SANTA CRUZ – COVID-19 has created new costs for owners of skilled nursing and residential care facilities, such as funding regular testing for residents or protective equipment for staff. As a result, residents of many of these Santa Cruz County properties will absorb some of the costs with an annual increase in rents.

For example, Ray Spencer will pay Brookdale Scotts Valley about 10% more for his two-bedroom apartment he shares with another resident starting January 1. That means he and his roommate will have to share an additional $ 700 per month. Spencer has learned that, on average, all residents are facing an 8.5% rent increase.

While Spencer can afford the higher rate because of his retirement savings, he worries about his fixed-income peers who will have nowhere to turn.

“COVID has definitely hurt their business, but it’s not cheap,” Spencer said of the Tennessee-based Brookdale Senior Living Solutions offerings. “My roommate and I pay (around) $ 7,000 a month… They increase the price every year. Last year it was around 5%. They think we have no alternative.

Data Sharing Santa Cruz County Estimates that more than 3,200 people aged 65 and over live below the poverty line in the region. This figure has only increased in the last decade.

The Texas native called an ombudsman who will visit the facility next week to speak to the principal, but said he was not sure the visit would create a significant change. After all, in his four years at Brookdale Scotts Valley, Spencer has dealt with four directors. Each, he said, offered corporate leadership excuses around a worsening experience.

“Nothing is ever done,” Spencer said. “It’s like four years ago except that now we don’t have tablecloths, not enough help to take care of people… The problem is the increase in rents when services fall.

Spencer said he understands that every institution has to downsize many industries due to COVID-19. After all, the restaurants he visited recently have fewer servers and the same number of customers to serve. What he doesn’t understand, he said, is that he feels older residents like him are not listened to or treated with respect.

“I was in one apartment and it was $ 4,500. Damn, I could buy a house for that price, ”Spencer said. “The food they provide you can probably buy for $ 1,000 a month. Where does the rest go? They really hold us by the short hair… My roommate tells me I’m too blunt, but that’s how I am. I want the world to know how they treat the elderly.

Brookdale Senior Living Inc. spokesperson Heather Hunter said this week that the concept of an annual rent increase comes as no surprise. This year, the rate of increase is higher, Hunter said, as the cost of labor and goods increased during the pandemic.

“As a business, we have absorbed millions of dollars in costs related to COVID until recently. We need to start passing some of that on in the form of an increase… We’re still taking most of it, ”said Hunter, discussing precautionary measures taken to protect residents such as the creation of COVID-19 wings. when the units were full. in local hospitals.

Spencer, a 90-year-old man, is legally blind but can see well enough to regularly check the company’s stock balance sheet.

“Their stock is in bad shape, it’s down. I find out that they are refinancing and trying to pay off a debt they borrowed, $ 100 million, this month, ”the resident said. “(The company) doesn’t make money on the services it provides. They make money with real estate.

Spencer’s allegations are verified by NASDAQ, which shows that Brookdale shares have fallen by $ 10 per share over the past five years with a continued decline through 2021. The company announced in a press release shared by Yahoo News that he got a loan of $ 100 million. Shares of Brookdale Senior Living Inc. closed at $ 5.08 per share on Wednesday, from $ 5.13 earlier today.

Hunter says the company is not in financial difficulty.

“In order not to be in a situation where negative things could happen to the business, part of the costs must be (shared),” she said. “We cannot continue to cover everything. “

No more rent increases

Brookdale Senior Living Solutions isn’t the only company that will need to communicate to residents that rent is going up.

Kevin Kimbrough, spokesperson for the Dominican Oaks skilled nursing facility, said the rates for the Santa Cruz home would increase slightly.

“Rent increases occur regularly (usually annually) in the living space of the elderly. Dominican Oaks, like other vendors, looks at a variety of operational expenses, the rate of inflation, the census, and more. At the end of the spring, when we analyzed the variables, we decided that our rate would increase by 2.5% this fiscal year (July 2021 – June 2022), ”he said in an email.

It is not just the houses owned by businesses that will seek to recover their costs. Tryg Thorensen, owner of De Un Amor in Corralitos, said he would increase his rent for new residents entering by at least 4% or 5%. This will translate to around $ 500 per month.

“Without a doubt, I have suffered a lot of losses this year,” he said. “But I have a small installation here and I charge a flat rate per month. There are no different levels of care… One thing I tell residents when they move in is that their price will stay the same… I’ve been in business for 27 years, periodically increasing (the rent).

Others will not experience any increases. That, according to spokesperson Dan Kramer, includes Santa Cruz Post Acute.

With the Omicron variant, Thorensen added, owners and managers of retirement homes will need to continually review their income and expenses in order to keep their doors open, staff supported and residents happy. He may need to exceed 5% if his accountant agrees that it is a good idea to give increases to staff, who regularly work overtime, to compensate for difficult circumstances and ongoing inflation issues.

“I’ve been in contact with a county nurse and it’s here, it’s spreading like wildfire,” Thorensen said of the latest strain of the virus. “The biggest issue that worries me is staffing. It’s a nationwide problem, but it’s so difficult to get people to work in this industry. It’s also about having the right people, not just anyone. He must be the kind of person who can do this job.

The Sentinel attempted to contact the county’s five remaining qualified nursing facilities recognized by its licensing body, the California Department of Public Health, but did not receive a response. The publication also contacted all 26 residential care facilities certified by the California Department of Social Services. He only heard from Brookdale Scotts Valley and De Un Amor.