Monday, April 13, 2009

Senior Housing Article and A Bit About Lowest Pricing

This small article comes from the AARP Bulletin for April 2009.

Age-Restricted Housing Becomes Ageless

The market for age-restricted housing has gone bust as the economic downturn prompts many boomers, unable to sell their homes, to age in place instead.

In New Jersey, "it is much more difficult to find construction financing, and many banks are saying they will not lend at all" for such projects, says Jeffrey Otteau, president of the Otteau Valuation Group.

Meanwhile, sales of new homes have lagged so badly that many developers have asked to lift the age restrictions-typically requiring residents to be 55-plus that had imposed. Local officials have often granted the requests, rather than have near-vacant complexes.

It's and "issue that's going on across the country," says Jennifer Raitt, chairwoman of the housing and community development division of the American Planning Association. "For the last 10 years, there has been a huge influx of age-restricted housing built, or perhaps overbuilt.

Much of it is in the South, Midwest, and Southwest, where the National Association of Home Builders says not much is being built now. In at least two states outside those regions that joined the boom late, New Jersey and Massachusetts, some towns have lifted age restrictions.

Kenneth J. Cooper
There MAY really be a strong desire among a number of San Pedrans for Senior Housing. There hasn't been any scientific study to determine if there is a true need or how many folks in OUR community would be very interested in moving into Senior Housing of the type considered by the Ponte Vista Development team.

Would Senior Housing be financially viable for developers to seek approval for in the coming year or two?

The economy will turn around and I don't thing anyone can currently say how many of the potential 380 Senior Housing units at Ponte Vista would find quick buyers.

In trying to determine the possible prices for the least expensive units at Ponte Vista, I begin with what the Attorney stated.

At the Planning Commission meeting, Mr. Allen Abshez, representing the Applicant stated that 20% of the Senior Housing Units and Multi-family Units set aside as least priced would be for buyers who earned 180% of the Area Median Income.

According to County statistics, the Area Median Income for the Wilmington Community Plan Area is about $41,000 per year. This figure is used because Ponte Vista is located in the Wilmington/Harbor City Community Plan Area and not in San Pedro's.

The San Pedro Community Plan Area has an Area Median Income that is somewhat higher.

So, using 180% of the A.M.I. of $41,000, the minimum yearly requirement to purchase one of the 153-least priced units at Ponte Vista would be about $73,800.

That yearly income is $6,150 per month.

If one allows for 33% of monthly income to go to house payments and property taxes, those would total about $2,029.5 per month.

In 2009 and beyond, how much 'home' will $2030 per month, not counting HOA fees buy?

Right now some folks are telling me that it would actually take two incomes combined totaling about $90,000 per year to get into one of the proposed 153 units, if they are actually built.

I hope in the new spirit of revelations by the Development Team, we all get to learn about pricing, number of bedrooms, and probable population during the recirculation of the EIR.


Domenic Costa said...

Thank you for your letter to the editor to the Daily Breeze(Tues.4/14/09}. I just wanted to say that I completely agree! Thank you for beating the drum and contributing to OUR community!

Anonymous said...

all of the financial modeling for this project was probably done at the height of the real estate bubble. so it's a good bet, it's all irrelevant in the current market.