Agenda - Council - 02/24/1998 - Laserfiche WebLink

Home

Ramsey Senior Housing Market Study January, 1998 SENIOR HOUSING MARKET REVIEW Introduction Market potential for senior housing, like any type of housing, is a function of supply and demand. The previous Section analyzed data related to demand for senior housing. Due to the lack of market rate existing senior projects within the study area, this Section reviews the existing supply of senior housing in communities in and adjacent to the study area. This information, combined with data from our demographic analysis, will be used to assess the potential for a project in Ramsey. Overview of Senior Housing in the Twin Cities Metropolitan Area The supply of senior housing has become highly diversified as developers, non-profit community organizations, health care providers and government agencies have attempted to provide housing with different levels of support services and rents to appeal to sub-markets within the senior population. Not long ago, there was no housing for independent seniors and the only alternatives for frail elderly needing support services were nursing homes and board and care homes. Today the product choice has widened to provide alternatives for young, healthy seniors not needing support services but who desire a living environment limited to mature adults as well as alternatives for older seniors needing various levels of support services. The first senior housing projects developed on a wide scale were subsidized through the federal government's Department of Housing and Urban Development (HUD). Substantial construction occurred during the 1970's and 1980's with subsidies from the federal government under the Section 8 program, ot~en used in conjunction with financing assistance or mortgage guarantees such as the 221 d3 or 236 programs. Section 8 projects have maximum rents of 30 percent of the tenant's adjusted gross income. Generally, these buildings do not offer any support services although in many communities a congregate dining site for the entire community has been established within the building. Today, few alternatives are available from the federal government for the financing of senior housing. The only direct assistance is through the Section 202 program which provides Iow interest loans to non-profit sponsors to provide housing for seniors and handicapped persons. Usually administered in conjunction with the Section 8 program, owners are required to set rents within established HUD guidelines. Beginning in the 1980's, the focus shit~ed to market rate senior housing development; housing that provided more amenities and services than were available at the subsidized buildings. Projects were developed by both private for profit developers, as well as non-profit organizations such as church groups. The first market rate senior housing projects developed in the metropolitan area were geared towards the frail elderly. Usually associated with nursing homes (as many new projects are today), these buildings were marketed to seniors who needed support services but who did not require the medical services or daily monitoring of a nursing home. Although still somewhat independent, these frail seniors required some sort of assistance such as housekeeping, daily check-in or transportation to stores and personal business or medical appointments. Activity programs, meals, health checks and other supportive services were usually included in the rent. Although high in cost, this type of housing was (and still is) considerably cheaper than nursing home care and far more fulfilling to seniors who still desire some independence. The oldest Twin Cities senior project opened in 1965 under the sponsorship of Heritage of Edina Nursing Home. Today this complex has a total of 214 units in three buildings. Sutton Place, affiliated with Community Partners Research, Inc. 23