Press Releases

FOR IMMEDIATE RELEASE
December 13, 2002

SENIORS ARE SENIORS ARE SENIORS: DEMOLISHING THE AFFORDABLE MYTH

By Jeff Hettleman, Partner, The Shelter Group
As printed in Multifamily Executive (December, 2002)

The belief that prospects for affordable senior housing are somehow "different" from market rate seniors is just a myth-and a potentially dangerous one for a developer! What differentiates affordable senior housing from other types of senior housing isn't the population it serves but the sophistication of its financing. The market research we've done in connection with our development and management of both our market rate and tax credit senior communities has shown us time and time again that seniors are seniors are seniors. Except for annual income, the psychographic and demographic profiles of residents, the ways in which their families are involved in the decision-making process, and their age-related support needs are almost identical whether you're talking about our market-rate or our affordable properties. What are the implications of this for developers?

First, don't lose sight of the senior part of the equation: give as much focus to understanding your prospective residents and what they need as you do to working out the details of your pro forma. In fact, as every experienced developer knows, the two are interdependent. Meeting the special needs of seniors has a direct impact on the project's pro forma-and that's true whether the project is affordable or market rate.

The affordable product, just like its market rate cousin, has to recognize and make provisions for meeting the needs of the senior population. How those needs are defined and met has a direct impact on the site plan, the physical layout of the building including the amount and types of common space, and the amenities provided in each unit.

Studies of seniors show that their greatest concern is remaining as independent as possible. Housing aimed at the senior market has to support this desire to maximize personal independence. How does housing promote independence? By equipping kitchens with sink sprayers and dishwashers to make washing dishes and pans easier. By providing transportation to shopping and doctors' appointments. By incorporating common areas for recreation, crafting, socializing, and learning. By making available Internet access and computer training classes to help seniors keep in touch with family, friends, and the world at large.

After thinking about how to best provide needed support to seniors in our affordable sites, we hired a corporate Resident Services Director. He and his staff help our affordable senior communities tap into the existing network of social services and self-help agencies, community colleges, aging network resources, and other community based programs. This approach provides the benefits of needed programming without the expense of having to hire on-site program directors. We've also found it helpful to partner with local congregations who often "adopt" one of our affordable retirement communities. Congregation members bring activities, Bible study, and other programs to our residents as well as inviting them to weekly worship. In fact, one of the trends we've seen lately is an increase in various forms of partnership between congregations with excess land and developers with experience in senior affordable housing.

Second, be super efficient in your design and construction without falling into the trap of confusing affordable with sub-standard. For example, through-wall units give residents full control over their environment but are less costly than central HVAC systems to purchase, install, and operate.

We also learn a lot by doing a post-opening walk-through and talking with residents and staff about what's working, what isn't. One example: Our specs called for laying ceramic tile around our elevator foyers. Our walk-through process helped us discover that the tiles were presenting a maintenance issue, cracking from residents' using carts and hand trucks during move-in. Eliminating the tiles didn't dramatically impact the aesthetics of the building but did lower both build-out and maintenance costs.

It's this kind of efficiency and willingness to stay attentive to our customers that allows us build affordable projects with high curb appeal. And that's important not only in marketing to potential residents but also in getting the neighbors behind the project. News that there's an "affordable" project on the drawing boards can provoke a negative reaction in the surrounding community, often because the public tends to confuse affordable with subsidized. Just as often, community opposition converts into community support when we show the community the site plan, architect's rendering, and samples of some of the finishes.

Being forced to be super efficient in design and construction helps our market-rate properties, too. Many of the techniques we've developed on the affordable side of the business are useful in creating market-rate senior projects that lease up ahead of pro forma.

In affordable senior housing, as in any multi-family development, staying focused on the market is the best guarantee of success. Seniors are seniors are seniors-whether they're living in affordable or market rate housing.

About The Shelter Group:

For 25 years, The Shelter Group, headquartered in Baltimore, MD, has provided development, acquisition, and property management services for its own projects and for third parties. Shelter's current portfolio of 21,000 units includes conventional multi-family real estate and senior housing, affordable housing for families and the elderly, and seniors assisted living communities. Author Jeff Hettleman is a partner in The Shelter Group and Executive Vice President and Chief Development Officer of Shelter Development, LLC.

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