2003 03 21AGENDA
~EN gENIOR COMMI~ION
Friday, March 21, 2003
10:00 AaM. TO 11:30 P.M.
CHANHASSEN COUNCIL CHAMBERS
1. Approval of agenda.
2. Services Directory.
3. Congregate Dining & Meals on Wheels.
4. Update on Senior Center Activities.
5. Senior Awareness Month.
6. Senior Housing Update 2003.
7. Senior Commission Comments.
Adjournment
* The next Senior Commission meeting will take place on April 18~ 2003 at 10:00 am.
ADULT DAYCARE
If an older adult needs, or would appreciate a structured, safe daytime environment, there are
several adult daycare centers which tailored to specific medical or social needs of individuals.
Auburn Manor Adult Daycare Center .........448-9303
Sojoum Adult Daycare Center .............. 474-5105
Minnesota Adult Daycare Association .......536-1236
Helps people link up with a center in their area or to suit their needs.
ALCOHOL AND DRUG INFORMATION
Carver County Chemical Dependency Counselor ................. 448-3661
AL-ANON-ALATEEN Information service of greater Minneapolis..920-3961
Alcoholics Anonymous Intergroup .............................. 922-0880
Also contact your local churches
CASE COORDINATION
Social workers or nurses can help people identify what services they need and help them to arrange
to receive those services. Often, there is no charge for case coordination or fees are based on ability
to pay.
Carver County Social Services ............... 448-3661
Hennepin County Social Services ............. 3484500
Senior Community Services ................... 933-9311
CHORE/MINOR HOME MAINTENANCE SERVICES
People living in their own homes can get assistance with basic property upkeep such as
homemaking services, snow removal, lawn mowing, raking and minor home repairs. Prices are
based on ability to pay.
H.O.M.E .................................. 888-5530
Carver County Community Services ......... 448-3661
COUNSELING/SUPPORT GROUPS/COMPANIONSHIP
There are many different services available to help people adjust to physical, emotional or lifestyle
changes or challenges.
Carver County Mental Health Services ....... 4424437/448-1215
Ebenezer Community Services ................ 879-2805
Senior Community Services (Seniors Plus)...623-8697
First Call For Help ........................ 340-7441
Contact the Senior Answer Line at 824-9999 for information on any of the hundreds of support
groups in the metropolitan area.
For groups that may be available locally, contact local churches and hospitals.
D~SIVE DRIVING
Senior citizens are eligible for reduction in their automobile insurance ff they participate in
defensive driving "refresher courses" on a regular basis.
American Association of Retired Persons(AARP) ........... 473-8433
Carver County ........................................... 368-3688
Minnesota Safety Council ................................ 291-9150
Community Education/Chaska .............................. 368-3688
Carver County Employment Center ......................... 496-4160
Minnesota Department of Jobs and Training ............... 341-7163
Minnesota Senior Federation ..................... 2 ....... 642-1398
Senior Community Services ............................... 933-9311
FINANCIAL RESOURCES
There are many programs which provide financial support for adults with a variety of needs. Call
the following numbers: 448-3661
Food Stamps
General Assistance
Medical Assistance
Medicare
Social Security
Tax Assistance
Fuel Assistance
Home Weatherization
Carver County Community Health Center ............... 442 ~.493 / 448-3435
1-800-535-7560
Mobile Medical Closet ............................... 446-1151
Pre-Admission Screening of Carver County ............ 448-1216
Ridgeview Medical Center ............................ 446-1200
St. Frances Regional Center ......................... 445-2322
Health Information and Referral ...................... 445-2273
Vial of Life (Chanhassen Fire Department) ........... 937-1900
HOUSING
Adult Foster Care/Carver County Community Services ............448-3661
Community Action Agency (Home Share Program) ..................496-2125
/IRA ........................................................... 448-7715
Nursing homes/health care centers
Auburn Manor .................................................. 448-9303
Carver County Care Center ......................... 46%2145 / 448-1208
Nightingale Nursing Home Association .............. 872-1156
Waconia Health Care Center ......................... 442-2191 / 446-1200
Minnesota Senior Federation - Senior Housing Inc ...645-0261
Metropolitan Council Data Center ................................................................ 291-8140
* callers can acquire assisted living and nursing home guides for minimal charge
INFORMATION AND REFERRAL
Programs and services which link with community services in your area.
Community Action Agency ................ 496-2125
County Social Services
Carver County .......................... 448-3661
Hennepin County ......................... 348-3000
First Call for Help/West Metro Area ........ 335-5000
Minnesota Board on A~ng Senior Ombudsman .... 1-(800)657-3591
I-Iennepin and Carver County Libraries
Senior Centers
Senior Community Services .................... 933-9311
Senior Answer Line (Hennepin County Services) .... 824-9999
LEGAL SERVICES
Minnesota Legal Services ( Carver County Office)...(612)440-1040
(free legal assistance - availability of service based on limited income guidelines.
Lawyers Professional responsibility Board... 1 (800)657-3601
Investigates complaints against attorneys
Minnesota Senior Federation ............... 654-0261
Information and Referrals Attorneys. Referrals, Basic consultation. Lawyers hours are Tuesday and
Thursday, 10:00-2:00 p.m.
NUTRITION
Senior Dining Program- offers group dining atmosphere. Hot noon meals at
weekdays for moderate cost
Southshore congregate dining ............... 474-7977
central location on
Auburn Manor Chaska Dining ................. 448-9302
Meals on Wheels for Homo bound Seniors ...... 448-4991
Community Action Agency .................... 496-2125
Food Shelves-supplementary food for low income seniors
Contact Senior Answer Line at 331-4354 or First Call for Help at 340-7441.
FARE-S~ - People can exchange two hours of volunteer time for reduced prices for groceries
448-2615/448-3230
Carver County Community Services ................. 448-3661
Home Delivered Meals - Hot, nutrition noon meals delivered to individuals Monday through Friday
for a nominal fee
Community Action Agency .................... 496-2125
RECREATION
Chanhassen Senior Center .......................... 937-1900
Chanhassen Park and Recreation .................... 937-1900
Park systems - Carver County ...................... 448-6082
Park systems - Hennipen County .................... 559-9000
SENIOR CENTERS
Chanhassen Senior Center .......................... 937-1900
Southshore Senior Center .......................... 474-7635
TRANSPORTATION
Carver Area Rural Transit (C.A.R.T.) ............. 448-1209/823-5000
Hours to call: 8:30-1:30 p.m. Monday through Friday.
Southwest Metro Area Transit / Dial-A-Ride ....... 944-7126
To and from downtown Minneapolis ................. 934-7928/82%7733
West Metro Coordinated Transportation (Information and Referral)...331-4354
VOLUNT~:I-,:KISM
Carver County Volunteer Services .................... 448-3661
District 112 Community Education .................... 368-3688
H.O.M.E ............................................. 888-5530
Retired Senior Volunteer Program (R.S.V.P) ......AaM.496-8154, P.M.331 4467
Chanhassen Senior Center
690 Coulter Drive, Chanhassen, MN 55317
Senior
Housing
Update
2003
.eld
Researcl~ Inc.
615 First Avenuo NE
Suite 40O
Minn~polis, MN 55413
612.338.0012
SENIOR HOUSING UPDATE 2003
Foret ar#
Max~leld geaeareh La pieced to preaent our St~tldr Hott~lt~,Mtttg~t [/ptJttt~ forYflt~.
The lmpetua ~or thLa report La to provide the 6entor housing industry with current market data
critical to under6tanding thLa rapidly $~'owing and ever evolving industry on a local level The
data can be ut/l/zed to diacover opportunlt/ea aa well aa ~lag areaa that ma2 be In dan~er o~
temporary aaturat/on.
For tS yeara, Max~ield geaeareh baa been tracking the local aenior houaing market through an
annual compreher~ive ~urve2 o~ all market-rate aenior boy, lng development6 in the Twin
Cit/ea Metro Area~ The data collected ~'om our aurvey provldea the indu~tr~ with the moat
comprehenatve and current information available on total aenior houatng market trenda.
The ln[ormation contained in thla year'a report waa collected by Maxtield geaeareh through
telephone aurveya conducted with individual prope, rty managera and ournera dur/n~j the
~ourth quarter o[ 2002. In the paat, our metro-wide aurvey had been conducted durin~ the
~irat and aeeond quartera o[ each year. However, the lingering e~eeta o~ the September IlL
diac~ter reaulted in a alow-down in tra~lc at many aentor projeeta the ~ottowlng aprin~.
Therefore, we decided to poatpone the aurve2 to better re~leet more normal market
condit/ona.
The aurvey ia limited to ~market-rate" and 'a[~ordable' aenior developmenta and thua,
exclude6 projeeta with a 'deep' a ubaidy. Aa in the paat, the aurvey lncludea oniy
'eatabllahed' projeeta - thee that have been open ~or occupancy [or at leo3t 12 montl~ or
have reached atabil/zed occupancy (95~ ~or independent living and 93~ ~or Aaaiated Living).
Thia year'a aurvey ineludea juat over 320 individual projeeta with 22,112 whit&.
We hope you ~ind the information in thla report help~ttl. I would like to peraonal{2 thank att
the propert~ mana~era and ownera that have responded to the aurvey now and in yeara
paat, ~or without the information they provide thla report would not be poaaible.
SENIOR HOUSING UPDATE 2003
The State of the Senior Homing Market. The first three yeaus of the new. miHmnium
saw a significant number of new senior units enter tho mad~ place and overall vacancy rates for
senior housing inched upward from the low rates experienced in the late 1990s. Since 2000, over
5,120 units have opened in the Metro Area bringing tho total numbe~ of units to nearly 24,000
units as of the end of 2002. Based on the level of activity in the pipelino, we expect the number
ofnon-subsidized smior housing units in tho Motro Ama to e~cood 30,000 by tho md of 2005;
barring any major market downturns (see Figure 1 below).
6,o0o
12,ooo
o,ooo
I~t Q~ln In S~nlor Houaing Unlt~
7-County TwIn CIt~B Metro Ama
Our 2002 survey again showed an overall senior housing vacancy rate of 3.8% as of 4~ Quarter
2002. Recent history shows that overall, senior vacancy rates in the Metro Area bottomed-out at
2.4% in 1999, then inched up to 2.5% in 2000, before jumping to 3.4% in 2001. (see Figure 2
below).
9.0
8.0
7.0
6.0
~l.0
3.0
2.0
1.0
0.0
Figure 2
Senior Housin~ Vacancy Rate
Twin Cities Metro Aret
8.2
5.7
q~~7 4.2 4.0
-1-
SENIOR HOUSING UPDATE 2003
In addition to collecting occupancy trends, we have also have been carefially monitoring the
absorption rates of recently opened projects and have noticed an overall decline of 10% to 15%
in average absorption rates of new units over the last two years. While most new developments
are still maintaining adequate, if not rapid, absorption rates, an increasing number of projects are
not performing as well as projects of the recent past. In addition, there have been a handful of
newer projects that have seen absorption levels far below historic norms. In most eases, those
developments are not meeting the market's expectations and preferences in tenm of product
quality, service offerings, and value, or are not adequately marketed and/or numaged. In most
cases, the projects with lagging absorption are also much higher-priced than the pfimmy
competition.
While the market for senior housing in the Twin Cities still remains relatively strong and we
have yet to reach wide spread market satta'afion, the industry is definitely becoming increasingly
competitive and we believe that increasing vacancy rates will appear in future surveys. Cra'rent
demographic trends would tend to indicate that growth in demand for senior housing will wane
somewhat over the short-term as most senior homing will be marketing to a smaller Depression-
era generation. Based on the significant number of developments currently planned to come on-
line over the next several years and the entt3, of inexperienced senior housing developers into the
market will push vacancy rates upward from their current levels over the short-term In-depth
research will become increasingly imperator in order to identify appropriate locations, products,
services programming and market niches that will set a project apart fxom the existing product in
an ever-increasing competitive market place.
Construction Trends. During 2002, the Seven-County Twin Cities Metro Area saw the
addition of 1,884 new senior housing units. This figure was just slightly lower than we had
projected to be built in last year's report as several developments' openings were delayed until
2003. Still, the number of units added during 2002 was the most added in a single year, since
1988 when a record 2,065 units came on-line, and shows a continuing acceleration in the mount
of senior housing product being developed.
As Figure 3 on the following page shows, between 2000 and 2002, the Metro Area saw an
average of nearly 1,720 senior housing units come on-line. This compares to an average of just
over 1,150 units annually during the period 1995 to 1999, and the 660 un/ts per year built
between 1992 and 1994. The level of construction over the last three years is just shy of the
construction levels that occurred during the first of the Metro .Area's senior housing booms,
when an average of nearly 1,740 units were added each year between 1986 and 1988. The
number of market-rate/affordable senior housing units currently in the planning process could
produce an additional 2,070 senior homing units annually in the Twin Cities Metro Area over the
next three years.
-2-
SENIOR HOUSING UPDATE 2003
.0
While senior hOusing development during tiao 1980s ..con~ on 'T_,ongrega~e" mmal
housing, today's senior housing has evolved into a complc~o continuum of products dosign~ ~o
accommodaIe the lifestyle needs of extremely diverse manet segments; from younger active
seniors who may simply desire to live among peers and desire the freedom from mainlaining a
single-family home, to vezy frail seniors in need ofhou,sing with support and personal care
services. Of late, there has been a resurgence of owner-occupied housing for seniors, ai~ nearly
a decade of very little construction. Between 1995 and 2002, 2,060 units of owner-occupied
senior housing were built accounting for an average of 260 per year or just fewer than 20% of the
smior housing units built in the Mc-tro Are~ As Figure 4 below show~, the owner-occupied
senior housing is projected to grow significantly with at least an additional 1,800 units planned
through 200:5, transla~g to an average ofjust over 600 units per year. B~m 2003 and 2005,
we estimate that owner-occupied senior housing will account for about 30% of the senior units
built in the Metro Area.
1800
16(]0
1400
1200
Twin Cltl.. ~tr~l~lltss A~e. -.: :.?.-".'-;-~:-'.-:'-':.' :.:-.......-~: .
............... -.. .......... -,.: ............ · ..... ,....:.-.,,.,:.--..
SENIOR HOUSING UPDATE 2003
Types of Senior Housing. In order to understand potential opportunities within the senior
housing market it is critical to understand the differences between the various senior housing
products offered in the market today. Maxfield Research Inc. has developed the following senior
housing classifications based on the level (or lack) of support and/or personal care services
offered.
ct, termed "~j ects, offer virtually~_ support services
to those ages 55 or 62 and ov--~.-. These pr~ are usuall);
at~ehf-st~Ie r~ntals, bu]'~lso include ago-r~strieted condominiums, cooperatives, (for-sale and
rental) townhome developments and even detached housing units. Some of these developments
provide scheduled transportation and limited activities for residents.
ite' projects offer support services such as transportmJon~meals and homekeepino
ditional Cost-~ptional 's-ervic~)-0r inclUded in the monthly fee (service-inclusive).
~These developments tend to attract an older and frailer resident than do Adult Pm~ects.
Congregate units ~i-kely~be occupied by a single person (typically 75 to
85% of the units) than Adult projects which can have as many as one-half or more of their units
occupied by couples.
The most service-intensive product types, Assisted Living_ and Memory Care,~
lev~t~servmes ffib-ff-Of a nursing home. "Assisted Liv~-ng" housing typi~lly includes at least
~'o'~-~--d~y meals-as'Well as all ofthe su orr services found in Congregate housing. Most
distinguishing however, is that Assisted Living homing also provides 24-hour staffin ~g__~..~.d
emergenc3' response along with the availability of_ I~_ersonal care assistance (bathing, dressing,
g'i'~ b-m~n~ ................... --'
"~Memory Cm~e" housing is a speciali ._zed' Assis.t~i_, Living_product specifically~
programrfied for per,om afflicted with'.~i~eimer s disease'or o--ffie~ d-~--~-fi~. ~ facilities
~ame services as~ Assisted Living, additional~-a~-et~ through secured-
access doors and/or wander-guard systems as well as higher staff-to-resident ratios.
Furthermore, special active (stimulating) and passive (calming) programming is involved to
respond to this population's needs. While Memory Care facilities can be freestanding buildings,
just as often, they comprise a wing of a traditional Assisted Living facility.
We have defined "Affordable" senior housing as units targeting modest income households.~
The projects have a~gs on~~nts an-d-f~ts typically set to be affordable to
persons with incomes of up~o 60% of the County median versus deep-subsidized projects where
rents are typically based on a sliding scale (generally 30 percent of adjusted ho~ehoid income)
and are geared towards very-low income seniors. Affordable Housing usually receives some
type of shallow subsidy, and are usually financed with Tax Increment Financing, Tax-Credit
Financing or through a special County/City sponsored tax-levy. They. can be flee-standing
developments but increasingly consist of units within a mixed income-building were market rate
units are also present. Usually, the Affordable product offers few services unless the units are
within a market rate building with Congregate services available on an optional basis.
-4-
SENIOR HOUSING UPDATE 2003
_Affordable~..~_~.. Another 89 projects, wilh'a total of 6,558 umts were classified.as market-ram
~ects. Although, Adult projects are more numerous, the Metro Area's 79 Co_n~gate
projects and their 8,162 units account for the largest share of the actual housing units, due to
their larger average project size. A total of 71 Assisted Living far.ties with 3,929 .nits were
also identified as were 40 Memory Care facilities containing 892 units. The average Affo~le
development comists of 56 units; Adult proj~ average 75 units in size, Congregate projects -
108 units. Assisted Living - 55 units, and Memory Care facilities - 22 .nits.
Figures 5 and 6 below show the current di~ffibufion of senior units amang the various product
categories as surveyed during 4t~ Qum~ 2002. _Congr~a~ proj~ currmfly account for 37%.._.
of~..~_~_~_~_~~ Area's senior units, followed by Adult projmts which account for 30%. of ail mits
and Assistecl-Livi~~c~~co~s~-220~o (of~ Whi-~ 4% are ~--emory Care) o~ all units.
~ account for 12~fthe non-subsidized senior hous~ Twin
Cities Metro Area, a figure that has been steadily declining since the mid-. 1990s (when they
accounted for 15% of all units), as market rate hou6ng has dominated and tax credits are no
longer available for financing senior housing in the State of Minnesol~
Figures
NON-SUBSIDIZED SENIOR HOUSING IN THE 7-COUNTY TWIN CITIES METRO AREA
4th Quarter 2002
Projects
Units
Avg, Size
48 89 79 71 40
2,571 6,558 8,162 3,929 892
56 75 108 55 22
Mgure 6
Senior Housing Di~tlmfl~m of Surveyed Projects
7-County TCMA
4th Quarter 20412
Total
327
22, L12
68
Memmry Carm
4%
SENIOR HOUSING UPDATE 2005
Geographic Distribution of Senior Housing. For the purpose of this report Maxfi~
Reseaw~ has divided the 7-County Metro Are into six quadrants; Minnoapolis, St. Paul, the
Northeast Metro, Northwest Metro, Southeast Metro m~i the Southwest Metro; shown on the
map below.
Twin Cities Quadrants
-6-
SENIOR HOUSING UPDATE 2003
The Southwest Metro has, by far, the largest number of senior housing units (6,545 units) and
comprises 30% of tho Metro Area's markot-ra~ and. affordable se~ior housing units. Tho
Northwest quadrant has tho sooond largest numbar of units (5,134 units), followed by tho
Northeast (4,977 units) both acco~ for about 23% of fl~o Metro total and the Southeast
(2,294 units) with 10%. M~nneapolis (1,844 units) and SC Paul (1,318 units) acco~ for 8% and
6% of the Metro Area's non-subsidized senior units, respectively.
Figure 7 shows the number of senior housing units in each quadrant broken out by the product
Hguro 7
l)ls~ributlon of Sonlo~ Units by 3~Je & Qumir~t
TCMA, 4ih Qumrbr 2002
8t.P Mpb SE NE NW ' SW
Adult projects have proliferated in the Northwest, where the 1,990 units comprise 40% of the
quadrant's senior housing and 30% of tho Metro Area's Adult units. Many of the units are found
in older general-occupancy projects that have been convet't~ to mode~at~y-priced senior
housing. Market rate Adult housing accounted for 50% of the units in St. Paul but only 7% in
the City of Minneapolis.
Congregate homing dominates in Minneapolis where it comprises lhree-quarte~ of the city's
units and in the Southwest where it accoun~ for half of all senior housing units. Congregate
projecls comprise anywhere from one-quarter to one-third of the units in the remaining submban
quadrants but only 16% of the unfls in St. Paul. Overall, nearly 40% of the Metro Area's
Congregate units are located in the Southwest Maro.
-2-
SENIOR HOUSING UPDATE 2003
Assisted Living currently comprises between 13% (Minneapolis) and 31% (St. Paul) of the
.senior units in each quadrant, with the Southwest Metro accounting for nearly one-third of the
Metro Area's Assisted Living units.
Memory Care housing is concentrated in the suburban markets were it comprises 4% to 7% of
the senior units each quadrant. Tho Southwest quadrant account for tho largest share -- nearly
one-third - of tho Metro Area's Memory Care units, while Memory Care units accounting for the
largest share of units in the Southeast (7%). Memory Care Assisted Living accounted for less
than 1% of the units in the two core Cities.
While Affordable Housing product accounts for only 12% of all units surveyed, it comprises
26% of the units in tiao Southeast.and 23% in tiao Northeast. Affordable units accounted for only
3% to 8% of the units in the remaining quadrants.
The concentration of Affordable units in the Southeast is the result of a special tax-levy imposed
by Dakota County. The Dakota County Commtmity Development Authority (DCCDA) has been
and continues to be active in developing senior housing. Since 1990, the DCCDA has built 14
projects with 784 traits (745 affordable and 39 market-rate). Of these, 545 units are located in
the Southeast Metro (with projects in Apple Valley, Eagan, Inver Grove Heights, Mendota
Heights, Rosemount, South St. Paul and West St. Paul) and 239 units in the Southwest Metro
(Bumsville and Lakeville)..The pro~ects have been extremely successful, having maintained full
occupant3' ~vith sign~ficant waiting lists.
·
The large number of Affordable units in the Nortl~east Metro is primarily the result of a
concentration of. tax-credit-finan~ cottage-style housing product This product has been
extremely successful, capitalizing on the large moderate-income mar'~'fotm, c~m the No.east
~-5-urbs as ~ei-1 ~lgll~i~g resid-er~l~ frorfl sur~ounch~g neighborhoo_ds i_n st Paul. U_nljke
adjacent states hOwe~er, the Minnesota Housing Finance Agency, which administers tax credits,
has significantly reduced the use of this financing for senior housing development choosing to
focus the program on family housing.
The development of Affordable senior housing has also b~n sponsored by several municipalities
including Blaine (Blaine Court and Clover Leaf CourO, Champlin (Mill Pond Gables), Eagan
(O'Leary Manor), Maple Grove (Woodland Mounds) and Plymouth (Plymouth Towne Square).
Market Conditions/Vacancy Rate Trends. Throughout the 1990s, the Twin Cities
Metro Area's senior projects saw substantial declines in their vacancy rates with the overall
senior vacancy rate declining from nearly 9.0% in 1990 to 2.4% in 1999. In the early 1990s, the
declining vacancies resulted from a slowdown in development of new units which allowed
demand to "catch-up" with the large supply of mostly Congregate housing that was developed
during the boom of the mid-to late 80s. As development resumed in the mid-1990s, the diverse
variety ofhousing product being introduced (Adult (rental and ownership), Assisted IAving and
Memory Care) allowed for the industry to tap into market segments previously being
underserved. The recent surge in senior housing development has resulted in modest increases in
-8-
SENIOR HOUSING UPDATE 2003
vacancy rates since the market's nadir of Z4% in 1999. Between 2000 and 2002, the overall
senior housing vacancy rate in Twin Cities Metro incre~ed from 2.5% to 3.8%.
Despite tho modest rise in vacancy rates over tho last ~hreo years, the ma&et for Affordablo as
wellas independent senior, product (Adultmui Coogmg~) still remains, stroogMem~wi~ with
vacancy ra~ well below tho indusUy equilibriu-m standard of 5%. As of 4th Quarter 2002, a
mere 1.1% ofthe Affordable units were vacant, 2.1% or,he market-rate Adult product was
report~ vacant as were 3.3% of tho Metro Area's Cc~gre~ units. Me~whilo, vacancy rat~s
for Assisted Living/Memory Care homing in the Metro had a composite vacancy r~ of 8.3% -
slightly higher, than tho 7% vacancy rate that is comfortable in Assisted Living housing. The
Metro's traditional Assisted Living facilities are aurmfly operating with a 7.7% vacancy rate,
while Memory Care units are experiencing an 11.4% vacancy rate Metro-wide.
Over the last 18 months, vacancy rates increased slightly across all independent senior product
types, while both Assisted Living and Memory Care units saw modest declines. It is interesting
to note that although the vacancy rate for Congretp~ proj~ increased to its highest level in
five years, more than half of the Congregate fac/lifies surveyed were 100% occupied, and that
neady one-third of the vacant Congregate units were located in only four struggl/~ pl'ojec~.
Exclude these four projects, and the vacancy rat~ at the re,siring Metro Area Ccogre~te
projects drops to a respectable 2.3%. Figure 8 displays Metro Area vacancy' rates for
independent senior product for 1998 through 2002, while Table 9 shows vacancy minds for
Assisted Living housing in the Metro Area over the last five years.
4.0%
3.5%
3.O%
2.5%
2.0%
1.5%
1.0%
· . -
0.o%
3.3%
1.4% 1.3% 1.3% ~
· 1.1% ~ ......
o.7% o.s% ' ' 'o.e¥. ..........b.-z',/ ..................
SENIOR HOUSING UPDATE 2003
Typically a vacan~ rate of 5% is considered equilibrium for independent senior housing.
Vacancy rates well below this figure indicate that the demand for indepeadent housing product
continues to surpass the supply. Demand is particularly strong for Affordable and Adult product,
where vacancy rates have remained around 1% or less.
Due to high remover rates in Assisted Living housing (anywhere from 35 to 50% per year) and
the need for adequate consumer choice, a vacancy rate of at least is 7% is considered healthy in
tho Assisted Living industry. Nationally, Assisted Living homing has seen vacancy rotes
stabilize at around 10% over the past several years while the local market fared better than the
nation, with vacancy rates for traditional Assisted Living hovering between 7% and 9°,4. While
occupancy statistics are not available for Memory Care Assisted Living nationally, in the Twin
Cities Metro, vacancy rates for Memory Care Assisted Living remain relatively high (11%), but
are currently at their lowest rate in the last five years. The substantial vacancies over the past
five years can be attributed to the large number of Memory Care units that have been developed
during this period (particularly in 1998 and 1999 when 463 units camo on-line) and declined the
last two years representing the slow and steady absorption of these units.
Figure 10 on the following page shows vacancy rates by product type for each of the six markets
examined. Overall vacancy rates ranged from 3.0% in the Southwest and 3.1% in the southeast
Metro to 4.6% in Minneapolis and St. Paul. The Northeast Metro reported an overall vacancy
rate of 3.9% while the North~vest reported a 4.1% vacancy rate.
SENIOR HOUSING UPDATE 2003
lrlguro If
SENIOR VAC. AN~'Y RATES BY (~UDRANT ~s PRDDUCT T3~E
TCM. A- 2002
Pro] Umlts Var.. q4 ..~.~ Pro] Umtb Vae. ~ Pro] Umb Vat. ~
Mpa. I ~ 2 2.0~ ~ 2 ~ I o]M ~ 8 ~2 ~ 4J~
. ·
. .
~ 8 398 S ~ ' ~ ~1 61 3.~ ~ ~ 47 ~
L0~ .:~. ~ ~8 ~ ~ ~ S ~ ~ 3~%
6m
6
.. I ~
S~ 2 41 2 4A . 8 ~ a ~m ?? 3 2M 9 4.~
. . .
..- ~'~
A~ Im ~ "- 74 '~ ' ~3
Pro~ unb v~ % Pro] unb v~ % :~:: ~ units v~. %
Mp~ 6 ~ M 6.~ . 1 ~ 0 0.0~-',.'.~ ~ ~ ~ 4~
NE il 883 71 8.0~ 8 ~0 21 W.~ 75 4~ ~6 3~
~ ~ 882 86 9]% 8 ~ 24 ~.~ 75 5,~4 ~ 4.3~
.-.
SE 8 ~ ~ 6~ 7 ~1 ~ D.~ 47 ~4 74 3.~
..
St.P 5 397 36 9.~ I ~ 0 0.0~ ~ ~ ~ 61 4.~
SW ~ ~ 76 5.~ ~ ~6 35 ~ ~ 6~ ~6 3.0%
.
To~l ~ 3,929 301 7.~ 40 B92 ~2 ~4~ 323 22~ B33 3.~
AvB Sho SS 22 69
The Affordable housing market continues to be fight across the Metro Area, except for St. Paul
where there are currently only 41 units of. Affordable senior housinF~ The rermin~g submnrkets
reported vacancy rates of between 0.7% and 2.0°5. The market for Adult product was once again
strong throughout the Metro, with vacancy rates ranging from 0.8% in Minneapolis and the
Southwest Metro to 3.1% in the Northwest Metro.
Over the last 18 monhhs, the Congregate market in the Twin Ci~ies has softened but remnins
viable with vacancy rates ranging from2.2% in.the Southwest Metro to 4.8% in Minnoap01is.
Congregate projocts in the Northwest have a vacancy rate ofjust less than 3%, while the vacancy
rate remains below 3.5% in the Southeast Metro and just below 4% in the Northeast (where the
majority of vacant Congregate units are concenUnted in one project). Excluding _thi~ project, the
vacancy rate for the remaining Congregate units in the Northeast drops to only 1.8%.
SENIOR HOUSING UPDATE 2003
Conmuy to the independent living market, vacancy rates for Assisted Living housing in the
Metro Area declined from 8.7% to 7.7% over the last 18 months, while the Vacancy rate for
Memory Care housing declined from 15.8% to 11.0°/6.
Over the last several years, a si~tmificant share of Metro Ama's Assisted Living and Memory
Care vacancies are located within a handful of under performing projects which has inflated the
Metro Area's overall Assisted Living vacancy rates. These developments account for 30% of tho
Assisted Living and Memory Care vacancies despite the fact that they compromise only 18% of
the total number of units. These developments are characterized by flee-standing (not part of a
continuum of care campus) Assisted Living/Memory Cam facilities, are chains owned by largo
national sev. ior housing developers, and have smaller than average units (in many cases suite-
style units versus apartment-style).
Even so, Assisted Living vacancies wore found to be more widely distributed this year compared
to previous years. Despite the fact that overall Assisted Living vacancy rates have declined by a
full percentago~point, the median vacancy rate of the Metro's Assisted Living projects increased
from 4.8% in 2 Quarter 2001, to 5.0% in the 4~ Quarter 2002. Conversely, tho median
vacancy rate of tho Motro's Memory Care facilities decreased from 7.7% to 7.1% during the
same period, while overall vacancy rates declined from 15.8% to 11.0%.
It is important to note that tho survey only included "established" developments (those that have
been open for 12 months), and a significant number of new developments wore in their initial
lease-up period at the time the survey and could impact occupancy levels among some
neighboring established developments over the short-term.
Increasing Product Diversification. Contributing to tho expansion and success of the
loc~l senior housing market is the ever-increasing variety of product available in today's market.
As Figure 11 on the following page shows, senior housing construction in tho 1980s was
dominated by Congregate housing. This lack of product differentiation played an important part
in tho senior housing market's downturn during the end of that decade. During much of tho
1990s, development was concentrated at opposite ~ts of the service continuum with greater
numbers of Adult and Assisted Living product being constructed.
Since 2000, the development of Adult and Assisted Living housing has been as strong as ever,
however, the development of Congregate housing has also rebounded. Between 1990 and 1994,
there was an average of 120 Congregate units built in the Metro Area annually. Between 1995
and 1999, the number of Congregate units built averaged 220 units. Furthermore, it is projected
that between 2000 and 2005, an average of 390 Congregate units will be added each year. Adult
housing however, has seen the most dramatic acceleration. During the first half of 90s, the
Metro Area saw an average of 290 Adult units open each year. The second half of the 1990s saw
approximately 610 new Adult units annually, and between 2000 and 2005, it is estimated that
nearly 1,050 Adult units will come to market. In comparison, an average 130 of units of
Assisted Living and Memory Care housing were brought on line during the early 1990s. During
the late 1990s, the market saw the addition of nearly 350 Assisted Living units annually; while
an average of nearly 460 Assisted Living units are expected eacah year between 2000 and 2005.
SENIOR HOUSING UPDATE 2003
Sentor ~oustnf 1)eq~01nme b~ Year
...... [ m Assid.~ X,h,~ns ...................
Between 2003 and 2005, we have projected fl~t an additional 6,200 plus units of non-subsidized
senior housing could potentially come on-line in the Twin Ciiies Metro Area Tho Southwest
Metro is likely to seo the largest increase with 1,665 units planned (27% of tho total), followed
by the Northeast (1,460 units, 23%), Northwest (1,220 units, 20%) and tho Southza~ (1,060
units, or 1'/%). The remaining 13% ofthe proposed smior units are expected to be located in the
Metro' s urban core, with 636 units proposod in SC Paul (10% of the total), and only 165 units in
Minnea~lis (3%). Figure 12 c~ the following page shows the disUi~ ofpending senior
housing units by type and location
SENIOR HOUSING UPDATE 2003
].,8OO
h6oo.,
~.4oo
1,000
8OO
4OO
0
Mgure 12
PEI~DINO S I~IOR HOT/6 lNG D~PM]I~dT
[~MC
34 Adult-Rmltal
Adult-Ownera .hip
sw ne nw se stp mph
Between 2003 and 2005, Congregate and Assisted Living housing will lead the boom in the
Southwest Metro, while in the Northeast, Adult h6using, particularly rental, will dominate.
About half of the senior units in the Southeast Metro will be owner-occupied which includes a
large (210 unit) age-restricted detached villa development and several senior condominium
buildings (with 168 units) proposed within the Evermore master-planned neighborhood in
Rosemount. Development in the Northwest is expected to consist of roughly equal numbers of
independent (Adult and Congregate) and Assisted Living (Traditional and Memory Care)
housing. All types of senior housing (with the exception of Memory Care housing) is expected
to be developed in St. Paul while in Minneapolis, only a modest number of Adult rental units are
currently planned.
Rendval in Owner-Occupied Housing. Although 86% of Metro Area senior units are
rental, the development of senior ownership housing is strong and growing. The resurgence in
cooperative and condominium housing, combined with the recent introduction of age-restricted
townhome and detached villas communities are all creating more diverse options for today's
seniors.
As of the end of 2002, there were nearly 3,840 age-restricted owner-occupied housing units in
the Twin.Cities Metro comprising just over 14% of the Metro Area's non-subsidized senior
housing. This figure represents a significant increase since 1995, when just 9% of the Metro
senior units were owner-occupied. If all of the proposed for-sale senior product proposed are
-/d-
SENIOR HOUSING UPDATE 2003
built, we project owner-occupied housing would account for almost 19% of~ho M~'s n~n-
subsidized smior ~nits by 2005 (soo Figures 13 and 14).
[~ CRdo
r~ C~.
OwnoF-Occulled Units ts a %ofTo~! Senior Units
17.3%
19.
%
17.2%
16.1%
5~% 15.5%
16.1~
14.3~
13.0%
14.1%
1%
11.2%
10.
~%
SENIOR HOUSING UPDATE 2003
Coopermive housing product with a total of 2,350 units in the Metro Area comprises just over
10% of the Metro's non-subsidized senior units and accounts for over 60% of the Metro's
owner-occupied units. Another 990 units are in senior condominium buildings and 500 units
consist of either townhornes or detached villa Overall, for-sale housing had a vacancy rate of
1%. The low vacancy rams in owner-occupied housing product are aided by the build-to-
demand character and pre-sale requirements of these projects. Owner-occupied housing
typically is designed and marketed toward .younger active seniors. Only about 15% ofthe owner-
occupied senior housing units in the Twin Cities are in projects where support services are
provided.
Demographics/Demand Factors. As of 2000, there are 2~,I~00 persons age 65 and older
and 124,630 persom age 75 and older in the Twin Cities Metro Area. This repres~ an
increase ofjust over 30,112 seniors (13%). This growth in seniors was about 20% less than what
the Metro Area experienced during the 1980s (an increase of 36,926 persons). ~
._grg_ wth d. uring the 1990s cam be attributed to a stabilizing of birth rates durine the Great
Depression of the 1930s. The impact of the Depression-era generation cam be dearly be seen in
~d~e modest growth in the number of younger seniors (persons age 65 to 74) during.the last
decade. Between 1990 and 2000, the number of younger seniors in the Metro Area increased by
only about 5,000 persons (4%), while the Metro Area older senior (age 75+) base -- the primary
market for most types of senior homing--gained 25,000 persons (25%). Over the course of the
current decade, the aging of the Depression-em generation will have a moderaffng effect on
growth among older seniors. Over the short-term, the Metro's senior population will.steadily
increase with a projected increase of 43,000 seniors (17%) between 2000 and 2010. Nearly
three-quarters of this groxvth, however, will be among younger seniors.
ioe aging baby boom population should that demand
ensure
for,senior
housing
will
continue
to
ow well into the first half of this century, with the Metro Area s senior population expected to
re than double in size over the next three decades. Growth in the sexfior population will begin
accelerate shortly after 2010 as the leading edge of the baby boom begins entering their mid-
S.
Betxveen 2010 and 2020, the Metro Area senior population is projected to gain an additional
132,700 seniors, with expected increases of 104,000 persons (64%) age 65 to 75 and 29,000
persons (21%) age 75 and older. Demand for senior-housing-with-services will escalate
dramatically after 2020 with the aging of the baby boom into their late 70s. Between 2020 and
--
2030, the Metro Area's senior population is projected is grow by~ersons (42%)
equa~g to 627,500 persons age 65 and older and 285,000 persons 75 and older by 2030 (see
Figures 15 and 16 on the following page).
SENIOR HOUSING UPDATE 2003
350,000
300,000
250,000
200.000
150,000
100,000
50,000
10S,479
82,728
1980
· Fi~n-e IS
s li~OR (6S+) POPULATION *13t]ffqDS
T(~A
342Jso
269
55-74 I
75+ I ' '
Im
12S,638
99.495
1990
130,61S
124,630 ..
2O00
141,900
......
2010 2020 2030
Figure 16
SI]NK}R POPIX,ATION GRO~FI'fl
TCMA
IC!75+
[] 65-74
1980--90
1990-00
2000-10
SENIOR HOUSING UPDATE 200?
The recent release of the 2000 Census data has shed new light on several factors that will impact
the demand potential for senior housing both in the short- and long-tenn.
Interestingly, despite the fact that nearly 8,000 senior rental units were built in the Metro Area
during the.1990s, the number o£households headed by persons.age 6:5 and older that rented their
housing increased by only 620 (3%). In contrast, the number of senior homeowners increased by
nearly 27,000 households (22%). For households age 6:5 to 74, there was a reported net loss of
nearly 2,400 renters (a 14% reduction in renters), while the number of older senior households
(7:5+) that rented their housing increased by 3,000 households (12%). Between 1990 and 2000,
the homeownership rate for.the Metro's older seniors (7:5+) increased from 60°/5 to 66% of all
households, while for younger seniors, homeownership rates increased from 78% to 82%.
i
FIGURE 17
SENIOR HOUSEHOLD TENURE
METRO AREA
1990 & 2000
Own Rent Own Rent
Total ~ No.~ No. Pct. Total No. Pct. No. Pct.
.... ".' -: : '. ..,-'-i' ~"* ~: ~?'~,~q]19 ~i~-'~
Minneapolis 10,103 7,011 ' 69.4 3,092 30.6 12,719 8,806 69.2 3,913 ~.8
St. Paul 8,603 :5,983 69.5 2,620 30.5 10,707 6,765 63.12 3,942 36.8
Rem. of Molro 63,815 55,036 86.2 8,T/9 13.8 57,483 38,102 66.3 19,381 33.'7
I i · i i
Mmpolis 15,493 10,918 70.5 4,:575 29.5 16,378 10,042 61.3 6.336 38.7
St. Paul 12,307 8,607 69.9 3,700 30.1 12'673 7,341 57.9' 5,332 42.1
Rem. of M~n-o 47,365 38,772 81.9 8,593 18.1 31,733 19,164 60.4 12,569 39.6
!
Minn~poli~ -5.3~0 -3,907 -35.8 -1,48~ ~.4 3,659 -1,2~6 -12.3 -2,42:t -38.2
81. I~I -3,704~ -2'624 -30.5 -1,080 -2.0.2 -1,966 -576 -"/.8 -1,390 -26.1
R~. of M~ro 16,450 16,264 41.9 186 ~-~ 25,750 18,938 98.8 6,812 54.2
$our~,~: U. $. C~mm Bur~u, l~xfi¢ld ~ In~.
This homeownership trend will impact demand for senior housing over the course of the next
two decades. The.stronger growth in younger seniors, their obvious preference for ownership
housing, and the expansion of homemaking and home health care services for the frail elderly
should allow for-sale senior product to capture an increasing share of market demand over tho
next several decades. Meanwhile, growing market acceptance of senior housing when combined
SENIOR HOUSING UPDATE 2003
with appreciating home values and increased wealth of fulme seniors should traml~ to a ~
growth in tho number of frail seniors that can.afford market rate Congregato and-Assisted Living
housing.
One of the most dramatic trends exposed by tho 2000 Census was lho subslanfial decline in
seniors in the two Core Cities. During the 1990s, lira City of 1wlnneapolis lost nearly 9,050
senior households, a decline of 40%, while the St. Paul lost 5,670 senior households,.a decline of
29°/~ A lack of development of senior housing in the core cities over the last decade coupled
with the strong urge of the eldedy to follow the/r children to the suburbs (the "shadow
migration" effect) has ~peditod tho outpouri-~ of seniors from tho core to tho outer suburbs.
During tho 1990s, the suburban portion of the Me~ Area saw its senior household baso grow by
42,200 households, an increase of 35%. Figure 22 below presents tho top 15 metro Comnnmities
by senior population in 2000.
Between 1990 and 2002, the pea~nt of Metro Area smior households residing in non-subsidizod
senior housing more than doubled, from roughly 6.4% to 13.3%. -The market saturation rates
(the ratio of Affordable and market-r~ senior housing, units over the total number of senior
households) in the Metro Area, range from 6.9% in St Paul to 16.9°,4 in the Northeast Metro.
Figures 18 and 19 show a comparison of the market pe~rafion rates in the various Metro Area
quadrants.
Comparing the supply of non-subsidized senior housing units to the number of senior households
at various different income levds shows that the curre~ supply of Affordable and market rate
senior housing units in the Metro Area would house 16% of all Metro Area senior households
with incomes of $15,000 or more. When comparing tho number of market ra~ units to the
number of senior households with incomes of $25,000 or mo~ these market rate units could
house 18% of this market segment. Figure 19 on the following page prments market pon~afion
rates based on income levels for ea~ of the Metro Area quadrants.
18.0%
16.0%
14.0%
12.0%
10.0%
S
6.0%
4.0%
0.0%
lqgare 18
8enlor Housing Mirkot Poustrltton Rates
TCMA, 2002
SENIOR HOUSING UPDATE 2003
FIGURE 19
SENIOR HOUSING MARKET PENETRATION RATES
TWIN CITIES METRO AREA
2O02
Conclusions. At present, the Twin Cities Metro Area's senior housing market remains strong
and pent-up demand still exists for additional senior homing product, particularly, for affordable
and independent senior housing. Demand over the next two decades will be particularly strong
for ownership products such as cooperative, condominiums and townhomes which are geared
towards the active, independent lifestyles of recent retirees. While demand for more service-
intensive senior housing may not see the same growth potential, life expectancies and seniors'
incomes are increasing and greater awareness and acceptance of these homing options should
equate to higher capture rates. Furthermore, the loading edge of the baby boom will begin enter
their mid-70s shortly after 2020 and thus, additional Assisted Living and Memory Care housing
will continue to be needed as the population continues to age and as the public becomes more
familiar with these concepts and aware of their benefits.
Most sub-markets will have high growth potential with increasing numbers of senior households.
High occupancy rates and rapid absorption in independent housing indicates pent-up demand
exists in nearly all markets with the potential to develop additional product throughout the Metro
Area. While some submarkets could experience saturation in Assisted Living product over the
short-term, we believe this will likely be temporary, as tho demand for Assisted Living should
continue to grow as the population ages. Assisted Living housing should remain strong in
SENIOR HOUSING UPDATE 2003
developments where a continuum of cam e0dsts and as tho independent com.nonmts feed into the
more service-intensive comp. on~ts. Also, the incroasingly co .m!~titivo maxtetwill likely crealo
a need to updaIe older developmmts in response to the markets changing needs and preferences.
The greatest potential over the next two decades will be for developments, lhat cater to the active
lifestyles of aging baby boomers. New construction should satisfy much of the demand, but
potential also exists to convert other homing devolopmems to senior housing az the population
ages. Older renlal or condominium buildinss with a majority of studio and one-bedroom units
may be roco~gtn~ to have larger one-bedroom or two-bedroom units and/or may need to
reposition themselves by adding services to meet the needs of residents as they age in place.
Also, the market for moderaIely-priced senior housing is substantial, particularly for core city
neighborhoods as well as for Affordable product that would offer support and personal care
services.
It is important to note that si~vnificant demand remains in the two core dries as well as the
suburbs. In fact, the two communities have, by far, lower market.penetration raies.flum the
suburban submark~. Tho lack of senior housing developmmt in the Metro Area's core Cities
has ~cpedited the decline~ in their senior base. Figures 20 and 21 present recent lrezats relating
to senior population and household growth trends in the Twin Cities Metro Area.
FIGUR~ 2O
TOP 15 METRO AREA CO~ BY SENIOR POPULATION
Rnk CIO/, 1990 1000 ii %
1 Minne. a~li~ 47,718 34,878 -12,840 -27%
2 St. Paul 37,412 29,647 -7,765 -21%
3 Bloomin~on 8,882 13,358 4,476 50%
4 F_xlins 9,386 10,765 1,379 15%
5 Minnetsmk~ 4,761 7,165 2,404 50%
6 Roseville 5,629 6,828 1,199 21%
7 St. Louis Park 7,068 6,478 -590 -8%
8 Ridfl--mld 6,052 5,633 -419 -7%
9 Mapl~ 3,680 5,257 1,577 43%
10 Plymouth 2,543 4,987 2,~.'!Y. 96%
11 Brooklyn Center 3,546 4,507 961 27%
12 Coon Rapids 2,463 4,496 2,033 83%
13 Burnsville 1,981 4,358 2,377 120%
14 Golden ValI~ '3,472 3,978 506 15%
15 Brooklyn Park 1,873 3,785 1,912 102%
SENIOR HOUSING UPDATE 2005
Figure 21
Senior (Age 65+) Household Change
Twin Cities Metro Area
1990 to 2000
'i-