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October 2007 issue
Cohousing: Another Option for
Seniors--
Seniors Built ElderSpirit Community To Support Each Other
Intergenerational cohousing — small communities created with the active
involvement of future residents — have been around for awhile. Now, senior
cohousing projects are emerging — ElderSpirit Community in Appalachia, for
example — and, according to Charles Durrett, the “father of cohousing” in
the United States, senior cohousing is the growth area.
...
Making
CCRC Projects ‘Affordable’--
Jewish Home Of San Francisco Gets Creative In Palo Alto
How do we define “affordable” nowadays? When facing the challenge of making
a CCRC attractive and competitive in the market yet still affordable to the
seniors in the community, the Jewish Home of San Francisco got creative. It
broke out components of its Palo Alto project to reduce entrance fees.
...
Q&A With Bill Sims and Matt O’Grady
William J. Sims and Matthew T.
O’Grady of Herbert J. Sims & Co. talk about how 2007 is unfolding with
regard to senior housing financing.
...
Recent Refinancings
... and a New Project
We detail a few deals that closed
in recent weeks.
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Senior Living
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Companies Mentioned in this issue:
October 2007
899 Charleston p7
A
A.G. Edwards p3
B
Bethany Lutheran Village p3
C
Cain Brothers p1
Casa Edad de Oro p3
Casa Otonol Housing Corporation p3
E
ElderSpirit Community p1
F
Franklin United Methodist Community p3
G
Graceworks Lutheran Services p3
H
Herbert J. Sims & Co. p2
HomeTowne at Matador Ranch p3
J
Jewish Community Center p6
Jewish Home of San Francisco p6
L
Lancaster Pollard p3
Love Funding p3
N
New Life Management & Development p7
O
Oshman Family Jewish Community Center p7
R
Red Capital Markets p3
S
St. Andrew’s Resources for Seniors p3
Stanford Medical School and Hospital p7
Summerfield Plaza Apartments p3
T
Taube-Koret Campus for Jewish Life p7
The Cohousing Company p4
V
Village on the Isle p3
W
Westchester Villages p3
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Cohousing: Another Option for
Seniors--
Seniors Built ElderSpirit Community
to Support Each Other
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article to a friend
Email Editor
When Dene Peterson, a former Roman Catholic nun, was looking for somewhere
to retire, she couldn’t find exactly what she wanted. “So I decided to
make it myself,” she says. “In 1997, a bunch of my friends [three other
former Glenmary sisters] and I started with the really simple idea of
being able to die at home, among people we knew, and taking care of each
other.” The group fleshed out the idea and came up with a vision for what
eventually became the ElderSpirit Community — a 29-unit cohousing
community in Appalachia.
Cohousing communities are defined as small-scale neighborhoods that are
created with the active involvement of future residents who continue to
work closely together after moving in. Individual homes are privately
owned or rented. Residents share the land and amenities such as a common
house, where they get together socially, participate in activities, and
share some meals, work areas, and guest accommodations.
In 1999, ElderSpirit purchased 3.7 acres in Abington, Virginia. Town
officials allowed the project to be registered as a Planned Unit
Development so the design wouldn’t be limited by government restrictions
affecting subdivisions. Ultimately, the $3.5 million ElderSpirit project
had 10 different sources of funding, including $1.4 million from the sale
of homes. Occupancy in ElderSpirit Community began in spring 2005.
An Idea Imported from Denmark
Architect Charles Durrett is credited with introducing cohousing to the
United States in the first book that he and his architect wife and
partner, Kathryn McCamant, wrote on the subject in 1988. Durrett grew up
in Downieville, California, a tiny community of about 300 people. When
McCamant took him “kicking and screaming” to live in San Francisco,
Durrett missed the sense of community in his small hometown. “That’s when
I decided to create a housing arrangement very similar to the one where I
grew up,” he says.
The first cohousing community was built in Denmark in 1972 and originally
designed to make life easier, more practical, and more economical for
families. “The Danes would say that they didn’t do anything new,” Durrett
says. “They just created consciously what used to be more natural.” Senior
cohousing came on the scene in Denmark in 1985; in fact, the last 20 out
of 25 cohousing projects built in Denmark have been for seniors.
As principals of The Cohousing Company, an architectural firm that
facilitates the development of cohousing, McCamant and Durrett have
finished three senior cohousing projects in the United States, with
another half-dozen on the drawing board. Durrett expects the big growth
market in the United States will also be for seniors, as explained in his
most recent book: Senior Cohousing, A Community Approach to Independent
Living (Habitat Press/Ten Speed Press, 2005).
Durrett and his wife currently live in (and work out of) a 34-unit
cohousing community in Nevada City, California, which has 22 seniors and
37 kids. “It’s a very connected experience,” he says.
Making long-lasting connections
Cohousing communities are tailored to bring interested people together in
a stimulating, supportive environment. Prospective residents play a
central role in the organization, marketing, and design of the effort —
and, once complete, in actually running the community. “In the course of
those efforts, people become very close to each other” says Durrett. “Our
goal is to create a functioning community before the people actually move
in.”
Durrett has also completed 37 cohousing projects for folks who weren’t
part of an existing coherent community. “Whether intergenerational or only
for seniors,” he says, “cohousing communities are for people who may not
have been connected before but, you could argue, will have a higher
quality of life once they are connected.”
Along those lines, ElderSpirit’s Peterson recommends having both an
architect for construction and an architect for community. “You must build
both simultaneously,” she says. “Creating a common bond before residents
move in makes a huge difference in the community’s success.” At
ElderSpirit, for example, the connection is spirituality.
Financing cohousing communities
Financing for cohousing developments is usually easier than for other
types of projects, because bankers like nothing better than pre-sold
units. “In September 2007, we started a $12 million project for seniors in
Fresno, California,” says Durrett. “We had 21 of the 28 houses sold prior
to going to the bank and about $1 million in equity, including workshop
fees, home-sale deposits, and additional monies from other investors. As a
result, the bank gave us a $9.25 million loan almost immediately.”
The financing for all Durrett’s senior cohousing projects has all been
through regular bank loans. “We try to avoid government financing,” he
says, “because the average project receiving government grants takes seven
years. That isn’t very attractive to seniors.”
For ElderSpirit, Federation of Communities in Service, Inc. (FOCIS), a
not-for-profit group that has worked in Appalachia since 1967, is the
“parent group” that initially helped Peterson get a three-year planning
grant from Retirement Research Foundation, based in Chicago, prior to
forming a development corporation for the project.
Construction of the 29 homes (including 16 rental units) and common
buildings was financed primarily through bank loans. “We just put together
a number of sources that others have put together before and that are
available in every state,” says Peterson. “And we didn’t use tax credits
for our rental units, which is unusual.” They were financed through
low-interest loans from HUD and the Virginia Housing Development Authority
(VHDA). ElderSpirit also received an Affordable Housing Program (AHP)
grant from Federal Home Loan Bank of Atlanta and donations from
individuals and private foundations.
Elderspirit now has a second community underway, and FOCIS helped the
group win additional grants to facilitate the replication of the concept
in six locations in Florida, Kansas, Virginia, Illinois, and two in North
Carolina. According to FOCIS, some are contracting with established
developers, one is building upon a naturally occurring retirement
community, one is forming a housing cooperative to buy several
neighborhood homes where individuals will contribute either through rent
or owner equity, and another is exploring the formation of a trust to hold
the land in common and build owner-financed homes.
Buying into the community
Many cohousing groups focus on making the project affordable. When
ElderSpirit was beginning the development, building so residents could
live on a budget was one of the criteria. Now that it’s complete, each
household pays just $150 a month in common fees.
“We’re a mixed-income community,” says Peterson, “so we built 13
market-rate houses and 16 low-income rentals. And we were also careful to
sell only the footprint of land under each house. All the land around the
houses belongs to the community.”
The plan was to sell the two-bedroom houses for $112,300 and one-bedroom
houses for $90,200, but the project ran short of funds to complete the
construction of the interior of the common house. On their own, the new
owners agreed to add $10,000 to the cost of each house for that purpose.
And if that’s not a sense of community, what is?
The 16 rental units rent for $300 to $485 each per month, depending on the
size of the home. The renters must qualify for low-income housing; i.e.,
earn 60% of area median income. The rent monies (less $150 per household
per month contributed to the maintenance budget) are put toward repayment
of the bank loans.
Owned houses may be left to heirs or sold to anyone who qualifies —
namely, age 55 or older and willing to live the lifestyle of an
intentional community; but when sold, one-half of the appreciation reverts
to the community.
Managing operations
Once the cohousing developer is out of the picture, a housing association
owns and operates the public spaces, while residents manage the day-to-day
operations of the community. At ElderSpirit, the Owners Association is
incorporated, but the Residents Association, which receives and manages
the monthly common fees and makes community decisions, is unincorporated.
The Residents Association includes a landscape committee, a property
management committee, and an architectural review committee. “Those
activities also become ways to build community,” says Peterson.
“The idea that people are asked to give something back – what the
intergenerational folks call sweat equity and what we call community
service — makes it work. So everybody contributes in one way or another.”
Who moves in?
Perhaps the biggest misconception about senior cohousing is that it’s only
for healthy individuals. Rather, residents who become ill can remain at
home and get assistance from either their neighbors or hired help.
“At ElderSpirit, we hope — but don’t promise — that people will be able to
die at home,” notes Peterson. “So it’s independent living, but you don’t
have to move out just because you become dependent.”
Residents of a cohousing community expect and are willing to help when
their neighbors become dependent. People who need regular assistance,
however, can arrange for home health care and/or housekeeping services,
for which they pay individually. Of course, if a medical situation becomes
acute, the individual must go to an appropriate institution.
Most communities, in fact, do hire resident health aides to help people
with needs. In that case, the caregiver gets to know community residents
when they’re healthy, vibrant people, not just when they need care. That
also helps facilitate better care, according to Durrett.
Many people become involved in the senior cohousing style of independent
living when they’re around 55 and young enough to build relationships with
the people in the community. You can’t just walk into a situation and
expect your neighbors to take care of you!
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