Twin Cities suburban trend: Silver-lined home market

In a suburban housing market chilled by recession and mortgage woes, one segment of housing is still hot: independent housing for seniors.

In the development pipeline are almost 600 units in Bloomington, more than 700 units in Edina, and about 145 units in Richfield. Roseville's first housing development proposal in three years is a 93-unit senior co-op that would be the sister to a successful co-op built a few years ago.

Demand is highest for ownership and rental units aimed at middle-income seniors. But in suburbs where open land is limited and the population skews older -- places like Edina, Richfield, Roseville and Bloomington, where at least a quarter and sometimes more than a third of single-family homes are owned by people 65 and older -- how much senior housing should be developed?

"That's what a lot of communities are wondering about," said Ron Rankin, Minnetonka's community development director. "Will that baby boomer demographic, as it ages, be as overwhelming [in its impact] as it has been in past decades? Instead of building schools for all of us as we did in the 1950s, will we now be building senior housing in the 21st century?"

The trend can benefit aging suburbs, said David Freedland. In 2006, he and his wife, Dorothy, sold the Bloomington home they'd owned for 40 years and moved into a senior co-op in the same city. Their son and daughter-in-law are raising a family in the old house.

"We're revitalizing a mature suburb," Freedland said.

The average age of people moving into senior housing in Bloomington is 70, and about 60 percent of those are moving from single-family homes within the city, said Bob Hawbaker, city planning and economic development manager. Those senior projects are "pretty full," he said.

Still, cities are watching development carefully to make sure the senior market isn't overbuilt. In Richfield, the market for senior-owned condos appears saturated, said Karen Barton, community development manager. But she said there still is demand for senior apartments with amenities like libraries and gyms.

"Developers feel this is an underserved market for senior rentals," she said.

Go-go vs. no-go

The State Demographer's Office predicts that by 2035, the Twin Cities' 65-and-over population will increase by 145 percent. Historically, about 60 percent of housing here has been single-family homes, according to the Metropolitan Council. The council has suggested that half of all new housing added by 2030 be "attached housing" like condos, townhouses or apartments.

With senior housing targeting people from ages 55 to 90, developments range from maintenance-free townhouses and co-ops for active residents to assisted-living and memory-care units.

Presbyterian Homes & Services alone has recently opened or is planning suburban Twin Cities developments that include about 800 units for independent seniors. Ecumen, another large nonprofit specializing in senior housing and services, is doing a condo conversion in Cannon Falls that will include 40 senior apartments, and also is planning a senior development in Maple Grove with 96 apartments for active seniors. Eventually townhomes will be added.

Planning lingo sometimes refers to various housing levels as aimed at go-go, slow-go and no-go seniors. Slow-go projects like assisted-living housing were overbuilt in the western suburbs a few years ago but are filling now, said Tom Melchior, who analyzes senior real estate for LarsonAllen LLP of Minneapolis. He said co-op developments -- where residents own their units by making a down payment and paying a monthly fee -- have done better.

Recently, several Twin Cities co-op projects aimed at seniors have not been built because presales did not meet expectations, Melchior said. But projects aimed at middle-income buyers in suburbs with large numbers of seniors who want to stay in the same community have done well.

"Bloomington is a great, great location for this sort of thing," Melchior said.

Applewood Pointe, a four-story senior co-op with 95 units, opened in 2006 in Bloomington at Lyndale Avenue and 84th Street. With units priced from $170,000 to $325,000, the complex was sold out when it opened and has a long waiting list.

First in line

The Freedlands were the very first to sign up for a unit. David is 73, Dorothy 72, and they no longer wanted to care for a house and yard. They looked at senior developments around the Twin Cities but liked Applewood Pointe's floor plans, location, price and co-op model.

"This is our building and our great room and our spa, and we use the whole thing as our home," said David Freedland. "Here, you could sell a house and move in without taking another mortgage."

There are five Applewood Pointe communities in Twin Cities suburbs, with two more on the drawing board, said Brian Carey, senior vice president of development for United Properties. Carey said a proposed second co-op project in Bloomington has more than 60 people on a waiting list even though the development now exists only on paper.

It's no surprise that seniors want to stay in communities they helped build 40 or 50 years ago, Carey said. David Freedland agreed. "Our friends, our church, our doctor, our grocery store are all right here," he said.

Their friends, Bill and Dee Hunt, felt the same way. "I didn't want to live in a community with strangers," Dee Hunt said. Some Applewood residents found that their new neighbors included decades-old acquaintances who had lived just half a block away.

The co-op was built on a store site that was targeted for redevelopment, but finding such space in mature suburbs can be a challenge. Edina City Manager Gordon Hughes said seniors there often ask why the city can't foster moderately priced townhouse developments. While Edina seniors may be house-rich, they often don't want to reinvest all the proceeds from selling a house into a new home, Hughes said. But, he said, land in Edina is so expensive that it doesn't pay developers to build low-density townhouses.

Seniors stay in Edina regardless. About 500 units of multi-family housing, including apartments, have been built there since 2000. Seniors have filled those buildings even though they were not always the target market, Hughes said.

Is 'too gray' a problem?

In Edina, where by 2030 seniors are projected to be 35 percent of the population, demands on the city's paramedic services already are increasing, as is demand for in-home assistance.

Seniors on limited incomes can be sensitive to tax increases, affecting everything from road repairs to the outcomes of school bonding proposals.

But so far, seniors in cities such as Edina and Bloomington have been supportive of measures such as school referendums.

Larry Lee, Bloomington's director of community development, said that probably 90 percent of seniors prefer to "age in place" in homes they already own. Those seniors are receptive to arguments that supporting taxes to keep quality schools preserves property values, Lee said.

"The strength of churches, the strength of volunteer organizations depends heavily on seniors," he said. "The call on services is just not that great."

Can a community become "too gray?" Said Minnetonka's Rankin, "It's really a good question, and I'm not sure anybody has a good answer. ...

"I think probably, but nobody has a very good handle on when that happens."

Mary Jane Smetanka • 612-673-7380