Affordable Housing a Luxury for Some
Developers with an eye on shifting demographics are searching for nooks and crannies in Southern California cities in which to build housing for wealthy seniors who want to stay in familiar urban neighborhoods.
Rather than looking for large stretches of undeveloped land far from city centers, many builders are turning to so-called infill sites--small parcels of vacant land in otherwise fully developed communities, or existing properties that can be razed or renovated.
Experts say seniors, often empty-nesters, are opting for these new living quarters because they want to move out of homes that have become too large for them but they want to remain close to their old neighborhoods. Some have become uncomfortable living independently and want some help with activities of daily living like getting dressed or preparing meals. Today’s seniors also are more likely to have the money to afford rents that often exceed $2,000 per month, analysts say.
In Beverly Hills, Transamerica Senior Housing, a 14-year veteran of the senior housing business, is readying a new 64-unit assisted-living project on Clark Drive near Wilshire Boulevard, where monthly rents will start at $3,800.
Construction is nearly complete on the first two buildings of the seven-building, 456-unit Palm Island Senior Community apartment complex in Fountain Valley, where 262 of the apartments have already been rented.
Los Angeles-based PCS Development obtained City Council approval recently for a 336-unit project in Sherman Oaks that will include independent living, assisted living and nursing home care.
These are just some of the senior housing projects underway in Los Angeles and Orange counties. A Times report in May said that at least eight retirement communities with more than 1,400 apartments were either proposed, ready to start construction or opening within a few weeks in the San Fernando Valley alone.
The demand for senior housing is a result of the country’s aging population--the Census Bureau estimates the number of Californians 65 and older will grow to 6.4 million by 2025. There is a need for a variety of housing types, including senior apartments for independent living, facilities for assisted living (help with activities like dressing, cooking or housekeeping) and less grim nursing homes.
Many, if not most, of these units are aimed at the luxury market, with monthly rents of $2,000 and above, depending on whether residents choose independent living, assisted living or skilled nursing care.
The result is a senior housing picture in Southern California that closely resembles the overall housing situation, with most building targeted at the wealthy. Developers say high land and construction costs prohibit them from making a profit by building less-expensive housing.
“We’re falling short of providing all levels of senior housing, including alternatives for those who can’t afford some of the types of senior housing we’re building now,” said David Stolte, Irvine-based director of the Senior Housing Group for Charles Dunn Co., a real estate services firm.
Industry estimates already show a shortfall of 8,000 to 12,000 senior housing units, a problem that will worsen unless much more senior housing is built, Stolte said.
There have been suggestions by housing activists that federal funds from Medicaid (MediCal in California) might be used to subsidize senior housing for the poor, Stolte said, but the idea has gained little support from government.
“The fear among many governmental officials is that if a state like California were to allow Medicaid payments for [assisted living], everyone and his brother would take advantage of it and bankrupt the system,” Stolte said.
That means that providing senior housing probably will remain primarily a private-sector proposition for a long time. In any case, Stolte said, many more infill sites will be required to house the region’s seniors.
Such sites are preferable to building on remote, vacant land for a number of reasons.
“Infill sites are close to hospitals, shopping, bus lines and churches,” Stolte said. Candidates for infill development include former or outdated hotels, motels, hospitals, office buildings and schools.
Another advantage of infill sites is that they’re often close to the homes or apartments where seniors have been living, or where their families live, said Todd Shaw, managing director of PCS Development. PCS expects many if not most of the residents of its planned project to come from within a three- to five-mile radius.
At Transamerica’s project in Beverly Hills, scheduled to be completed late this month, half the 64 units are already reserved, said Sue Hefty, vice president of operations for San Rafael-based Transamerica Senior Living, a subsidiary of Transamerica Corp. The facility is being built on the site of a former apartment building that was razed to make way for the new construction.
Transamerica entered the senior housing market in 1986 and has 1,200 units at sites in Anaheim and Orange and in Northern California, in addition to the Beverly Hills project, Hefty said.
About 262 future tenants have already signed up at the 456-unit Palm Island Senior Community on Warner Avenue near Fountain Valley Regional Hospital in Fountain Valley, said Sheila King of Newport Beach-based Mesa Management, property manager for the facility.
Future tenants have signed up even without models to tour, an indication of strong demand for senior housing, said King and on-site property manager Lindy Stool. They said that two of the project’s seven buildings are slated for completion in October and the rest in December, and that they expect all buildings to be filled by the end of the year.
The PCS project in Sherman Oaks is at Riverside Drive near La Maida Street, a site currently occupied by a four-story, 50,000-square-foot former hospital building and a number of one-story structures built in the 1950s and 1960s, Shaw said.
The PCS development will be what Stolte of Charles Dunn describes as a just-emerging trend in the senior housing industry: continuing care retirement communities that can accommodate seniors at various levels of assistance--from independent living to skilled nursing.
PCS expects to renovate the four-story building and raze the others, he said. The company hopes to start the 12- to 18-month construction project within a year. It will be developed through an entity called Sherman Village Residence Project LLC in a joint venture with Encino-based Weiss Engineering & Development.
A $7.5-million assisted living and Alzheimer’s care facility called Grandview Palms will be built in Culver City’s redevelopment zone by Grandview Palms LLC. Construction on the project designed by JBZ Architecture & Planning of Newport Beach will begin in November and finish a year later.
