Posts Tagged ‘Housing Market’

What’s the Housing Market Going to Do?

Friday, September 3rd, 2010

Over the last couple of years, slumping housing markets in Canada and the US have most definitely affected occupancy levels in seniors’ housing projects.  We have posted about this issue before. One of my concerns has always been that even after housing markets recover it will take older people even longer to forget the reversals experienced in the market. To use some technical jargon, they may well be spooked and continue to delay taking any kind of action on moving to more supportive environments.

Housing markets in the US looked a bit more robust for a while, but the expiration of special incentive programs has resulted in more gloom. New home sales in the US recently hit a 40 year low while sales of existing houses hit a 15 year low. That is not good news for the seniors housing industry. Past posts have discussed the very close correlation between the state of the housing market and occupancy levels in seniors housing projects.

In Canada, the housing market has also definitely slowed down, although we are light years away from the debacle in the US. Nevertheless, the roller coaster-like movements in Canadian housing markets over the last couple of years will not be comforting to seniors contemplating a move.

What’s going to happen over the next 6-12 months? Who knows, but I always think back to the last significant “adjustment” in BC housing markets. It seems like a very long time ago, but the last half of the 90s was a very slow period in terms of starts, sales, and prices.

Players in the industry would be well-advised to factor a relatively long-lasting “relaxation” in provincial housing markets into their business plans.

Tags: , , , ,
Posted in Future, Market Studies, Seniors' Housing | No Comments »

Why it Would be Wonderful to be a Seniors’ Housing Market Analyst in the USA

Wednesday, September 1st, 2010

I have made this point before several times (about the vastly superior information on the US seniors housing industry) but I was struck anew by the disparities between our two countries earlier this week. The wonderful National Investment Center is celebrating its 20th anniversary. It also has a new Research Director. In a recent newsletter, the Research Director talked about some of the directions he wants to pursue over the next few years. Here are some of the things he said:

Given the ever-increasing interest in our sector, we’re working to stay ahead of the curve, so to speak, by anticipating the research needs of our industry’s participants and prospective participants. Therefore, our top research priority remains the product enhancements associated with NIC MAP. That includes not only a forthcoming tool for portfolio benchmarking but also thereafter reports providing local trends analyses. In addition, NIC MAP reports soon will incorporate detailed sales transactions metrics, and we look forward to regularly reporting market effective rents, which incorporate any leasing promotional discounts. Later this year, in our ongoing effort to disseminate insightful and timely industry research, we’ll publish the inaugural edition of the NIC Investment Guide 2010 that will serve as a primer on our property sector and has been proclaimed by a number of the draft document’s reviewers as an unprecedented comprehensive overview of our industry.

[NIC Map is a quarterly data and analysis service that collects and disseminates a broad range of information on the seniors housing industry in the top 100 metro areas in the US.]

From a Canadian perspective, that is just an incredible goal. We are so far behind the curve we have no idea if it even exists or if we are in danger of driving off the road.

Here’s what I mean. Over the last few weeks it has become apparent that one of the sub-regional markets we track in the metro Vancouver area is very soft—much softer than any of the operators will admit to and much softer than the CMHC Seniors’ Housing Report indicates. The CMHC report indicates that the vacancy rate in this area is well under 10%. Legitimate people (ie real people, not mystery shoppers) seeking accommodation in this area have been led to believe that there are very few vacant units available and that anyone wanting a unit needs to act fast. If we were mystery shopping the area we would be told the same thing, although we are a lot more sceptical about what marketing people tell us.  We look for other signs confirming the official story but often it is very hard to tell what the true vacancy situation is.

Rather disconcertingly, reliable information indicates a vacancy rate in this area that is approaching 20%. I can understand the motivation of the marketers: telling people you have a vacancy rate of 15% can be discouraging to prospective residents.

But the enormous difficulty of trying to truly understand the market means the signals to operators, developers, lenders, and analysts are confusing or contradictory or both. Not to mentions disingenuous to the consumer.

Tags: , , , , , , ,
Posted in Market Studies, Marketing, News, Seniors' Housing | No Comments »

Life Lease Legislation

Tuesday, August 24th, 2010

I was working on something to do with life lease the other day and googled an article by an Ontario lawyer named John Clark. The article is called Life Lease Residential Housing: Is it Time for Legislation? So far Manitoba is the only province that has enacted legislation dealing with life leases, although other provinces have thought about it and two (BC and Ontario) have had a public consultation processes. Nothing happened in either province as a result of the consultation and it seems unlikely that anything will, at least for the foreseeable future.

The conclusion of the Clark article is that yes, legislation would be a good thing, notwithstanding the concern of many in the industry that legislation might be too restrictive—might harm the innovative and flexible approach to life leases that is now the operational context. And in fact I have talked to knowledgeable people in Manitoba who say that that is exactly what happened in that province—innovation and creativity were stifled as a result of the legislation.

Mr. Clark supports legislation for the consumer protection elements it would presumably provide, specifically in relation to the safety of purchaser deposits, financial and management disclosure, construction insurance, the freedom to register a life lease interest at land titles, and the freedom to sublet.

In BC, these consumer protection mechanisms already exist, not through specific life lease legislation but through the Real Estate Development Marketing Act.

Mr. Clark also muses that perhaps life lease development ought to be restricted to the not-for-profit sector and that governments might want to think about assisting the life lease development process in some way—via loan guarantees and incentives for developers and residents for example—because that would be a relatively inexpensive way for governments to contribute to the development of affordable housing.

In all provinces, except Alberta, life lease has evolved as a creature of the not-for-profit sector. There are very few for-profit life leases, mostly because for-profit developers prefer to get in and out as fast as possible. For-profit life leases operate primarily in the service-enriched market.

We will be posting more about life leases in the weeks to come. It is a particular passion of Lumina’s.

Tags: , , , , , , ,
Posted in Future, Life Lease, Seniors' Housing | No Comments »

Sun City Arizona is 50 Years Old

Friday, August 20th, 2010

That seems almost impossible to believe.  Not so much its age per se, but the fact that it was built when the median age in the US was 29.5 and the oldest baby boomer was 14. Today the median age is 36.7 and the oldest boomer is 64. Del Webb died in 1974. I don’t know if anyone has written a biography of him but it would certainly be interesting to ask him how he came up with the vision of enormous retirement communities when the US was comparatively so youthful. Wikipedia notes his many accomplishments, but doesn’t touch on this subject. The entry does note though that on opening day, 100,000 people came to check out Sun City–so many that Del Webb had to survey the scene via helicopter.

In 2010, more than 40,000 people, 98% of them white, live in Sun City, which contains seven recreation centres,  eight golf courses, three country clubs, two bowling centres, an amphitheatre and a lake—the largest concentration of year-round recreational facilities in the United States. According to the 2000 census, 80% of the population of Sun City was over the age of 65. The median age is 75, twice the national median of 36.7.

These are staggering statistics. The oldest mid-sized urban area in Canada is Parksville, BC, on the eastern coast of Vancouver Island. Compared to Sun City, Parksville is positively youthful—only 34% of the population is over 65. Perhaps because of this comparative youthfulness, not many developers of golf course communities have been drawn to the Parksville area, notwithstanding its assumed appeal for retirees and seniors. The closest golf course community is Fairwinds, which offers “1,350 acres of living” consisting of one golf course, one marina, a community centre and 400 residential units. Arbutus Ridge is further south and a little bigger, with 600 residential units. The 830-acre Crown Isle Resort is an hour north of Fairwinds. And that’s basically it for active-adult type of communities in what is usually considered the epicentre of retirement living in Canada.

I wonder what Del Webb would make of that.

Tags: , , , , , , , , , , , , ,
Posted in Future, Marketing, Seniors' Housing | No Comments »

Help Required: Title for Book on Seniors’ Housing

Saturday, August 7th, 2010

As regular readings of this blog know, I am writing a book that will be published shortly (meaning in the next couple of months). It is currently titled The Future of Seniors’ Housing: Planning, Building and Operating Successful Seniors’ Housing Projects.

That is quite a dull title I admit. A book designer suggested I come up with a more exciting title and use the existing title as a sub-title. That is a great idea but the problem is I can’t think of a catchier title. If it were 2005 and not 2010 Silver Tsunami would be perfect but unfortunately about a million other people have used that phrase over the last several years. I tried a few variations on the golden theme but lots of people think “golden” should not be used in any context dealing with people over the age of 55. My personal favourite on the golden front is nursing homes that are called “Golden Door”. I think that’s hilarious although I probably wouldn’t be quite so amused if I were about to move into a Golden Door Nursing Home. You would have to work hard to avoid the implications.

And speaking of nursing homes I visited a friend of my mother’s yesterday who recently moved into a nursing home on account of a very weak heart. His heart may be weak but his sense of humour certainly isn’t. The monthly activity calendar on his wall listed “zucchini races” every Wednesday morning at 10:30. “What”, I asked, “are zucchini races?” Without missing a beat he said”I don’t know but it doesn’t matter anyway because I don’t think my zucchini is up to it.”

I am still chuckling about that. However the point of this post is not to share witticisms but to ask for your help in coming up with a catchy title for my book. If I use your idea I will certainly acknowledge your help in the book. Please try to avoid any metallic references.

Tags: , , , ,
Posted in Future, Marketing, News, Seniors' Housing | No Comments »

More Interesting Stuff from the Census We Will Never Know Again

Tuesday, August 3rd, 2010

As I have said before numerous times in this blog I believe that the changes the federal government is making to the 2011 Canadian Census by removing the mandatory long form are completely boneheaded. Here is another example of data that will no longer be available:

In Richmond, a suburb of Metro Vancouver, 40% of the 65+ households live in a condo. In New Westminster, another suburb, 61% do. Is that because it’s easier for seniors in New West to downsize? Proportionately, there are twice as many apartments in New West than there are in Richmond (another long form fact) so that’s one possible explanation. Another possible explanation could be that seniors in New West have lower incomes than seniors in Richmond and can’t afford to live in single detached houses. Here’s how that hypothesis pans out: the average income of 65+ households in Richmond is $52,385; in New West, $47,010. So that’s another possible explanation. Or perhaps 65+ households in New West are smaller and don’t need the space of a single detached house. And the facts? 57% of 65+ households in New West are non-family households, meaning most will be single person households. The comparable figure in Richmond is 38%.

Well who cares says Stephen Harper, Tony Clement, and the Fraser Institute.

Communities that want to become elder-friendly care. They need to understand the housing situation of people living in their communities now, as well as how the community can accommodate people who might move there in the future.

For-profit and not-for-profit developers of seniors’ housing care too. Spend $20 million on a housing project without understanding the market? Not wise. Hold on a minute though say SH, TC, and the FI, if they need that information they can darn well go and get it themselves. But they can’t—they won’t be able to replicate the comprehensiveness or the reliability of census data, even if they spend huge sums of money trying to do so.

Many people and companies of all sorts in the seniors’ housing and health care industry will be hobbled by the absence of the long form. The whole situation is, as I have said on earlier occasions, very sad.

If only more people read this blog! A Canadian Press story appearing on August 2nd opines that the Tories believe not enough people really care about the census and the whole thing will blow over. I hope that is not true.

Tags: , , , , , ,
Posted in Future, Market Studies, News, Seniors' Housing | No Comments »

My Book: A Few Steps Closer to Publication

Monday, July 26th, 2010

I have posted a couple of times about my forthcoming book currently titled The Future of Seniors Housing: Planning, Building, and Operating Successful Seniors Housing Projects. The original goal was to publish mid-year but now it’s looking more like fall. However great progress has been made over the last few months and I am feeling much less anxious than I have for a long time. There are now seven chapters in the book plus the introduction.

I have said many times that the book has practically killed me and that if I had known yada yada yada. I don’t know if that is entirely true though. I might have written it even if I had fully realized how much work it would be.  Because, as all of you who read this blog know, seniors housing is an endlessly fascinating field. It is such a cliché to describe things as labours of love, but that’s how things get to be clichés in the first place—because they are true!

So, coming soon!

Tags: , , , , , ,
Posted in News, Senior Housing, Seniors' Housing | No Comments »

Sarah Palin School of Public Policy: Stephen Harper, Tony Clement and the 2011 Census

Thursday, July 22nd, 2010

The furor over the 2011 Census reminds me of Sarah Palin claiming she understood international relations because she could see Russia from her front door. That is how all of us will have to operate in the future—without benefit of actual facts guiding our decisions.

I have noted in past posts how we rely on data from the long form to analyze seniors’ housing markets, including data on income and housing. I haven’t noted though how often we rely on mobility data to understand demographic patterns affecting markets and communities. Data from the long form tells us how many people of various age groups lived at the same address five years earlier, how many lived in another community in the same province, and how many lived in another province.

Well that is just downright intrusive, Tony Clement and Stephen Harper would no doubt say. But of course it isn’t intrusive and the data helps us to avoid mistakes. In my forthcoming book I mention the case of a former client of ours who was planning to build a big seniors’ housing project in the interior of British Columba. He was sure that people from all over Canada would flock to the community, partly because his site was in BC, an assumed magnet for seniors, and partly because it was a good site, right behind the Tim Horton’s. We were able to show him, based on long form data, that his assumption was mistaken and that the prospects for his site were not good.

Normally it is a delicate matter to tell someone that their plan isn’t a sound one but this client was far from perturbed. “You have saved me millions of dollars”, he said, and that is true.

The lack of long form data in so many areas of the Canadian economy and Canadian society is going to be an extremely costly, as well as a futile, exercise.

Tags: , , , , , , , , , ,
Posted in Future, Marketing, Seniors' Housing | No Comments »

Seniors’ Housing Projects: Location, Location, Location–How Important is it Really?

Thursday, July 15th, 2010

Conventional wisdom suggests that for supportive seniors’ housing projects (meals, housekeeping, laundry etc), walking-distance proximity to stores and services is, if not essential, then at the very least extremely important. But without sitting down and doing the math, I would say that a minority of supportive seniors’ housing projects in BC are located close enough to stores and services so that people could easily walk to them. Some are in locations that are downright pastoral. Of course walking isn’t necessary for all people—many have scooters that enlarge their geographic boundaries. Scooters though are used by a small minority of seniors, meaning that walking distance is more important than scooter distance.

As well, many seniors’ housing projects have their own buses to take people around to shopping and doctors’ appointments, many have small tuck shops that sell various items, and in any case, most meals are provided on site. So why do people need to walk anywhere? I firmly believe that the answer to that question is this: even if people don’t have to walk anywhere, the fact that they could if they wanted to is an important psychological benefit. And for those people who actually do walk to the store or the bank, it’s more than just a psychological benefit—it’s a physical benefit as well.

Proximity to green space seems to be less important than proximity to stores and services. It’s always nice to have a park to walk through but half the time the weather may preclude the walk. But proximity to schools and other places where children play is almost always considered a decided advantage because it gives people something highly enjoyable to watch. Proximity to seniors’ centres is hugely advantageous, not just because it allows residents to participate in outside events and activities, but because it facilitates two-way interaction. It’s easy to invite people living in the community and using the seniors’ centre to come for meals and events at the housing project, which is one of the very best ways of keeping buildings full.  Easy access to public transportation falls into the “it goes without saying” category, whether or not people living in supportive housing projects ever actually take a city bus. Visitors might though and staff almost certainly will.

Of course finding sites that are close to stores, services, schools, public transit, and seniors’ centres is much easier said than done. When “affordably priced” is added to the list, finding a suitable site begins to verge on the miraculous, especially in centres where land is expensive.

Tags: , , , , , , , , , , ,
Posted in Seniors' Housing | No Comments »

2011 Census (Reprise)

Wednesday, July 14th, 2010

As the government is still persisting in its wrong-headed plans to ruin the 2011 Census, I thought it would be useful to explain in a little more depth why the Census information is so critical for seniors’ housing analysis.

Here is an example of a table we always use when we are doing a market study or a community housing needs assessment.  Here are just a few of the things this table tells us:

  • 83% of the 55+ households in this community are homeowners.
  • The average income of the renters is $38,509 compared to $73,094 for the owners.
  • Single (non-family) renters over the age of 85 have the lowest average incomes.
  • Although not shown in the table, the detailed data indicate that there are 565 renter households aged 65+ in this community with an income lower than $14,999. These are the households facing serious challenges in terms of meeting their housing needs.

Owners

Renters

Family Hshlds

Non-Family

Family Hshlds

Non-Family

Total

Avg Inc

Total

Avg Inc

Total

Avg Inc

Total

Avg Inc

55-64

4,880

$101,729

1,030

$47,153

600

$61,629

510

$30,613

65-74

2,450

$67,633

815

$36,961

220

$41,969

405

$28,178

75-84

1,140

$63,158

1,030

$32,375

125

$35,366

265

$26,375

85+

200

$50,621

255

$24,358

60

$47,584

235

$24,220

Sadly, we will never have this level of knowledge about seniors’ housing markets in future years because all of this information comes from the long form.

For-profit and not-for-profit developers, communities, governments, market analysts—we will all be forced to guess what is going on. Tragic.

Tags: , , , , , , , , , ,
Posted in Future, Market Studies, News, Senior Housing, Seniors' Housing | No Comments »