Posts Tagged ‘Studio Apartment’

News from Central Alberta

Monday, March 22nd, 2010

I’ve been in Red Deer this week.  We haven’t actually looked at the data yet, but we have heard that the level of affluence along Highway 2 between Calgary and Edmonton is unequalled outside the oil sheikdoms of the Middle East. We’ll see what the numbers say, but the communities do indeed look prosperous. As I said to our client: “Even the trailer parks look attractive”. Not that I have anything against trailer parks of course.

The Red Deer seniors’ market is oversupplied, a situation likely to last for some time. Part of the oversupply is attributable to two large Masterpiece projects in the southeast corner of town, right across the street from each other. There may be some merit in the auto mall approach to seniors’ housing, but it didn’t work in Red Deer. Perhaps that is one of the reasons Masterpiece is now in the hands of its lenders. The Holiday project in town, Victoria Gardens, also has a number of vacancies. Many in the industry, including Lumina, believe that the Holiday model—large numbers of studios, vast dining rooms, major meal at noon—is too old-fashioned to survive much longer. That is in terms of new projects of course. There are something like 300 existing projects in the US and 35 in Canada. My tour guide told me that Holiday is keen to expand to Australia and Europe. Every time I walk into a Holiday project I get a severe case of déjà vu, but of course none of their residents has probably been in more than one—the one they live in—and even if they did know they lived in a cookie cutter, they probably wouldn’t care.

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Studio Units in Senior Housing Projects

Monday, March 8th, 2010

Much like the human appendix, studio units, or bachelor units if you prefer, are in evolutionary decline. People don’t like them. Many owners of buildings with unrentable studio units are knocking down walls and joining units together. Even studio units that are subsidized or that have very low rents may be hard to fill. We worked for a client once who was convinced that studio units were the way of the future because of their sustainability, by which he meant that 100 people would take up less land if they were living in 400 square foot units than if they were living in 600 square foot units. That is unquestionably true. There is a whole movement afoot now to convince people to reduce their demands on the planet by living in smaller houses. It is rare to go a month without reading some aging boomer’s lament about the 900 square foot one bathroom house she grew up in and why can’t people today do the same? I grew up in a house like that, maybe a little bigger but only one bathroom for two parents and four children. Today I live in a 3,700 square foot house and politically correct or not, I love it.

On a smaller scale, literally and figuratively, that is what is happening to studio units. I kept telling our studio-fixated client that he was dead wrong but he was stubborn and convinced his own instincts were right—he was a developer, did I mention that? But he wasn’t a stupid developer because he was willing to test his ideas with consumers. It was a complicated issue to explore but eventually we designed a questionnaire that looked like this:

“If sizes and rents were as follows (note this was a few years ago):

Studio, 400 square feet:                      $1,500

One bedroom, 550 square feet:           $1,900

Two bedroom: 750 square feet           $2,300

Which unit would you choose (please check one):

Studio             _____

One Bedroom             _____

Two Bedroom _____

If you checked One Bedroom, at what point would you choose a studio instead (please check one):

If the studio were $400 cheaper         _______

If the studio were $500 cheaper         _______

If the studio were $600 cheaper         _______

If the studio were $700 cheaper         ______

It wouldn’t matter, I would still want a one bedroom unit    ______

No matter what the rent differential was, the majority of survey respondents still preferred a one bedroom unit. This didn’t surprise me but it did surprise the developer. He did not proceed with his plans, although he has never thanked me for saving him millions of dollars.

The dislike of studios is not so much a matter of space per se. There are very large studios and very small one bedroom units and still people prefer units with bedrooms. It could be a gender issue, at least partly. Somewhere around 75 or 80% of the residents of supportive housing projects are women. It is said (by who I am not sure) that women of a certain age apparently don’t like to entertain visitors in their bedrooms, which is essentially what a studio apartment is, and furthermore they don’t like to run the risk of someone coming to visit them when their bed is unmade, which would be instantly obvious if they were living in a studio unit. The fact that very few people in seniors’ housing projects visit in each other’s units is immaterial to this debate. Men on the other hand are assumed to care not at all about visitors or unmade beds. If, magically, the existing gender ratio could be  reversed, studios might become wildly popular, especially as they are unquestionably cheaper. And while we are on the subject of beds, it is not that unusual to run across people with no beds as in people who sleep in their recliners. By all accounts it is very comfortable especially if it is difficult for people to lie down for some reason.

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