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Retirement: The good, the bad and the ugly

Lack of affordable housing for elderly South Africans a major problem urgently in need of government help.

The dearth of affordable retirement accommodation is putting many elderly people under pressure to find somewhere to live out their golden years.

Even many of those who have worked for decades are struggling to find the peace retirement is supposed to offer. While the problem is country-wide, in Cape Town there is an “acute shortage” of affordable housing for retired people, says Gavin Weir, deputy director of Noah (Neighbourhood Old Age Homes). 

Many organisations that provide accommodation for middle-income individuals have waiting lists of elderly people looking for a place to call home. The biggest reason for this retirement accommodation shortage, he says, falls under the wider shortage of public housing in the country.

“Not enough affordable accommodation is being built to keep up with the demand for affordable accommodation for those with limited incomes. If a person put their name down on the City of Cape Town’s list for housing provided by the city, it is estimated it would be 60 years before they would be offered accommodation.”

On the other hand, wealthy retirees can buy their accommodation of choice “without too much difficulty” and, although limited, middle-class retirees do have the option of applying to organisations that focus on providing accommodation to this sector. For social pensioners, however, the situation is “particularly difficult”.

“These are individuals whose source of income is R1790 a month, or R59.66 a day to meet their essential requirements such as rent, food, and clothing. Their housing options are very limited. If they are fortunate enough to secure accommodation from NGOs such as Noah, they are able to live on R59.66 a day because of the modest rent they are charged.

“For those not able to get such housing, they generally live in difficult circumstances, either with their families or in shelters or on the street,” says Weir. The situation is even more complicated for those whose families live overseas as they are “essentially on their own”.

“If they are fortunate, their relatives send them funding to boost their incomes and give them more accommodation options.” The need for national and provincial government to give priority to the housing needs of retirees on limited income is serious. Weir believes it can be done by providing government funding to NGOs to encourage them to add to their existing housing stock.

“As far as the private sector is concerned, the government could consider tax incentives to developers who commit to providing affordable accommodation for retired persons.”

From a private developer perspective, the argument is similar to that of the affordable and social housing issue, where the crux lies in practical development policy and value models, says Deon van Zyl, chairman of the Western Cape Property Development Forum. “Developers are change agents. They create products and the technicalities of these products and the release of stock is not difficult. It is bricks and mortar.

“It is the business model that needs work. Developers are paid in the sales value or rental returns of their products. More developers are now experimenting with the Life Rights model in which the elderly pay to live in their homes and, once they pass away, the developer buys back the rights to the property. This tends to create a more affordable product for the purchaser.”

Van Zyl says developers buy back these homes at a pre-determined value that tends to be lower than market value, fix them up, and then resell them on the same Life Rights basis. The lower initial sales value and the ongoing business for the developer creates benefit for both purchaser and developer.

He says government subsidies for the elderly can assist them to buy retirement properties, or grant top-ups can help them to pay rent. Mostly, however, government can make developing such accommodation easier by reducing the risk involved for developers through more efficient and even fast-tracked approval processes.

Van Zyl believes the issue of retirement accommodation is a critical one that needs to be debated by all possible role players. “As more people grow old and life expectations extend due to health improvements, housing for the elderly will have to become front of mind for the government and society alike.”

The Department of Human Settlements agreed to provide comment on the issue, but had not done so by the time of going to press.

What happens when the family cannot offer help.

Kelsey Jacobs* and her father had never had a good relationship, and during her adult years they would see each other only in passing.

They would exchange pleasantries and even sometimes chat briefly, but that was the extent of their interaction. Until, years later, with a family of her own, she found out he had gone from owning her early childhood home to basically being homeless.

“A few years after he and my mom divorced he resigned from work and used his pension savings to open his own business. But through some unwise decisions and a business partner who absconded with a lot of his money, he had nothing. He found temporary jobs but after suffering two strokes and other health ailments, he was unable to continue working as he had lost mobility and was unable to speak clearly.”

Jacobs says at the time he was living in a shared, rented property and his disability grant was being used to cover his rent and food.

“I was renting a home with my family, so we decided to look for another property where there was an outbuilding that could house him. It is not a great place to live as we are also struggling financially, but it is a roof over his head. We do not charge him rent and he uses his grant (which is now a pension) to pay for his food and monthly needs.”

After six years of this, Jacobs feels he now needs to move into retirement accommodation where he can mingle with other elderly people and have social and mental stimulation.

But the options are almost non-existent as his only income is his state pension, and all the accommodation available has years-long waiting lists. His own parents are dead and his siblings have no contact with him.

“We feel he needs to have a better home but cannot offer him anything more than what he has already, and it really is not great. If he can secure a place in a nice retirement village or complex with his pension, then we can help with monthly toiletries and occasional treats, but that’s unfortunately where our capabilities end. However, there is no space at any of the places we’ve tried.”

There are private options available, but the family cannot afford them. “For now we are stuck and feel sad for him. He is lonely and needs to live and interact with friends his age.

“We do understand that had he continued working for the same company until retirement or made a success of his business ventures then his situation would be very different and he would possibly still be living in his own home or able to afford a modern retirement village, but life did not work that way for him,” Jacobs says.

“Even if it had, his situation is still the reality of millions of other elderly South Africans who, through no fault of their own, have to survive on just a government pension and almost no option for decent housing.” 

*Name changed 


Community and healthcare are important for today’s retirees.

 

Having a home in which to live out one’s retirement years is a concern for people of all ages, and those who can afford it are focusing on more than bricks and mortar.

Community has become an important pillar of retirement living, and today’s retirees want to feel they belong, says Garry Reed, managing director of Evergreen Lifestyle Villages.

Modern retirement villages have lifestyle centres that provide residents with game nights, social events, special interest groups and clubs, and outings. Having the right staff is also “critical”.

While the group’s retirement villages are set “in some of the most beautiful parts of South Africa”, the focus is also on creating spaces that “inspire the soul”. 

Reed believes these spaces must be approached from developing a partnership for life with residents. At Evergreen this is built on the pillars of physical security, financial peace of mind, continuous care and a sense of community.

He says: “Retirement living must be done in a personal way, offering a superb lifestyle and sense of community. Properties that do this will offer investors a significant platform for future growth.”

Jean Ehlers, director of the Devmark Property Group’s residential development division, says people are now retiring in good health and want to continue living a productive and active lifestyle.

“The property market offers retirement options covering all income brackets and types of accommodation. Many factors influence one’s desired retirement lifestyle, including when, where and what.”

The “when” will depend on an employer’s policy and pension fund benefits and the retired person’s capital base, which needs to be sufficient to see them through many years without direct income. “It may also depend on health issues and the costs of medical care, as well as when you’re ready to retire.”

The “where”, Ehlers says, is the consideration of living close to family and friends, interests and hobbies, amenities such as shops and restaurants, and recreational aspects such as parks. Healthcare facilities and the associated costs are relevant. The “what” relates to the type of accommodation and whether retirees buy their properties or choose the Life Rights option. 

SA has 4.6m oldies: Most are women.

The South African government’s most recent statistics show the country is home to about 4.6million people aged 60 and older, and most (59.8%) are women.

Using 2017 statistics, Statistics South Africa’s most recent Vulnerable Groups Indicator Report, released in March this year, reveals the largest proportion (32.2%) are living in “triple generation” households in which residents’ ages range from infancy to extreme old age.

A total of 20.2% of the elderly live in “double generation” homes. While 89% (4million) of the country’s elderly live in formal housing, 7.8% (358000) live in traditional housing and 2.9% (133000) in informal homes.

More than 73% have access to piped water and 78.3% have access to electricity. 

·         68.6% are beneficiaries of social grants

·         42.2% are still working

·         50.7% are living in homes without an employed adult.

Prioritise safety: Make some changes.

When elderly parents or relatives move in with their family, their safety has to be a priority, which could entail making changes in the house. As suitable retirement villages are expensive, in-home care can be a better option for many, but they need to be prepared, says Desiree Pather of Handy Helpers Home Care Solutions.

·         Some adjustments to make homes safer include:

·         Good lighting indoors and outdoors.

·         Taping down the ends of small rugs.

·         Creating obstacle-free paths, such as from the bedroom to the bathroom.

·         Fixing any loose paving.

·         Painting anti-slip coatings on kitchen and bathroom floors.

·         Using travel mugs for hot drinks as well as non-slip placemats. 

·         Minimising risk of falls in bathrooms by installing grab bars, getting non-slip mats, making toilet seats higher s0 is easier to get up, and installing shower seats.

Savings are vital: Plan for your future.

South Africans are being encouraged to cultivate a culture of saving money to secure their futures. With July marked as “Savings Month”, the Western Cape Office of the Consumer Protector together with other consumer protection agencies is rolling out educational workshops in communities, schools and businesses with the sole objective of encouraging savings.

According to the Old Mutual Savings and Investment Monitor, only 15% of combined household income goes toward savings, a decline of 6% in the past six years.

“This demonstrates that not enough citizens are planning effectively for retirement, or for unexpected events.” The office says South Africans should start saving consistently for their retirement from the day they receive their first salary.

 

 By BONNY FOURIE

Property360

 
 

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