Seniors Housing Business

FEB-MAR 2018

Seniors Housing Business is the magazine that helps you navigate the evolution of the seniors housing industry.

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Page 40 of 56

40 Seniors Housing Business n February-March 2018 By Lynn Peisner The seniors housing industry is under pres- sure to solve the problem of a lack of options for America's aging middle class. But no one has developed a proven model just yet. "This is an important topic, and one that we're going to be challenged with for at least the next couple of decades," says Dana Wollschlager, principal and senior living prac- tice leader at consulting firm Plante Moran Liv- ing Forward. "There is no silver bullet." Wollschlager's comments came during a recent panel session addressing the affordabil- ity issue at InterFace Seniors Housing South- east in Atlanta. Even retirees with a modest amount of sav- ings are concerned about their ability to afford seniors housing, according to Wollschlager, who can speak with authority on the anxiety seniors feel. Her 71-year-old mother, a widow, is on a fixed income. "She is that Baby Boomer who has too much money to qualify for an affordable low-income housing tax credit (LIHTC) community at 60 percent of area median income, but who doesn't have enough to put $500,000 down to move into a CCRC (continuing care retirement community)," explained Wollschlager. Wollschlager's mother paints a picture of how tomorrow's demand will look. Today, seniors will pay an average of $3,025 per month for independent living and $4,454 for assisted living, according to Plante Moran. Many Baby Boomers won't be able to afford seniors hous- ing unless costs go down. According to BlackRock, a New York-based global investment firm, the average Baby Boomer is planning on a yearly retirement income of $45,000. Middle-income can be defined as an annual income of $36,000 to $60,000, with home equity between $150,000 and $400,000 and an average of $250,000 in savings. "We are working backward," says Mark Lan- dreville, executive vice president of Blooming- ton, Minn.-based HJ Sims. "We're looking at how much money a person has in retirement, in their homes and with Social Security to find out what we can show for monthly income. So if people can expect to spend 50 percent of their monthly income on housing, what is that num- ber? What is the shortfall between that number and what's available today, and how will we make that up the difference?" "The need for moderately priced living solu- tions is just starting to get attention," he adds. "I don't think people have given it a lot of thought. It's a conversation we're just starting to have." How do we fix it? Stakeholders in the industry are talking about several potential changes to the way seniors housing is currently developed and operated. These changes could result in a housing product that is more affordable in the future. The ideal model would require new stan- Affordability Is Urgent Matter n Development With today's seniors housing prices too high for tomorrow's residents, the industry is searching for answers to ease the burden. Gardant Management Solutions opened Belvedere Seniors Housing in Merrillville, Ind., in summer 2017. The three-story building features 126 one-bedroom apartments with some services that serve low-income seniors. The Community Builders Inc. (TCB), a nonprofit developer of mixed-income housing, recently opened Hillcrest Residences, a 66-unit seniors housing community in Pittsburgh's Carrick neighborhood.

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