01-22-08 1B Market Study - Laserfiche WebLink

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