Agenda - Council - 08/27/2019 - Laserfiche WebLink

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Ms. Chloe McGuire Brigl City of Ramsey August 15, 2019 Page 3 Senior Housing • Similar to general -occupancy apartment housing, senior housing in the Twin Cities has also had a banner year for new deliveries. In 2018 over 2,300 new senior housing units were completed breaking the previous record of just over 2,000 units in 2017. Historically, the Twin Cities has averaged about 1,400 new senior units annually since the year 2000. The Twin Cites is now a top ten market in the U.S. for new senior housing construction. • New senior product has recently shifted and targeted active adult and independent product types that have comprised nearly 75% of all new units developed this past year. In addition, affordable senior housing accounted for 41% of all new production as local developer Do- minium has been actively developing the Legends housing projects throughout the Twin Cit- ies. Finally, for -profit developers have been the most active and now comprise about 85% of all new units in the pipeline. Previously, non -for -profit developers had a significantly higher market share. • Although rising home prices should be a sign for older adults and seniors to "right size," many seniors are not selling their homes. Over the past few years the 65+ demographic has had lower turnover rates than previous generations. Many seniors are not selling due to a lack of maintenance -free product and rising housing costs. Because older adults 55+ own most of real estate in the U.S., the housing market has been held back and has contributed to the housing shortage. At the same time, demand is strong for active maintenance -free living products as senior cooperatives, twinhomes, detached townhomes, ramblers, and condominiums. Because there is a lack of new product; many seniors have also sought -out traditional general -occupancy apartments as the next step. • The long-term demand for senior housing is exceptionally strong due to future growth in the senior population over the next few decades (+110% senor growth by 2030). Demand will continue to be strongest for active -adult and independent living products in the short- term as assisted living and memory care are experiencing vacancy rates above equilibrium. Maxfield Research finds active adult and independent living vacancies averaging 2.4%, com- pared to 8.5% for assisted living and memory care housing. For the remainder of 2019, we expect modest rent growth and a competitive leasing environment for service -intensive senior housing. MAXFIELD RESEARCH AND CONSULTING, LLC