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01-22-08 1B Market Study
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01-22-08 1B Market Study
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1/18/2008 11:19:37 AM
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1/18/2008 11:17:07 AM
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Market Study by Maxfield Research
General - Type
Agenda Item
Date
1/22/2008
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<br />HOUSING DEMAND ANALYSIS <br /> <br />The staff-intensive nature of dementia care requires monthly fees starting at about $3,800 and <br />residents of designated memory care housing often contribute 90% or more of their incomes to- <br />ward monthly fees. Thus, the income-qualified market was determined as individuals with in- <br />comes of $45,000 or more, or incomes of$35,000 and non-income producing assets of$! 00,000 <br />or more that could be converted to monthly income. <br /> <br /> <br />Based on our review of senior household incomes in the Arden Hills Market Area, homeowner- <br />ship rates, and home sales data, we estimate that 40% of all seniors in the Market Area would <br />have incomes and/or assets to sufficiently cover the costs for memory care housing. This figure <br />takes into account married couple households where one spouse may have memory care needs <br />and allows for a sufficient income for the other spouse to live independently. <br /> <br />Multiplying the potential market (341 seniors) by 40% results in a total of 136 seniors in the <br />Market Area that would be income/asset-qualified in 2007. We estimate that 25% of the overall <br />demand for memory care housing in Arden Hills would come from outside the Market Area, for <br />a total demand for 182 units/beds in 2007. <br /> <br />Currently, there are 101 competitive memory care units in the Market Area (less a 7% vacancy <br />rate); therefore, subtracting these units from the total demand equates to a demand potential for <br />81 memory care units in 2007 . We have estimated that the subject Site can capture 40% of all <br />the demand in the Arden Hills Market Area. Applying the 40% capturable rate results in an <br />excess demand for 32 memory care units in the Market Area in 2007 <br /> <br />The same calculations were applied to the projected age/income-qualified base in 2012 to deter- <br />mine long-term demand for memory care units. Since there are no pending memory care units in <br />the identified senior Market Area, we project a demand for 41 units/beds from in 2012. <br /> <br />Senior Demand Throul!:h 2020 <br /> <br />In Tables 31 through 33, 2012 is the latest year for which senior housing demand is calculated <br />since that is the latest year that senior household income projections are available from Claritas <br />Inc. However, we know that senior demand in Arden Hills will grow at a faster rate after 2012 <br />due to the aging of the population in the surrounding area. By 2020, we project the Arden Hills <br />Senior Market Area to contain about 19,700 seniors ages 55 to 64, up from 16,270 in 2012. We <br />project the number of seniors age 65 and over to increase to 26,750 in 2020, up from 19,185 in <br />2012. <br /> <br />Based on the projected senior population growth in the Market Area over the next decade and <br />applying typical capture rates of senior housing, we estimate that there will be a need for an addi- <br />tional190 to 215 units in Arden Hills between 2012 and 2020. This is over and above the fig- <br />ures calculated in Tables 31 through 33. The break-out by type of senior housing is shown on <br />the following page. <br /> <br />81 <br /> <br />MAXFIELD RESEARCH INC. <br />
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