Housing is essential to urban revitalization. This is particularly true for development in “challenge areas”—areas where projects are designed to challenge the status quo and lead to new patterns of use and livability. In recent years, senior affordable housing has played an increasing role in strategies for city shaping. Looking at some of the factors that contribute to success of affordable senior urban projects points to new opportunities for architects, planners, and developers interested in the rebirth of our cities.
Growing Demand
Considering the increasing population of 55+ people and the low rents in affordable senior developments, it’s no wonder that Sharon Christen of Mercy Housing Inc., which specializes in affordable housing, including urban housing developments, reports, “We never have problems finding tenants for our units.”
Bolstering the incentive of below market rents is a demand for walkable urban living. Christopher Leinberger, University of Michigan professor and partner of Arcadia Land Company, points out that people today have about a 50/50 preference split between what he terms the only two types of development: “drivable suburban” and “walkable urban.” With 85% of new buildings in the last 45 years having been of the drivable suburban type, there is a pent-up demand for new walkable urban housing. With transit access and nearby services, shopping, and amenities, transportation drops from a typical 25% of annual household expense down to 9% or less. With a significant number of 55+ people already living in urban settings seeking more affordable accommodations, while being comfortable and familiar with both the positives and negatives of city living, the size of the potential market becomes apparent.
Urban Activation
People engaged in shopping, walking, dining, and recreating activate urban areas. Activated areas feel safer, encouraging more activation—a positive cycle leading toward thriving and desirable neighborhoods. High density housing for active seniors can help jumpstart urban activation—but only with design approaches that engage their surrounding neighborhood.
There are many examples of high-density urban senior housing that has not been an agent in urban change. Consider, for example, Union Towers in Los Angeles. This 200-unit, 15 story building, designed by Maxwell Starkman & Associates 33 years ago, functions ably, but it has not acted to transform its surroundings. It is inwardly oriented and monolithic in character both visually and in relationship to its setting. While these characteristics make security simpler, disconnection from the neighborhood tends to lead to an island of isolated safety. Mercy Housing’s Christen points out that this project approach was typical in part because lenders, including HUD, had very narrow views of how projects should “look,” and mixing uses, incomes, or ages didn’t fit the “standard formulas and governing regulations.”
Safety is still priority one for successful urban senior housing
The tools used today by architects to create secure places to live for seniors extend beyond a secure project perimeter. Consideration of the exterior design character with “active glass” that provides eyes on the street is a starting point. Mixing of uses, ages, and income levels contributes to a diversity and energy that help high density projects engage their surroundings and challenge the status quo for the betterment of the community as a whole. Detailed review of sight lines for lobby staff, lighting, video monitoring that extends beyond the project boundary, and even planning for travel routes to destinations such as shopping are part of the program for security.
Parking and density
The density required by land values, transportation, and infrastructure in urban environments is always in conflict with the huge amount of space needed for private cars. With 400 square feet needed for every parked car, the costs add up quickly, whether it’s cheap-to-build, land consuming surface parking or expensive, structured parking. Active senior developments can be successful with very low parking ratios compared to other types of housing—beginning at 0.5 per unit and going down to near zero. Minimal parking coupled with the typically compact, one bedroom plans foster density that is consistent with smart growth, even in the lower massing that can help integrate with established neighborhood patterns.
“Penciling” the deal
Starting the process of “urban activation” can be a “chicken and egg” dilemma—the amenities that attract people can’t survive without the customers to support them, yet the customers won’t commit to living in a place without the amenities, conveniences, and most importantly a feeling of safety. Government subsidies are the traditional approach to breaking this logjam—reducing the risk for developers, which often include non-profits. Since the low rents of affordable projects will not support normal, cash flow-based pro formas, all these developments use a variety of subsidies, often including a grab bag of fund sources. In fact, the establishment of robust funding mechanisms like Affordable Housing Tax Credits may mean that affordable housing is the project type that may be the most feasible path for financing development in challenge areas.
Financing quirks
Tax Credits leverage a future relief from federal taxes into current cash. The credits are typically sold by specialized syndicators to large corporations. Current economic conditions, in which fewer corporations are making profits, have led to a reduction in the value of tax credits on the open market. At their peak, a dollar of tax credits could command up to 1.05 (accounting magic—a dollar sold for more than a dollar). At present, the value of a dollar of tax relief through sold credits is about 70 cents.
In California there are two “flavors” of tax credits, both administered by the State, the most desirable being “9% credits,” which are awarded based on a complex system of points that projects must win. Due to intense competition, almost all tax credit project submittals score “maximum base points,” so awards are effectively based on “tie breaker” scores. Sustainability features, serving special needs, tenant amenities, the development team, and local cash in the deal, all affect point scores. Developers who are successful tend to be specialists and include both large non-profits like Bridge Housing and Mercy Housing, as well as for-profit firms. To make the projects work, local government is invariably a partner—usually through housing/redevelopment agencies. Many times there are other public and public benefit entities involved, as well. Low cost is not the primary consideration, since tax credits are based on project cost; up to a point, investing more in quality can help a proposal be competitive. The process administered by the State through the Tax Credit Allocation Committee could push the envelope much further in months and years ahead, as there is great potential to encourage better design by granting points based on design quality. Since projects are committed to a 55 year or longer term of affordability, and cash flow returns are minimal, some teams help mitigate the risks of these ventures by taking on multiple roles—property management and even the contractor role, for example.
Maximizing the value of the public’s investment
In the hands of an urban planner, every building project has the potential to be a tool in city shaping. With many urban problems complex—often having roots going back decades—public investment in urban development ideally will try to get the biggest bang for the public’s bucks. It is not uncommon to have urban affordable senior projects go far beyond their housing mandate to address such disparate city needs as historic preservation, infrastructure upgrades, public services like libraries or fire protection improvement, and brownfield toxic site clean up. Revitalization of urban areas is inherently green and sustainable, as it makes use of infrastructure that was created decades ago.
Opportunities for architects
Affordable housing development sometimes begins in traditional ways—an RFP issued by a Redevelopment Agency for a parcel it controls, for example. In other cases, affordable housing projects arise from grass roots efforts launched at the community level. The motive force might be a church with surplus property, a toxic abandoned industrial site, or even an individual architect looking past urban blight and crystallizing a vision that might act as the nucleus for assembling a development team.
Author Michael F. Malinowski, AIA, is AIACC VP of Communications and Public Affairs, 2008 President of the AIACV, 2007 Chair of Sacramento’s Development Oversight Commission, and principal of thirty-year-old Applied Architecture Inc in Sacramento (www.appliedarchitecture.net). His work on Sacramento’s Globe Mills, formerly blighted and now a thriving mix of affordable senior housing and market rate lofts, was recently recognized with a 2009 AIACV Honor Award, the “2008 Award for Redevelopment Excellence” and the “2009 Award for Excellence in Residential Redevelopment.”
Originally published 2nd quarter 2009, in arcCA 09.2, “Design for Aging.”