Community Care Apartment: Does it make financial sense?

For the February 2021 BTO Launch , HDB released the first Community Care Apartments, Singapore’s first assisted living public housing development which integrates senior-friendly design features with care services and social programmes. This received a warm reception from seniors as the launch was oversubscribed within the first day of launch.

The Community Care Apartment is an interesting concept for seniors who wish to remain independent while still accessing care services when needed and being surrounded by their peers. However, seniors will have to pay the full price of the Community Care Apartment upfront and pay for the compulsory basic service package.

With these in mind, we examine the cost of the community care apartment and its associated service packages to determine whether it makes financial sense to commit to the Community Care Apartments.

The Community Care Apartment is one of the most affordable housing options but you have to pay the full price upfront

With an indicative price range of $52,000 – $60,000, depending on the lease, the community care apartment is easily one of the most affordable, if not the most affordable option, for seniors wanting to purchase a new property today. The other comparable alternative is the 2-room short lease flexi HDB flat .

In both cases, these are short lease options from HDB dedicated to seniors only. The community care apartment has more stringent age criteria of 65 years old and above, while the 2-room flexi flat can be bought by seniors aged 55 years old and above.

Due to the shortened lease and subsidised nature of the flats, you cannot do a lease buyback to unlock the value of the property. You also cannot pass on the property as an inheritance to your children or estate. Upon the passing of the buyer, the flat will be returned to HDB and any remaining lease is prorated and paid out to the owner’s estate.

* prices indicated for 2-room flexi flat for 15 to 35 years’ lease for Sembawang Sun Sails under the November 2020 BTO launch.

The compulsory basic service package cost about $140 monthly if paid upfront.

While the Basic Service Package sounds expensive in an upfront payment, it actually amortises to be around $130 to $140 a month if fully paid upfront.

It is also possible to make a partial payment ($13,000 to $42,000 depending on lease) for the service package and pay an estimated $50 monthly fee which may be subject to future fee increases. HDB promises that any fee increases will be capped at a maximum of 5per cent every 5 years.

For simplicity and cost efficiency, we will assume that you pay upfront for the basic service package in our analysis.

For $140 a month, the basic service package covers the following:

• Care and support services – there is no elaboration on what this entails but we can assume that someone will check in on you if you are absent from your normal routine.
• Simple home fixes – likely to be simple things like changing a burnt-out light bulb, hanging a picture frame, etc.
• Activities at the communal spaces – there will be an onsite community manager.
• Basic health checks – likely to be simple blood pressure monitoring which can be done by a non-healthcare professional.
• 24-hour emergency response
• Key card access to individual flats

In a way, the basic service package covers the things that we take for granted when living with family: Someone who is there to check in on you, help you fix minor things without calling in a handyman/ plumber/ electrician, remind you to take your medication and record your daily blood pressure readings, open the door when you forget your keys, etc.

There are no equivalent service providers on the market. A handyman would likely charge at least $50 for a trip down to fix whatever you need fixing but that would also depend on the complexity of the task.

How likely will you call down a handyman to adjust the height of your cabinet shelf which is something that most people can do easily but may be challenging for a senior? Most likely, you will just do without and just live with the inconvenience.

Optional services can be packaged together

Other optional services can also be added to the basic service package.

The indicative price estimates for HDB’s service providers are relatively reasonable and on par with market rates. For example, the rate for housekeeping is comparable to the market rate of hiring a part-time helper.

Laundry and meal services may be pricey compared to doing it on your own or buying food from the hawker centre or doing laundry at the laundromat, but the rates are on par with similar offerings on the market today.

What may be an advantage is that HDB’s service providers are likely to be already integrated into the existing subsidies framework, meaning that they are likely to be already approved and familiar with the government subsidies for elders and the means-testing process. This may mean a more seamless process for seniors who require government assistance.

How does Community Care Apartment compare to living alone or in a care facility

In terms of cost, the Community Care Apartment and the 2-room short lease flexi flat are very similar, once full furnishing under Optional Components Scheme is added in. Where they differ is in the service packages.

For seniors who are mostly independent but require some household help, one way to receive a similar level of care is to have a live-in maid or get external help. We compare the cost of hiring a maid and external service providers in a 2-room flexi flat with the community care apartment.

	2-Room Short Lease Flexi	2-Room Short Lease Flexi	Community Care Apartment
Cost of Apartment	$31,000 and $8,600 for OCS.	$31,000 and $8,600 for OCS.	$52,000
Monthly cost	Handyman: $50 Housekeeping: $80 ($20 x 4) Laundry: $80 ($20 x 4)	Live-in maid: $906	Basic Service Package: $130 Housekeeping: $80 ($20 x 4) Laundry: $80 ($20 x 4)
Total (rounded to nearest hundred)	$39,600 and $2,500 a year	$39,600 and $10,000 a year	$52,000 and $3,500 a year

The most cost-effective option is to outsource to an external handyman, housekeeping and laundry service while staying in a 2-room flexi flat. However, the reality is that most seniors may not do so for reasons such as perceived lack of value in these services or overestimating their ability to handle those tasks by themselves.

While a live-in maid would solve many of the care and housekeeping issues, a 2-room flexi flat would not accommodate much private space for another person living in close quarters. Instead, this may be a more viable solution for seniors who are living in a 3-room flat. The Community Care Apartment has the most expensive flat cost, but the monthly service fees are actually reasonable for what they provide. The question is whether seniors would value these services.

On the other end of the spectrum, staying in a full-care facility such as a nursing home can cost about $2,000 to $3,600 a month (before government subsidies) or $24,000 to $43,200 a year. With such high cost and the lack of availability at nursing homes, even the most expensive optional service – shared caregiving service with feeding service, looks to be a viable option for those who require full care to consider a community care apartment.

Community Care Apartment straddles between independent living and full care

There is a spectrum of care needs for the seniors, from those who are perfectly mobile and active, living their best years to those who require full care and nursing home support.

The Community Care Apartments fit in between these two points by catering to those who want to live independently and those who need full-time care. For senior singles or those who prefer to live independently, the Community Care Apartment can be a great compromise between independence, affordability and care.

This article was first published in Dollars and Sense.