Last month in this space, I reviewed a series of market projections for 2014 from Harvard University as well as the industry’s leading associations.
Aging in Place Opportunities
As America's population ages, especially the large baby boomer generation, the opportunities for remodeling projects suited to their changing needs grows. Contributing Editor Tom Swartz asks two industry professionals their opinion on how to make the most of the growing market.
As America's population ages, especially the large baby boomer generation, the opportunities for remodeling projects suited to their changing needs grows. Tom Swartz asks designer Pat Nunan and remodeler Rob Baugher how to make the most of this growing market.
Tom: Rob, define aging in place for me.
Rob: Aging in place came out of the idea to get away from using the term handicapped or special needs. From there it went into universal design, and that has merged with aging in place. We use the terms universal design and aging in place interchangeably now because it's not about aging in place for all of our clients. Typically it is an older individual and we're trying to get that home to fit all of their needs so they can stay in it. But the project we're doing right now — the young man is 16 years old — so it's about meeting his needs because of his infirmities.
|Patricia Nunan, CKD, CKBR, CAPS
Pat: I find it has to do with younger people in their 50s and 60s who are caring for their older parents now and they realize how hard it is to take care of them in older homes. So they're not only modifying the homes for their parents, but they are starting to make some changes in their own homes. Even if it's just small changes — maybe when they're remodeling their bathroom, they're not putting in the big shower wall, they're putting in the threshold shower. They're starting to make some changes now because they know they don't want those problems down the road when their income is limited. Right now they have the income to spend on it.
I work for private pay and I also work for the government. I work for the state of Pennsylvania and for local counties doing home modifications. There it's a very specific need, and these people are desperate to stay in their homes — they don't want to go into a nursing home. So we're just changing limited things so they can take care of their daily living. So I find it's two different worlds, and it's struggling to try to meet the needs of both of those clients.
Tom: So give me your typical customer.
Pat: My typical customer is 60 to 70 years old. This is both government and private pay. They're still working, they're still active, but they're starting to slow down and they realize they have to make some changes. They've had a stroke in the family or something like that. They're typically doing bathrooms — that's the majority of my business. I modify the bathrooms, take out the bathtub, put in a no-threshold area for a shower. I have a case study in the CAPS training manual —one of my very first clients was that typical client that needed to get into the bathroom. It was the older lady.
Tom: Rob, tell me your typical customer and your most asked-for changes and how you handle those.
|Robert Baugher, CGR, CGB, CAPS
Baugher Design & Remodel
Rob: It's a family decision that's being made. The children, who are in their 50s, are doing something to help their parents. In many of the projects, we are actually moving the parent in with the children, so we are finishing out living space in the house or adding on to the house. We did one last year where we added about 1,000 square feet and created an entire suite for the older parent. Typically it's more along the line of adding an extremely large bathroom or closets or revamping one end of the home, tearing out everything, creating what was two baths, a bedroom and a closet — turning that into one bedroom with big walk-in closets and a large bath area. The projects are running from $50,000 to $140,000. We're marketing this to those clients as changing their homes so that their parents can move in with them, protecting their equity, giving their parents privacy so they can all live together — but not throwing the money into a nursing home system.
Tom: Pat, you might have different views on that.
Pat: Actually I agree on one point — bringing the families together so that they don't lose their equity. That's one of the things that I see is the hardest for the families — having to sell out everything and basically give up your life to an assisted living or nursing facility. And once you're in there, you're stuck. You can't come back out again because you've given up all your equity and your finances. There's a lot of other things that are tied to this — it's not just remodeling and doing the physical changes — it's all the services that are attached to it. When you're in your 70s and 80s and still very active, you may still need services like home care or cleaning or transportation.
Tom: Just as a follow-up, Pat, give me your average cost for a normal, average project.
Pat: Doing a bathroom is my typical project from about $30,000 to $45,000 for a gut and replace or converting a large bedroom into a bathroom. The majority of my jobs, especially with my government projects, are working with the 5-by-7-foot bathroom, and maybe we can take a little bit of a closet. We're able to gut and redo those bathrooms for under $20,000. That's basic with no frills. It's getting a little tough to stay under that but we're still able to find a few contractors willing to work with us to keep the price down. But once you get into the large projects, we're up into the $45,000 price range.
Tom: Rob, does your sales presentation differ for aging in place or universal design versus your typical remodeling project?
Rob: No, it typically doesn't — it's a very consultative sale: sitting down and discussing the options that they have. We have found that aging in place and universal design actually fit the needs of all our clients. We're putting certified aging in place techniques into our regular remodeling jobs because they make so much sense when it's done properly. You don't feel you are walking into a hospital setting — a white, sterile room where everything is chrome. You can plug in all of this knowledge and information on a regular job because it makes sense.
Pat: Universal design is just good design — it's not handicapped design.
Tom: Do you use the same presentation or do you do remodeling, Pat, outside of this?
Pat: I do some remodeling. I'm mostly designing and working with other remodelers and then some projects I take on myself. I don't have any employees; there's just me.
Tom: How important is certification for CAPS, which stands for...?
Rob: Certified Aging in Place Specialist. I was extremely pleased with it. I really got a lot out of the course. I was really surprised at the information that I didn't have until I attended the course. We have two or three other people from the company that are now pursuing their designation — they'll have that finished up in June. But it's something that immediately gives — for those clients who have heard about it — a deeper comfort level. It's someone who is specifically trained to meet those needs. And that has opened several doors for us. We have a lot of opportunities to speak to local colleges, design classes, churches, civic groups that we wouldn't have otherwise and to get this information across to them.
Pat: I think CAPS brings a little more awareness to other people's needs. When you go into the CAPS program, you learn a little more about compassion, about the people you are serving. Their needs are a little bit different, the products you use are going to be different, how you approach the project is going to be different. It's just becoming aware of other options out there.
Tom: How does a remodeling contractor get CAPS certified?
Pat: Sign up for it. I took the training at the Remodeling Show. It's three days. People who are already certified in something don't need to take the third day, because the third day is about ethics and business practices, and all of us have had that training already.
Rob: You could go to the National Association of Home Builders Web site ( www.nahb.org). We've had many of the teachers come to the Birmingham area.
Tom: I just did Working With and Marketing to Aging in Place People and Home Modifications. I thought they were two of the finest courses that NAHB has put together in their whole continuing education. It was thorough, it wasn't redundant, it had good examples. It was very statistic minded and this is a very statistical business.
It sounds to me like we agree that this is a market that is going to grow, not shrink. Where would you suggest that someone go to take advantage of the opportunity?
Rob: One of the simplest things to do is to write up a press release and submit it to your local paper. You need to get this information out to the public. I would also contact some of the editorial staff of the real-estate section of your newspaper, or the lifestyle section or living section, and let them know what you've done. We were contacted recently by an extremely popular magazine saying that they've been flooded by people asking about this and they don't know what they're talking about. You've got magazines and newspapers, radio programs, even local television news stations that are always hungry for stories.
You have to change your perspective — instead of coming in as a beggar, you're coming in and solving their problem, bringing them this information.
As soon as you do a project, you need to get pictures of that and get that out in the media. We actually had one of our projects picked up off AP wire. They took the same pictures, rewrote the article, stuck it in their magazine for another group up in Indiana. There's a hunger for it.
Tom: Pat, a contractor is coming to you and saying he wants to network with you. How does he get started?
Pat: How I got started was working with my local college and making contacts with the people at the college. I was very involved with their local human resources department because they were the ones who were in contact with families. Local chambers of commerce, Rotary. I also network a lot with people in different agencies — agencies for cerebral palsy, MS, the blind. Every county has an office on aging. Those are the people who are calling for help, and they don't know where to send them. So I've been very successful marketing in a whole different arena than what Rob has been marketing to.
Tom: It looks like we might have two completely different areas that we're looking at.
Pat: There's a strong need for education with these agencies because they don't know either. They know about how to treat the disability or the aging, but they don't know how to physically help these people.
What I've been doing is teaching small seminars in our area on aging. We go in and give little talks at senior centers. Our Age in Place Council has been setting up classes at high schools. They have continuing education classes that are free. They will publicize for us, they'll set everything up and we'll go in as teams. I'll go in with a remodeler and somebody that handles the technology part, somebody who handles the lifts and the glides. Most people don't realize that things can be changed and it doesn't cost a fortune.
I do a lot of government work but I also get a lot of referrals from other people who have heard about me through the government. The one opportunity that has been really helpful has been working with the local county — it's called an access program, and it's funded by the state. Because of that program, I've been able to get my name out into the public and then I end up getting private pay clients because of it.
Tom: We went to the local hospital to the physical therapist, but what we found was that in a lot of cases, most of these people didn't know where to go for government assistance and they didn't have any money for private pay. The physical therapists get very attached to their clients, and so we were being asked to do a lot of the small stuff pro bono. How can a remodeling contractor or a designer set this up so it's profit-centered and you can make some money at it?
Pat: I do so much government work, and that's paid for by the government. I have a set fee — sometimes it's a win, sometimes it's a lose, but it sort of washes out.
Tom: You're okay with the pay schedule of the government?
Pat: They're not the greatest. This is not Medicare in Pennsylvania — it's a totally different program. We have a set, fair price, and it's OK. It's not the greatest but for me, there's a different kind of satisfaction out of it. I get something out of those projects that I can never get out of the biggest, fanciest remodeling project. You're filling a need for somebody who desperately needs something — not somebody who just wants something.
There are so many heartbreaking stories of people who have been taken advantage of. Central Pennsylvania is a very depressed area, and these people have had contractors come in there and tell them horrible things. So you just have to come in and reassure the people, "We aren't taking advantage of you, and we're trying to do the best thing for you." It's basically just common sense. These contractors have come in and done outlandish things, and we're trying to fix it.
continuation of the discussion from the magazine article:
On the other hand, I have my private-pay clients. Most of those are financially well-off and I can charge a fair price. I would say I've done quite a few pro bono, and I just sort of incorporate that into the rest of it. I'm not going to make millions at this but I feel good at the end of the day.
Tom: Rob, let's talk about feeling good at the end of the day and perhaps blending that in with making money.
Rob: In our company, there's no difference between an aging in place project and a remodeling project. The design is different but the way that the work proceeds is the same. As far as the financial rewards, they are absolutely the same. It's really sort of an untapped market that we're really pleased to be involved in.
Jobs that are smaller items are hard to get to. I have several different handymen who I can call on who will work with us to install just grab bars, things like that. But for the most part, that's not what the bulk of what our business is.
We've always been involved in different charitable situations. I'm working with one of the local utility companies, and we're developing a program to install wheelchair ramps free and getting local volunteers involved in that. And streamlining the operation so that we can work with local inspectors to be able to build a wheelchair ramp in less than four hours for someone who can't afford to pay for it. The local association loves the publicity; it really works out good for everybody.
Tom: Do you get paid to do the wheelchair ramp? Are you donating the labor?
Rob: No, I don't get paid. Actually my design staff has been working on the details, and what I'll do is go to my different project managers and ask them to donate a half day on two Saturdays out of the year. I've approached a couple of the different building companies, and they've said they would donate materials.
I'm a little cautious about getting mixed in with the government programs because I don't know how that works. We have already approached one government program, and they have the funds to do it. We've been working with them now for two and a half months trying to get them to move through the paperwork.
Pat: That's the challenge — there's money there and it's a matter of working through the paperwork. It took us a year before we got to the point where we were actually doing projects. I've been working for Delaware County for four years, and we're getting ready to start our next funding rounds, which will go for another three years. It took a long time to get it started, but the machine is working now and we just keep reapplying for funds from the state. The county administers the funds and that was their problem, too: finding qualified people to run these programs. Some counties don't do it, so that's why I'm working for the whole state now.
Tom: Do you produce these projects differently than a regular remodeling project?
Rob: There's absolutely no difference. We have five different project managers, and any one of them can take on the aging-in-place design. Everything is spelled out on their scope of work, their timeline, and they can jump into the project.
Tom: Pat, do you do it any different?
Pat: No, I don't. We are taking as much time as with an age-in-place client as we would with a typical client, and the things we learn in age in place, we incorporate in other designs. When I'm doing a kitchen, I will put things in there that's typically in an age in place but it's never labeled as an "age in place." It's just part of a good kitchen design, which is part of what I really like about it — you can incorporate things into your regular projects and it's just good design.
Tom: Do you ever have any problem as far as payment schedule? I think the difference is going to be private versus government here.
Pat: No difference.
Tom: Rob, sometimes the compassion overrides the business side, and I say that I'm not going to collect money up front from them. Do you differentiate?
Rob: I don't differentiate at all. I keep it the same all the way through. One thing that I do with my aging-in-place clients that I don't do typically is that if I'm dealing with one individual, I'll ask them to bring in some of their kids to the meeting, or their friends or their banker or their insurance agent — whoever they want to consult on this — and make sure they are a part of the decision because there's such a financial benefit we're offering. I want them to have the commitment of their family in the decisions they are about to make. There are so many people who do run into problems, and I just want to nip that in the bud before it happens.
Tom: Who do you sign the contract with?
Rob: With the individual. Sometimes their children will sign it for them or with them.
Pat: It depends on who's the client. I'm doing a kitchen right now and the child, who is 50 years old, is doing this kitchen for the mother. I have not met the mother yet. I went in and measured and this person told me everything the client wants, but I need to meet the person I'm designing the kitchen for.
If the parent is hiring me, it really depends on that client. If I felt that they were very competent, totally in control, then I would not have a problem just signing the contract with them. But if there was a little bit of uneasiness and I felt there were other people that needed to be involved, sometimes I ask to meet their children. I'll do it under a pretext that I'd just like to get their opinion on this. You have to be careful because you do not want to insult these people. Especially when they get older they sometimes have doubts and questions, so they want to be taken seriously. That's where some of the CAPS training comes in. You don't want to insult them and say you can't trust them or you're not sure about their money and let's talk to your kids. It's a very fine line to walk.
Tom: What advice would you give a contractor as far as aging-in-place opportunities?
Pat: First, talk to people in your local chapters just to find out what education they've had. Then, check into CAPS or a CAPS-type program for education. I'd also talk to people at different agencies and services and find out what opportunities are out there and if it's a right fit for you. It depends on what your company culture is and what is your typical client description.
Rob: I think it gives you a different facet to approach the public. As soon as you get this certification, what we realized is that immediately we were the experts. Before that we were just another remodeling company just doing our job. But with the certification, we became the experts, people started treating us like that — it actually made us go back and continue to study more about this niche.
That's one of the ways you have to look at it — that it is a niche business. It's a huge opportunity; the baby boomers are the largest population that has ever been dealt with from an economic standpoint. You look at this as a practical business opportunity. The financial benefit is huge — we have many clients who have no trouble paying for what they need. But when you couple that with that this is the best thing they can do financially for keeping equity in the family, keeping it so the kids still have access to it.
There are other niches within this niche. You have people who have been in accidents, people who are temporarily or permanently injured from sports. This is not just about aging — this hits everyone across the board. They're looking for an expert that can help them. If you can come in the door and normalize this experience for them, that's one of the greatest gifts that you can give them.
Pat: Most of my clients are people with disabilities rather than aging in place — people who have been paralyzed from a car accident, things like that. These people are teenagers or young adults, and they are living in their home now with this disability, and they know they are going to be living in this home for 50 years. They want to live a normal life, and you try and give them as normal a life as you can.