The senior housing scene

The senior housing scene

Fennell, John

As SENIORS HOUSING GOES THROUGH A PERIOD OF METAMORphosis, it will become incumbent on developers and builders to correctly identify this savvy and demanding market. While condos – whether owned or rented – will always be an option for seniors, a wider range of choice will be required in future to house Canada’s aging population. There will be less focus on building institutions to house seniors – shifting instead to new congregate care facilities and the rapidly rising life-lease developments where a sense of community can be maintained.

This is profoundly evident in British Columbia, particularly Vancouver, where the number of people over 64 years of age will increase by 120 per cent by the year 2020. And by far the greatest percentage increase will arise in the seniors over 90 years of age. This group is expected to grow by a staggering 152 per cent over the next two decades.

According to a CMHC report, the pattern of demand is changing too. By the year 2021, four out of five new homes will be purchased by seniors – thereby making this sector the most significant force in Canadian housing.

Less focus will be given to building institutions for seniors; rather, there will be increased reliance on the private sector to provide seniors housing. The result will be more competition and a wider range of choice. In targeting the adult lifestyle buyer, builders and developers are looking toward smaller, more efficient designs.

The suburbs of Vancouver have seen a significant downsizing shift to bungalows, where neighborhood developments are designed to encourage social interaction and a sense of community. The aging boomers in GVA want homes between 1,700 sq.ft. and 2,000 sq.ft., with the primary living area an open concept main floor plan. Successful projects feature space for guests or grandchildren, entertainment centres and home offices.

The same pattern is showing in the Okanagan Valley, centred by Kelowna, B.C. By the year 2020, the number of people aged 65 and older will have increased 71 per cent. The leading edge of the Boomer population will balloon the 55- to 65-year-old population to a 124 per cent increase within the next two decades.

The CMHC report suggests many seniors over 75 years of age will want some level of assistance in their daily lives, including housecleaning, laundry services or meal services. “A keen developer will be cognizant of home care services in the community and, at the very least, will introduce their clients to the local services network. In addition, flexible space design could go a long way in helping boomers stay independent, as well as creating a competitive advantage. Those who choose to live in the new congregate-style projects, where meals and housekeeping are provided, will not be prepared to give up the variety of amenities they now demand.”

Current figures indicated that, in most communities in B.C., less than 2.5 per cent live in congregate-style projects. However, as the seniors population increases, governments are hoping to shift the focus from institutional care toward home living options. To this end, major funding for congregate-style living projects is now being contemplated so that home support and medication dispensing can occur on site. There’s also a shift to life-lease projects, which are `community’ oriented.

Barbican Properties Inc., of Vancouver, had several inquiries about whether the company would build a seniors development on a vacant site it had in Langley, B.C. John Brown, president, says the company decided to go with a congregate-style facility as opposed to life-lease development because it is an easier marketing situation.

“While total costs work out the same for both types of projects, we felt there were two major advantages to congregate rentals,” says Brown. “First, we feel renters are able to have more investment leverage from the sale of their previous homes and, second, it’s easier for renters to move away from a unit if they don’t like the situation.”

He says 65 units of the planned 115-unit, four-storey building, which will have underground parking, are already leased and construction will start in June of this year. Size of the rentals ranges from 475 to 770 sq.ft.; while rents range from $1,675 to $2,475 per month. Another 40-unit building, complete with licensed health care, will be built on the same site so that there will be continuum care.

In Alberta, the population is less mature than B.C., Ontario or the Maritimes, yet the same demographics hold true. One of the first to move into the adult living lifestyle markets in the province was Christenson Developments Ltd. of Edmonton.

“We’re doing three life-lease projects in conjunction with the Lions Club,” says Carol Moran, marketing officer with Christenson Developments, “and we’ve found no objection from buyers as to not owning the land. We try to build in established communities where there is easy access to facilities.”

Sale of life-lease units provides a guaranteed 95 per cent of market value payback to the owner, or heirs, and the Lions Club provides property maintenance for the developments. Size of the townhome style of life-lease units, which have walk-out basements, ranges from 804 sq.ft. to 1,149 sq.ft., with the cost up to $155,000.

The company also offers a number of adult living condominiums, most of which run in the 1,200 sq.ft. range and cost about the same as the life-lease homes.

In Ontario, as in B.C., seniors are opting to stay in their homes longer than the previous norm. This is reflected, according to a CMHC study, by higher vacancy rates in retirement homes across the province – particularly in the 75- and 80-year-old age brackets.

The report for the year 2000 also notes that the population aged 75+ in the Greater Toronto Area is expected to rise 21.7 per cent within the next five years. During the same period, the group in the 80+ bracket are expected to grow 32.8 per cent.

Although nine new private retirement homes have been added in the Golden Horseshoe area – ranging from Durham region through GTA to Niagara region – the projected demand has slackened because of personal decisions and the supply of other living alternatives. Reverse mortgages and more funding for home care were not options 10 years ago and, in addition, there is a wider range of other housing options geared specifically toward the aging population. These include: adult lifestyle condos, some of which are now offering hotel-like services; activity-related adult community developments; life-lease townhome and apartment projects; rental apartments; and long-term care facilities.

While condos and the activity-related community developments (primarily golf) have been on the scene for some time, and are becoming more attuned to the needs of the buyers, the advent and acceptance of life-lease projects is on the rise – particularly for those who want to downsize within their existing community structure.

Life Lease Associates of Canada, which provides consulting to municipalities, service clubs, church groups and many other community organizations in the development of alternative housing models for senior constituents, now has 50 projects either developed or underway in communities from Windsor to Ottawa and north to Sault Ste. Marie. These projects represent 4,000 dwellings, with buyers coming from the 70- to 75-year-old age bracket.

“We’re currently working with the Rotary Club in Oakville, with the IOOF in Barrie, with the Czech Club in Scarborough, with the Victorian Order of Nurses in Stratford and with the Christian Reform Church in Grimsby to put garden homes or apartments on land that these organizations own within the community,” says Gary Zock, president of Life Lease Associates. “The fact that these organizations already own the land helps offset costs to the buyer.”

Sizes vary, depending on the project, but the new Woodside Mews development in Oakville has several models ranging from 1,000 to 1,400 sq.ft. with prices between $175,000 to $239,000. Monthly occupancy fees are expected to be between $181 to $240 per month. Property taxes are extra and are expected to average $2.50 per sq.ft. per year. A 2,500 sq.ft. clubhouse will be erected on site with a support care office, lounges and meeting rooms, a pool table facility, bathroom and kitchen facilities.

Zock says the new life-lease form of housing seniors has now been legislated – much the same as the Condo Act – in Manitoba, and suggests both B.C. and Ontario are now looking at legislation. “It’s a growing form of housing seniors, and demands some form of regulation to make it a safe investment for buyers,” he says. “About a quarter of our population will be 55 or older by the year 2021, and we need to have as many secure housing options in place as possible.”

In the Atlantic provinces, the seniors market is quite mature. And, according to John Greenough, president of Provident Developments Inc. in Halifax, the situation is compounded by the return of many Maritimers who left to work in Ontario in the 1950s and early 1960s.

“We’re seeing ‘younger’ 70-year-olds who want more exciting units,” says Greenough. “Today’s seniors buyers are much more upscale than 10 years ago. They want all the bells and whistles and are quite prepared to pay for it.”

He says condo-mania is coming to Halifax as the city is now experiencing a shortage of land – pushing developments further from the downtown core. Provident is currently developing the Harbour Lights project along the Bedford Basin, including the five-storey Waterfront Terrace and the nine-storey Convoy Quay Gardens projects. The 1,000 to 3,000 sq.ft. units range in price from $250,000 to $350,000.

“We tend to be in the high end,” admits Greenough, “but we have a data bank that we’ve built up over eight years and have third- and fourth-time buyers coming back. Our competitors in the seniors market are providing good condo units in the $150,000 to $200,000 range.”

Perhaps the most telling fact about the seniors market, according to a CMHC survey, is the fact that “older Canadians are a mature market – not in age – but in the fact that they currently own a home and will not move unless circumstances or the right alternative comes on market to meet their needs.”

The 55+ market controls more than $500 billion worth of family homes, and the majority have little or no mortgage. This, then, presents both an opportunity and a challenge for builders and developers across the country.

Copyright Crailer Communications Mar/Apr 2001

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