DESIgN DRIvER: FUNDING
Some trends in space usage in senior living reflect the fact that public monies are at
the forefront of the few currently available funding sources. To qualify for a HUD 232
take-out loan, you don’t have to be building an affordable senior living community—for
example, carlton Senior Living and HHHunt Senior Living
are using them for market-value projects. But beyond its easier availability compared to other sources in the current
economic climate, HUD 232 financing is appealing because it is non-recourse funding
with a HUD insured mortgage with 40-year amortization, says James King, president of
Blacksburg, Virginia-based HHHunt. His company is using HUD 232 for all four of its
current projects under development.
Two examples in the affordable arena provide good illustrations of how HUD 232 loans
impact design, as well as zoning rules and cost-saving through energy efficiency. Of five
affordable assisted living communities either opening or under construction this year,
Bradley, Illinois-based BMA Management, Ltd., financed three with a combination of
HUD 232 financing and local tax credits and two with tax credits alone.
Accepting HUD 232 money does not affect design in a broad sense, but it does
come with the requirement that the project meet a long list of strict HUD-mandated
standards to ensure it is accessible to the disabled, says Blair Minton, BMA’s chairman
of the board. The company now has its architects design all of its communities to the
HUD 232 standard to ensure they qualify should that be the funding source.
Accepting HUD 232 financing also requires an intense amount of paperwork, so it’s
advisable to hire an architect and contractors with prior experience in that arena, Minton
adds. Construction of a HUD 232-financed community takes longer—18 months to
close the loan and start construction on one recent BMA property—partly because of
that documentation but also because of increased demand due to the unavailability of
alternate funding, Minton says.
HUD also has added some new rules this year to encourage senior housing
communities to include energy efficiency in their design to reduce energy costs and allow
more rental subsidies. “The new requirement doesn’t specify what types of energy systems
but does specify an overall energy usage level for utility costs,” says Aaron D’costa, chief
business development officer for Des Plaines, Illinois-based Pathway Senior Living. Pathway
is considering HUD 232 financing for two projects.
of senior housing get in our way?’” Irwin
says. “Are we giving people what they want
and where they want to be?” While the first
boomers will not hit independent living for
an estimated eight more years, they won’t
want to be shut away behind a gate in a
building where everybody always stays indoors, he adds.
Many operators have responded by
bringing the outside in with more natural
lighting, bigger windows, and even indoor
plantings, but Irwin suggests taking the
roof off of more public spaces. He notes
that some California senior living developers are looking to outdoor malls and
the villages at the bottom of ski slopes for
concepts of how boomers will want to live.
Even in colder climes, developers should
look for creative ways to incorporate opportunities for seniors to walk outside in
community design.
A pre-recession trend in independent
living, which Irwin expects to return, is
units growing not in bedroom size but
in living room size so residents can invite
another couple or two over for wine and
cheese, a small dinner party, a game of
cards, or just conversation. Consider that
the predominant home and apartment
design of the past few decades is centered
around an open great room where every-
one gathers around a central island in the
kitchen, he notes.
urban and Mixed-use Design
Before the recession, considerable buzz
centered around how to design in urban
environments for seniors who like the excitement of living in the city. While fewer
upscale high-rise CCRCs may be going up
in towns, some interesting urban projects
are evolving as part of mixed-use developments, says Joe Healy, managing principal
in the Philadelphia, Pennsylvania office of
