Despite recession, demand for senior assisted-living housing is still strong
Demand for assisted living in the Seattle area is not likely to wane, and the shakeout in that segment of the real-estate market will be less volatile than the overall market, experts predict.
Special to The Seattle Times
Elder care by the numbers• There are more than 3,400 elder-care facilities in Washington state, and the 65-and-over population is projected to double over the next three decades.
• The average age of assisted-living residents is 85.3 years, and the average age at which they move into some type of senior housing or assisted living is 83 years.
• Three-fourths of these are female.
• The median income of those living in senior housing is $15,686, although the median assets of each is $250,000 because this often includes real estate.
• Seniors 75 and older have a great deal of equity in their homes largely because most have lived in those homes for 24 years on average, with 75 percent owning their homes free and clear.
Sources: The National Council On Aging, National Center for Assisted Living, American Seniors Housing Association.
Bert Lowenstein and her husband, Werner, had lived in a two-bedroom condo in Seattle for nearly three decades when they signed up to move into an assisted-living facility when the time was right.
Unfortunately, Werner Lowenstein died after 56 years of marriage. Bert Lowenstein moved into Aegis of Shoreline on nearly the anniversary of his death at age 89.
"I was ready emotionally to move to a new home, a place where I would be around others and have activities to take part in," says Lowenstein. "The location is close to my daughters and family, which is very important."
Before moving, Lowenstein had to decide what to do with the two-bedroom condo she had lived in with her husband for 29 years. Instead of trying to sell it in a slumping real-estate market, Lowenstein's daughter moved in. "It is a poor time to sell at the moment, so this situation works out well for both of us." While sales of single-family homes and condos have been hit hard by the recession, one segment of the market remains strong and is expected to grow: senior housing.
There are more than 3,400 elder-care facilities in Washington state, ranging from upscale complexes with all the amenities of a luxury hotel for active, well-to-do residents to facilities providing around-the-clock care for Alzheimer's patients.
The 65-and-over population is projected to double over the next three decades, according to the National Council on Aging. The national average age at which someone moves into some type of senior housing is 83 years.
Many seniors are financially healthy.
A year ago, the American Seniors Housing Association found that seniors 75 and older have a great deal of equity in their homes, largely because most have lived in them 24 years on average; 75 percent of seniors owned their homes outright.
However, just as with any other homeowner, the decision to sell is predicated on both the market and need.
Health issues rule
But for seniors, home value and market considerations are often secondary to health concerns.
"Assisted living is a market segment typically premised on immediate housing and care needs, where the consumer cannot afford to wait out current market conditions in the hopes of realizing maximum value from the sale of the primary residence," says Barbara Duffy, chairwoman of the Seattle law firm Lane Powell's Long Term Care and Seniors Housing Client Services Team.
"For seniors to meet the cost of assisted living, they must access the equity in their homes."
Duffy believes demand for assisted living is not likely to wane, and the shakeout in that segment of the real-estate market will be less volatile than the overall market. "We have not seen any profound reduction in the assisted-living occupancy rates, and many of the larger providers are seeing flat occupancy."
There are basically four models of senior housing:
• Low-income retirement communities.
• Independent-living facilities for active seniors.
• Assisted-living facilities with varying levels of care, which can include nursing and Alzheimer's units.
• Continuing-care retirement communities, for which residents pay an upfront fee in addition to the monthly service charges.
Recent data show assisted-living and memory-care occupancy have increased, while there has been a decline in moves into independent-living facilities.
For seniors whose health allows them to remain in their homes, many seem to be doing that while waiting for the market to rebound.
"The more independent you are, the more you're tied into the real-estate market," says Dwayne Clark, chairman and CEO of Aegis, a family-owned company that runs 34 senior communities in Washington, California and Nevada.
Clark says the market for high-end continuing-care communities, in which units can cost from a couple hundred thousand dollars to millions, is down.
"For those whose health allows them, more seniors are choosing to stay in their homes or move in with their children," he says.
To help attract residents, Mirabella, the first all-new continuing-care community built in Seattle in nearly 35 years, offers a 95 percent refundable entrance fee, meaning that money is returned to the clients' estates upon their passing, or if they choose to move out.
The monthly fees, which vary according to the unit chosen, pay for overhead.
"People have worked hard all their lives to acquire assets that they want to pass on to their heirs," says Paul Riepma, senior vice president of Pacific Retirement Services, which developed and manages Mirabella, in the South Lake Union neighborhood near downtown.
A far cry from the typical images of retirement homes, Mirabella is elegant urban living with scenic views of the Seattle skyline, Lake Union and the Space Needle.
It features a saline swimming pool, four restaurants, an arts studio and a 300-seat theater. The property has 289 independent-living apartments, 32 assisted-living units, 20 memory-care suites for people with Alzheimer's and 22 skilled-nursing suites.
"It is an ideal neighborhood for seniors," says Seattle City Councilman Tom Rasmussen. "It is pedestrian friendly and has great access to transportation and other amenities."
It's also just a few blocks from First Hill, with all of its hospitals and medical centers, another amenity for seniors.
There also are a variety of options available for lower-income seniors in Seattle.
The Low Income Housing Institute (LIHI) is developing the six-story Cascade Senior Housing complex near Republican Street and Minor Avenue North, with $5.7 million in capital funding from U.S. Department of Housing and Urban Development (HUD).
The project includes 50 apartment homes for seniors 62 and older who earn less than $27,250 annually. It's expected to be finished later this year. Eligible seniors will pay up to 30 percent of their adjusted gross income for rent and utilities.
"Cascade Senior Housing will fill a critical gap in the housing continuum for low-income seniors," says Rasmussen.
LIHI is also serving as development consultant for the Cabrini First Hill Apartments, being developed with a $5.4 million grant from HUD's Section 202 program (which expands the supply of affordable housing for seniors) combined with $3.5 million in low-income housing tax credit equity.
The building is the first project in the country to be built with both HUD 202 funds and tax credits, which will allow the building to house extremely low-income seniors.
The six-story building includes 50 independent-living units for seniors 62 years and up, community space, a computer lab, library room, a top-floor solarium and a landscaped courtyard.
The complex also includes 7,000 square feet of street-level retail space and an underground parking garage.
While private developers serve the high end of the senior market, the government helps serve the other end.
"The [Seattle] City Council is encouraging housing for low- and moderate-income residents to ensure a range of affordable housing," says Rasmussen.
Copyright © 2009 The Seattle Times Company
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