9.1 HRSR 05-01-2017 - Laserfiche WebLink

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HOUSING DEMAND ANALYSIS Demand Estimate for Assisted Living Housing Table HD -7 presents our demand calculations for assisted living senior housing in Elk River in 2015 and 2020. This analysis focuses on the potential private pay /market rate demand for assisted living units. The availability of more intensive support services such as meals, housekeeping and personal care at assisted living facilities usually attracts older, frailer seniors. According to the 2009 Overview of Assisted Living (which is a collaborative research project by the American Association of Homes and Services for the Aging, the American Seniors Housing Association, National Center for Assisted Living, and National Investment Center for the Seniors Housing and Care Industry), the average age of residents in freestanding assisted living facilities was 87 years in 2008. Hence, the age - qualified market for assisted living is defined as seniors ages 75 and over, as we estimate that of the half of demand from seniors under age 87, almost all would be from seniors over age 75. In 2010, there were 1,024 seniors age 75 and older in the PMA. Demand for assisted living housing is need - driven, which reduces the qualified market to only the portion of seniors who need assistance. According to a study completed by the U. S. Census Bureau (2008 panels of the Survey of Income and Program Participation (SIPP) files), 30% of seniors needed assistance with everyday activities (from 25.5% of 75- to- 79- year -olds, to 33.6% of 80- to- 84- year -olds and 51.6% of 85+ year olds). Applying these percentages to the senior population yields a potential assisted living market of 370 seniors in the PIMA. Due to the supportive nature of assisted living housing, most daily essentials are included in monthly rental fees, which allow seniors to spend a higher proportion of their incomes on housing with basic services. Therefore, the second step in determining the potential demand for assisted living housing in the PMA is to identify the income - qualified market based on a senior's ability to pay the monthly rent. We consider seniors in households with incomes of $40,000 or greater to be income - qualified for assisted living senior housing in the PMA. Households with incomes of $40,000 could afford monthly assisted living fees of $3,000 by allocating 90% of their income toward the fees. According to the 2009 Overview of Assisted Living, the average arrival income of assisted living residents in 2008 was $27,260, while the average annual assisted living fee was $37,281 ($3,107 /month). This data highlights that seniors are spending down assets to live in assisted living and avoid institutional care. Thus, in addition to households with incomes of $40,000 or greater, there is a substantial base of senior households with lower incomes who income - qualify based on assets —their homes, in particular. Sixty -three percent of the age 75+ households in the PMA are homeowners, and the 2015 year - to -date median resale price of homes in the PMA was $209,975. Seniors selling their homes for the median resale price would generate about $197,367 in proceeds after selling costs. With an average monthly fee of $3,000, these proceeds would last just over five years in an assisted living facility, which is longer than the average length of stay in an assisted living facility (27 MAXFIELD RESEARCH & CONSULTING, LLC 92