Tapping 'sleeping assets' can improve elderly care

Editor's note: The Ministry of Natural Resources, the Ministry of Civil Affairs and the National Health Commission recently issued a document containing measures to ensure land allocation for elderly care facilities. Chen Yueliang, president of the China Community Development Association, spoke to China City News about how tapping into "sleeping assets" in communities can make a difference to elderly care. Below are excerpts of the interview. The views don't necessarily represent those of China Daily.

The current shortage of community-based elderly care facilities reflects a deep-seated structural mismatch between the traditional model of resource allocation and the needs of a rapidly aging society.

As land is scarce in core urban areas, it is costly and time-consuming to allocate it for the special purpose of providing elderly care services. But a large number of idle commercial, office or factory buildings, small and fragmented land in neighborhoods, as well as vacant school buildings that are underutilized could be used for this purpose.

Converting these "sleeping assets" into elderly care institutions and day-care centers would not only save land, money and time, but also allow residents to access elderly care services within walking distance.

If the vast amounts of idle land and buildings in cities are turned into facilities for providing elderly care services, the efficiency and layout of communities will be improved. The transformation will also help grassroots governments better address the needs of the growing number of elderly residents.

With the rise of the silver economy, the elderly care service market is attracting investment from the private sector. Converting land and buildings that are lying idle into elderly care facilities will not only generate stable and long-term returns for the asset owners, but also stimulate consumption in healthcare, nursing and other sectors.

Repurposing idle land and buildings — which often go neglected — for elderly care would help improve the environment in communities. There are three main obstacles that need to overcome to utilize these "sleeping assets" for this purpose.

First, many idle spaces are scattered among multiple owners. Fragmented ownership and diverse interests results in extremely high coordination costs to repurpose them.

Second, the original design of such idle land and buildings, which were originally meant for commercial or official purpose, may not meet the accessibility, fire safety and other requirements for elderly care facilities, but revamping them fully according to the standards is economically and technically unfeasible. In the absence of clear government guidelines for "flexible approval", repurposing may fail to obtain government approval.

Third, revamping existing buildings doesn't involve land costs, but it may entail substantial initial investment in building structure reinforcement and age-friendly retrofitting. Universal elderly care services deliver modest profits with long payback periods. Such projects could face financial distress without support from a cost-sharing mechanism, professional operation and diversified businesses.

The root cause of many community-based facilities providing universal elderly care services having stagnant business lies in the failure to balance public welfare and the market.

Many such facilities rely excessively on government subsidies. Most of the services provided are basic, such as meals and day care. The facilities don't offer enough high-value-added services, including professional rehabilitation, dementia care and psychological support. Also, in the face of high labor costs, it's hard for these facilities, which charge modest fees, to attract and retain talents.

To address these challenges, the facilities need to stop relying too much on government support. A "dual-track" system covering both basic and value-added services should be established.

Basic services should be affordable and target the urgent needs of groups including the very aged and elderly adults with disabilities. The services should be jointly supported by government subsidies, communities and users, and their costs should be strictly controlled via standardized procurement.

Value-added services, personalized services targeting younger seniors who are in better health, should be priced by the market. These services include rehabilitation training, health management and universities for seniors, revenue generated from these services can help sustain the basic services.