EXPERT OPINION: A Conversation with David Schless - Video

February 15, 2011

In this "Expert Opinion" interview, David Schless, President of the American Seniors Housing Association, discusses the influence the current political climate has on the seniors housing industry.

David Schless, ASHAWatch the video      Read the transcript

David Schless has served as President of ASHA since its creation in 1991. With over 20 years of experience in seniors housing, David has an extensive understanding of seniors housing policy and regulatory issues, and an intimate knowledge of the seniors housing business. He currently serves on the editorial board of the Seniors Housing & Care Journal and is a member of the Advisory Council of the Erickson School at the University of Maryland Baltimore County (UMBC). David has been honored as a Distinguished Alumnus by both the University of Connecticut and the University of North Texas for his work on behalf of seniors. He holds a Bachelor of Science degree from the Center for Aging and Human Development at the University of Connecticut, and a Master of Science degree from the Department of Applied Gerontology/Center for Studies in Aging at the University of North Texas. 
 

Contact Information:
Mr. David Schless, President
American Seniors Housing Association
5225 Wisconsin Avenue NW, Suite 502
Washington, DC 20015
(202) 885-5560 

 
Watch the video of the interview: 
 


 

Read the interview transcript:

Steve Monroe:
It’s pretty obvious that the political winds in Washington are going to be changing or change will be upon us possibly very soon. And there’s a lot that’s been going on the seniors housing industry dealing with some of the political aspects. So, to answer some of the questions for us, I’ve got David Schless, who’s the president of the American Seniors Housing Association.

And the political pot has certainly been stirred in D.C. these days. What is ASHA’s number one legislative priority today?

David Schless:
I think probably the top priority for us right now is the pending GSE reform of Fannie Mae and Freddie Mac. And that’s an issue that we think will come more into focus probably next year. A lot of different groups are providing commentary. I don’t think there’s a clear-cut path in terms of how the GSE reform will take place, but certainly for the seniors housing space, it has enormous implications, given the role the GSEs have played in the debt side of the business.

A natural partner for us has been to work with the apartment industry. As you know, we have a long relationship with the multi-family industry and so we’ve been really working very closely with them and obviously seniors housing being a relatively small subset of the multi-family piece of both Fannie Mae and Freddie Mac.

So that’s a big issue for us. That’s probably the top one.

Steve Monroe:
And the congressmen you talk to, do they understand the situation with seniors housing financing and the importance of Fannie/Freddie?

David Schless:
They really don’t. And a big part of the process for us now has been the educational initiatives. And interestingly, I think not just seniors housing, but multi-family more generally, the focus of the meltdown obviously being very much on the single family side, my sense is a lot of the members that we talk to are even surprised that there was this very significant role for multi-family and seniors. So that’s a big part of the process right now.

Steve Monroe:
Well, we definitely need you to work on that. And then earlier last year, we all realized that the so-called “card check” legislation was dead on arrival in Washington. But lately we’ve been hearing rumblings there’s a new guy at the National Labor Relations Board who is trying to kind of backdoor card check without going through congressional legislation. Is that something that could happen and what can the industry do about that?

David Schless:
Well, certainly there’s a concern I think amongst all types of businesses that, using the backdoor process, there will be an opportunity to pass sweeping changes. I don’t think we really anticipate that happening, but certainly there’s a lot of interest in how the Board deals with this issue. I think the reality is probably there will be things that will probably happen through the National Labor Relations Board process that will probably not be looked upon favorably by industry generally. But we really don’t anticipate anything as sweeping and damaging, frankly, as card check. Nor do we see, on the congressional side, the likelihood of that type of initiative having the opportunity to pass Congress.

Steve Monroe:
Well, so hopefully you’re not going to have to focus on that too much. And then, in the CCRC sector, there have been some well-publicized financial issues in the past 12 months or so, resulting in a GAO study, a Senate hearing. Do you think the conclusion is pretty much that this is the exception to the rule and it’s not going to result in any kind of new federal action on the CCRC side?

David Schless:
You know, I think the conclusion for the time being is that certainly the Aging Committee will continue to monitor the CCRC space. I think the conclusion of the Aging Committee hearing and, really, the GAO report in the summer—this was back in July—was that to date there have been very few problems that have directly impacted the refundability of promised entrance fees. But clearly I think there is the sentiment among those members of the Aging Committee that participated in the hearing--

Steve Monroe:
All two of them?

David Schless:
Yes, a very modest turnout. But I think the sentiment was that this was really a states’ issue. But I think the hearing that was held in July was really as benign as it possibly could have been.

Steve Monroe:
I don’t know what the numbers are, something like half of the states regulate CCRCs or a little more than half and some really have no regulation. Do you really see at this juncture with everything else that states have on their plates, do you really see them stepping up any kind of regulatory process for CCRCs?

David Schless:
Well, that’s a great question, Steve. My sense has always been that there are about 38 states that have CCRC-specific regulations and they tend to be states that have CCRCs. There are a couple of instances, Ohio probably being one of those examples where you clearly have CCRC stock. And you don’t really have CCRC-specific statutes and regulation. And, frankly, my conversations with our counterparts on the not-for-profit side—American Association of Homes and Services for the Aging—has really been to encourage those efforts in states like Ohio to really have the providers in that state, the CCRC providers take the initiative to find legislative champions in the Ohio legislature and really to work towards enacting state oversight of the product.

In other states, like North Dakota, to the extent you don’t see the specific state statutes, it is generally a reflection of the lack of product there.

But our position has always been that, in states where there are things that can be done to shore up adequate oversight, that the industry really should take the initiative. Obviously, as you point out, that the state budgets being what they are, that is always a concern. But certainly with the CCRC product, I think, in a state like Ohio and there are probably others, that would be our recommendation to the associations at the state level that represent that constituency.

Steve Monroe:
Just take care of it yourself.

David Schless:
Exactly.

Steve Monroe:
As we are starting another year, are your members, are they more upbeat than they were a year ago, would you say? Or is it about the same? What’s the general mood of your membership?

David Schless:
My sense is that probably slightly more upbeat. I think there’s certainly a concern about the capital markets and there is less capital out there for the industry, so I think that’s a concern that folks have. My sense is that the preponderance of our members have really focused on the operational type issues and efficiencies. I think it’s still a challenging market out there for most. I think the more need-driven side of the business has been easier.

But I think there’s still a lot of pressure out there on the operators. So I don’t think folks feel great about where things are, but relative to last year and certainly, as you recall, I’m sure that fall of 2008, where there was really almost a sense of shock at what was taking place—I mean, obviously, I think we’re far removed from that.

Steve Monroe:
Well, I think the industry will breathe a big sigh of relief if you can really push on the Fannie/Freddie issue and with the financing and making sure seniors housing is there, that’s going to be a big task, but obviously I think it’ll be one of the most welcome ones that we can see this year.

David Schless:
Yes, I think you’re absolutely right about that. The interesting thing obviously will be the politics and the political dynamics that have taken place after November’s election and certainly that will likely impact who shapes the debate.

Steve Monroe:
Absolutely. Well, good luck and I wish you continued success.

David Schless:
Always a pleasure, always nice to be with you, Steve. 
 

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