China’s senior living market is in flux. Many different groups are interested: architects, developers, and operators, among others, because of looming demographics and unmet need. The Chinese government estimates that the number of people over the age of 60 will increase from a current 14 percent of the population to approximately 30 percent, or 437 million, by 2050. While there’s seemingly great potential, there are still plenty of unknowns surrounding what type of long-term living model will work in China, and what the market will look like in the long term. A few projects have opened recently, and countless others are in the planning and design stages. While the developments move forward, the market is lagging due to uninformed consumers and operational models and programs that haven’t yet been tailored to the Chinese market.
International operators and developers see the potential and are heading to China, arriving from Japan, Taiwan, Australia, Europe, Canada, and the U.S. They all have in common a steadfast belief that success seen with the senior living models in their home countries will be recognized by the Chinese, with some thinking that mirroring those models in China will equal success. However, there’s much more to learn before solving this particular senior living challenge.
Speed bumps
Despite bolstering activity over the past 5-10 years, there are few success stories of sustainable and profitable senior living models in China. Currently, the market consists predominantly of two models at opposing ends of the continuum of care—private-pay active adult care and government-backed nursing. Developers are attempting to fill in the gaps by building American-style continuing care retirement communities (CCRCs) or smaller standalone assisted-living and memory care projects.
The problems of existing CCRC-style projects are well documented. One CCRC in Shanghai is occupied but outsources all services, meaning it’s entirely reliant on outside vendors—a model that’s not yet been profitable. Other CCRCs face occupancy rates below 5 percent, while smaller projects that focus on assisted living, nursing care, or memory care are also struggling, but for different reasons. Unlike the CCRC segment of the market, there’s competition with existing Chinese nursing homes that may charge $450-$750 per month for care. These facilities are prevalent throughout China and frequently use a ward layout with as many as 6-8 residents to a room with a shared bathroom for every two rooms. Economies are maintained by volume, and the larger number of seniors served is supported by the government in its provision of basic services, but cost is still covered by the resident.
The first generation of Western-inspired, service-driven assisted-living products are either private or semi-private but can be three to five times more expensive. Occupancy at these projects, for the most part, is well below 50 percent.
Another barrier is that the Chinese don’t yet trust the senior living market nor have an understanding of why they would want to pay for its services. There also isn’t a definition of the broader term “senior care,” which is instead used to refer to skilled nursing rather than the full continuum of care or models that are for more independent residents, like independent living or assisted living.
Land acquisition in China is also very unique. The government owns the land and uses the sale of land to generate revenues for local government. An auction process is usually employed, but because care for seniors is a piece of a national five-year plan, there are special dispensations that allow land to be sold less expensively. Because of this, many Chinese real estate companies, operator companies, and other affiliates are pushing to prove their intent is to build senior housing communities in order to purchase large parcels at a reduced price. Due to the boom, most of the available parcels are now fairly distant from city centers, making it even more difficult to attract potential residents.
Overall, though, what is likely China’s greatest challenge is the long-term financial viability of the senior living market. Because it’s growing so rapidly, developers aren’t yet sure what the future holds. Because there are no safety nets such as Medicare in the U.S., the Chinese market will be one of private payment, and the question remains on whether those who can afford care will be willing to pay for it. Developers in China are banking on the “new rich” as those who will consume the product, but even they will face challenges.
Historically, adult children take care of their parents and grandparents, but this is less and less common because of financial and geographical constraints. Because of China’s one child policy, what’s referred to as the “2-4-8 problem” is starting to happen and will continue to be a problem for the foreseeable future: two adult children have four parents and eight grandparents to care for. Additionally, migration of adult children from rural areas into urban centers often leaves elderly parents and grandparents without care.
Design drivers
Designing environments for the Chinese that are culturally appropriate can be a challenge for international design firms that bring their own experiences and expertise. Understanding the needs not only of the Chinese in general but of each area’s people is important. For example, the Tianjin culture is quite different from the Shanghai culture. Potential residents in Shanghai are likely to be more accepting of smaller units, open kitchens, and Western design style than people in Tianjin. The Friendship House in Tianjin was originally designed using a transitional style between Western and Eastern aesthetics. Upon the building’s opening in December 2013, the client and potential residents desired to “Tianjin it up,” requesting the addition of artwork unique to the building’s context.
Managing expectations for deliverables and project speed is challenging, as well. Because developers are trying to beat others to the market, the design process is often condensed, meaning the design intent can be put at risk. Culturally, the design process is also very inclusive—everyone has a say. In the case of the design of Friendship House, professors from Peking University were brought in to review the design. These experts were knowledgeable about high-acuity nursing care but less knowledgeable about residential, person-centered memory care.
Overall, the senior care industry in China is still accustomed to and accepting of institutional models of care, so it can be challenging for designers to advocate residential and person-centered models of care that we’re accustomed to in the U.S.
For example, restraints are still widely used and accepted in nursing homes at night, to reduce falls. Or in the case of Friendship House, the Peking University experts advocated for the use of stretcher bathers in the community, something commonly used in nursing homes in China; however, the design team advocated strongly against their use and instead pushed for showers at every resident room.
While the design process brings the most challenges, achieving a design product that’s culturally appropriate can also be difficult without being fully embedded in the Chinese culture. These nuances include a strong desire—often a requirement—for south-facing units. Many Chinese grew up without heat, so sun-exposed units remain valued for their heat gain potential. There are also different attitudes about food and cooking.
For example, open kitchens aren’t desired focal points because cooking smells are strong; instead, kitchens are usually closed off. There’s also a very different attitude toward interior design, with a highly articulated environment appreciated most. White walls are strongly disliked, and walls with multiple treatments and rich color are preferred.
Although there are nuances in the design product, major elements that are applicable to all cultures remain, like access to nature and natural light, intuitive wayfinding and orientation strategies, and supportive features.
From West to East
The future in China may lie in the development of a model that doesn’t fit neatly in one that already exists in the U.S., where distinct lines run between independent living, assisted living, and skilled nursing. Instead, the solution for China may be a residential setting of choice that provides some services with an à la carte system for additional services, as needed. While the Chinese government is encouraging development of skilled nursing and rehabilitation facilities to serve the highest number of frail people, keeping people out of what will likely be institutional settings will fall to other types of care.
Although developers and operators remain unsure of what the market will look like in 10 years, the role of architects and designers is bright. They stand to help educate clients about the importance of specialized design features for the elderly and how design can help market a new industry to a public that knows little of senior living’s benefits. To help envision the future of the market, architects and designers must understand current challenges and the unique aspects of doing work in a foreign country. It’s a rare and exciting opportunity to help create a new market.
Alexis Denton, AIA, is an architect and gerontologist at SmithGroupJJ (San Francisco). She can be reached at [email protected]. Jim Biggs is the managing director of Honghui Senior Living (Shanghai). He can be reached at [email protected]. Dennis Cope, AIA, is a design consultant and architect with extensive experience designing senior living communities in the U.S., Japan, and China. He can be reached at [email protected].
