living and Care Provider company, which is a registered company  

? Management of IRC is very important as the lease agreements are signed by the State Government (SW Department) Services and Care Provider and the Lessee (allottee). While the Government would be Lessor and the Services and Care Provider the Confirming Party,

? While the Services and Care Provider would be responsible from Concept to completion and manage the services and care thereafter for a term not less than 30 years ( to be renewed on mutually acceptable terms) if not 99 years, the State Government is the Lessor and the amount that is to be received for the dwelling at the time of renewal of lease and refund ( if any) from the lease deposit of the vacating Lessee would be the responsibility of the Government with the Services and Care Provider, assisting the Lessor in this process. 

? The Management/Governing Council created should function like a Board of Directors to sustain the model without compromising on quality services and care to be provided to the residents. 

Charges for Services and Care 

This needs to be worked out and mutually agreed to between Infra Fund, State Government and Services and Care Provider. The charges for consultancy payable to any Consultant hired for this project would be discussed and paid out of the funds for IRC 

Systems and Processes

  The Services and Care provider would be responsible for all systems and processes for IRC. This document will be prepared by and adopted by the Management. 

  Audit of accounts would be done by an Independent auditor. Services and Care Provider will maintain all documents for the said Audit and it would be ratified by the Management of the IRC

  The State Government also would not interfere in the day-to-day running of IRC except through the Management, where it has its member

  MIS would be finalised and Services and Care Provider would submit all MIS as decided to the management of IRC

  Digital publicity as well as the website, marketing activities etc. will be planned and executed by the Operator. 

  Since this is the first project of its type in India, Government is requested to give publicity for IRC 

Business Plan

The Operator in consultation with Infra Fund would prepare the Business Plan after the basic concept is finalised for adoption. The revenue and expenditure for project execution as well as revenue and expenditure for running of the IRC including Care Centres would be prepared by the Operator and ratified by the Management. 

The budget for running IRC for the first year after completion of the project would also be prepared by the Operator and submitted in due course. 

Colonel Achal Sridharan