In recent
posts, I’ve been writing about how walkable urban settings can be good places
to live one’s later years. Most
recently, I offered a few insights about senior lifestyles that
might find a home in downtowns.
It’s a
subject of both general and personal interest to me. I think having more seniors living downtown
will make our downtowns and our cities healthier. Also, I’m currently assisting a family member
in a search for a new senior living situation.
I’m disappointed that there aren’t more urban options for her to
consider.
Lastly, I
know that there is a time when my wife and I will need alternative
housing. By then, I’m hopeful that more urban
options will be open to us. In thinking
about my octogenarian self, I can conceive few prospects more pleasant than the
possibility of walking to a hardware store to complete a small household repair
or ambling to a bookstore to spend an hour browsing the options. (Yes, I’m confident that printed books will
still exist when I’m in my eighties.)
So, the topic
for today is how to facilitate more downtown senior living options.
The path to
more downtown senior living options is largely the same as the path to more downtown
living options for all demographic sections.
And regular readers know the litany of urbanism obstacles that I often
cite. Gasoline prices that don’t include
all environmental and geopolitical costs, so effectively subsidize life at the
urban fringe. Road maintenance costs
that aren’t distributed according to actual road usage. Construction liability law and mortgage
practices that make downtown development more difficult. And many more.
But rather
than returning to an abstract description of obstacles to urbanism, I’ll recount
an example of a failed senior living project with which I was quite familiar. To me, it provides a wealth of insights about
how cities can do better.
This account
below is simplified. It would take far
too long to cover all the nuances. Nor
do I choose to provide the location of the project or the municipality, mostly
to avoid arguing over the details. But
the outline of the story is accurate and the lessons to be drawn are valid.
A developer
owned an attractive parcel of land, near a viable and active downtown. The existing pedestrian route between the
parcel and downtown wasn’t pleasant, but the city had a plan for a boulevard
with wide sidewalks that new residents could use to reach downtown. The developer, working together with the
intended developer of an adjoining parcel, agreed to pay for much of the
boulevard construction costs.
In addition
to boulevard, the city plan called for a second street to be built within the
project site, extending the urban street grid and giving motorists,
pedestrians, and bicyclists more routes from which to choose. And the boulevard would include a strong
transit component, adding further to senior mobility options.
The
developer planned for 200 residential units above sidewalk storefronts. Eighty units were to be in a senior living
facility. Nor did the developer choose to pay affordable housing fees, instead folding
affordable housing into his project, side-by-side with market rate housing.
Having a
mixture of seniors and others living in the new development was key to urbanism
for at least three reasons. First, it
provided a range of sidewalks users, extending the daily period of urban
vitality.
Second, it
provided a mix of customers, leading the sidewalk businesses to more robust
business models. A café that served
lunches to seniors at midday had to also please the 9-to-5 folks looking for an
evening meal.
Lastly, it
would provide a residential option for families split by old age. One spouse could live in a senior facility, receiving
needed assistance with daily life, while a devoted but healthier spouse could
retain an independent life in a small apartment across the street.
I thought
the proposal was exceptional. The city appeared
to agree and offered to help facilitate the project. First, they agreed to help secure the land
rights for the boulevard, some of which were still privately held. Second, in exchange for a concession by the
developer on a related land-use issue, they agreed to an expedited entitlement
process as permitted under state law.
And then, it
all came unwound. After a year of delay,
and long after the developer’s concession had been banked, the city withdrew
their promise of expedited entitlement.
After an unexpected
staff shakeup, the city ceased assisting with land acquisition for the boulevard. Relieved of the city’s jawboning, one
property owner promptly increased his asking price by a factor of fifty. The land was never acquired.
After having
previously set reduced impact fees for urban development, the city reversed direction
and adopted a new fee schedule that more than doubled the impact fees on the
project.
As project
finances worsened, the developer suggested the city take a role in the boulevard
construction, but the city’s resources were committed to supporting drivable development.
And then the
city missed the deadline for a key entitlement step, thereby violating state
law and delaying the project several more months.
Nor were lenders
enamored of the mixed-use model, particularly the senior housing component,
noting that the project fell outside of their lending experience.
Lastly, the economy
softened, further undermining finances that were already precarious. Eventually the project faltered and then
failed. The developer had funded his
entitlement expenses by mortgaging the property, so the bank assumed ownership.
In the years
since the foreclosure, several buyers have approached the bank. But none have wanted to resurrect the
previous project. Instead, they
approached the city with various alternatives for eliminating the boulevard,
dropping the transit, and converting the entire project into senior housing
without the sidewalk retail, effectively transforming the site into a standard drivable
suburban senior facility that happened to be a few blocks from downtown, but
without a real connection to downtown.
To their
credit, the city has thus far refused to consider the changes. But the only result is that the property remains
vacant, a reminder of a failed plan to strengthen the urban core and to bring
seniors into a walkable setting.
There are
many lessons that can be drawn from this story.
The most obvious one is that opportunities must be grabbed. There seemed to be a city attitude that this
project was one of many that would be offered and that the city needn’t make an
effort to facilitate the project or even to comply with commitments that they had
made. The assumption was badly wrong,
especially considering the senior living element, and deprived the community of
a project that would have filled a need.
But the
lesson on which I’ll focus today is impact fees. I expect that most are familiar with the
impact fee concept. They are fees charged
for various types of community infrastructure, streets, wastewater treatment,
schools, parks, etc., that are set so that the infrastructure can be expanded
to serve the new residents.
The general
concept of impact fees is unassailable.
It would be unfair if new homes didn’t bear a fair share of the cost of
their services.
But there
can be a couple of flaws in the calculation of impact fees. First, the solutions to current deficiencies are
often be folded into impact fees, even though the problems must be addressed
even if no further homes are ever built.
This is a deceit into which most communities fall, largely because Prop
13 has limited other funding options.
Faced with municipal needs that can’t otherwise be funded, decision-makers
find a way to squint and to fold costs into impact fees that shouldn’t be
there.
Second is
the question of the allocation of impact fees across different types of
development. Let’s consider two
residential units, a 3,500 square-foot single-family home on the urban fringe,
located on a quarter-acre lot and likely occupied by a family of five, and a
400 square-foot independent living market-rate apartment in an urban core,
likely occupied by a senior past the age of driving or a new college graduate
trying to get by with a bicycle and transit.
What should be
the relative impact fees for the two examples?
My intuition is the smaller urban apartment should have impact fees that
are perhaps 30 percent of the large suburban home. Others may intuit somewhat differently, but I
expect that my judgment is within the range that others may set.
But for many
cities, the impact fees for the downtown unit are 80 percent or more of the fees
for the suburban home. And cities are usually
unwilling to adjust the fees, even when the unreasonableness of the fees is
noted.
In essence,
urban development is providing a subsidy for suburban development. And most cities are content with that subsidy
because of a prevailing belief that housing starts drive economic progress.
Of course,
there are three problems with that belief.
After seventy years of following that model, our cities are teetering on
the edge of bankruptcy. Also, if a
development form is so essential, why does it need a subsidy? Lastly, what is the solution to the
environmental issues posed by forcing everyone into cars? Nonetheless, the belief persists and impedes
urban development.
I could run further
afield with this subject, but shouldn’t.
I’ve already claimed enough of your attention. I’ll bring this back to the barn with the two
key lessons I’ve tried to impart. If we
want seniors living in downtown, which I endorse heartily, we need to
enthusiastically support development proposals that incorporate senior
living. Second chances may not
come. Also, we need to push cities to
ensure that they’re not using urban development to subsidize drivable suburban development.
Next time, I’ll
begin tackling the other half of the senior living question, how to bring
beneficial elements of urbanism to seniors who remain in drivable suburban
settings, either because they can’t sell their home for the price they need to
live comfortably elsewhere or because their downtown offers few residential
options.
As always,
your questions or comments will be appreciated.
Please comment below or email me.
And thanks for reading. - Dave Alden (davealden53@comcast.net)
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