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After Years of Slow Growth, Senior Housing on the Rise

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In Crofton, new development was supposed to rise on Route 3 North, next to the suburb’s iconic front gates (see The Business Monthly, November 2015).
That hasn’t happened. Not yet, anyway.

But a glance almost straight across the highway, to its south side, reveals that — with the demolition of the former Uncle Nicky’s restaurant and an old-school home that housed a psychic reader — Brightview Crofton Riverwalk is absolutely happening, and it’s happening within a market sector that has been relatively quiet for the past several years: senior housing.

In Howard County, there’s nothing coming out of the ground at this point, but there might be in the forseeable future. Catonsville-based Erickson Living Management (ELM) recently held its first public meeting to discuss the concept of a fourth senior living community.
The as-yet-unnamed project would be built in the vein of the company’s other area projects, Charlestown, also in Catonsville; Oak Crest Village, in Parkville; and Riderwood, in Silver Spring.

Making the Move

Andrew Teeters is vice president of development for the Baltimore-based Shelter Group, which is building the Brightview project in Crofton. The company already owns and operates similar properties in Anne Arundel County in Severna Park and Edgewater, and is building another project, Brightview Annapolis, on Route 178, near Westfield Annapolis Mall.
The Crofton project is rising on a 20-acre site, five of which are set aside for the 158-apartment senior living project that will offer “everything but nursing care,” Teeters said, so it will include independent living, assisted living and dementia care. The rest of the acreage is slated for 172 townhomes to be built by another to-be-determined builder, and open space.

“One of our points is to integrate senior housing into a regular community, because they can become isolated in their old homes,” he said. “We’re going to have a park, paths and the Riverwalk to create an intergenerational community to avoid that issue.”

Teeters stressed that right now appears to be the right time to build more senior housing.

“We’ve been monitoring this market for years,” he said. “We have yet to purchase our five-acre site, which was developed by The Gilbane Co., but we’ve had it under contract since 2014. We’re just waiting for permit approvals.”

He added that Shelter will “go vertical” with the project this fall and shoot for completion in 2019, adding, “there are very limited options in the Crofton area.”

Early Plans

As for the project that’s planned for the River Hill section of Clarksville, located near the intersection of routes 108 and 32, between Clarksville Commons and Sheppard Lane, “There’s no estimated cost yet, due to evolving site plan,” said Scott Sawicki, senior director of government affairs for Erickson.

The current proposal calls for 1,200 units, plus a health care facility. “We see this as a great opportunity,” said Sawicki. “We already have three successful communities in Maryland and all are highly occupied,” at around 95% in each case, “with strong wait lists. We’re to the point where we get vacant residences that need to be refurbished and repaired, and by that time we already have a number of people who are looking at those vacancies or perhaps condos. That tells us that it’s time to start building a fourth community.”

He said another factor in proceeding with the plan is a Howard County report on aging that indicates that county residents “age 85 and older will increase from 6,606 to 23,334 by 2035.”

ELM hosted its first public meeting in July but hasn’t “filed anything yet,” Sawicki said. “There was some opposition from [the community], as well as some who attended that want us to work with political leaders as we move forward,” adding that about 150 people attended and “only about a dozen people asked questions, mostly about density and traffic.”
The next step at the soon-to-be-proposed community, which ELM executives are tentatively referring to as Erickson Living at Limestone Valley, is to create a second version of the plan after the company works with the State Highway Administration to address traffic improvements. ELM would then file formal plans with Howard County Planning & Zoning, which it hopes will happen by early August.

So from ELM’s point of view, it’s so far, so good, as it braces for the Silver Tsunami. “We appreciate the initial support and look forward to working with opponents to persuade them of the merits of the project.”

Meanwhile, Charlestown is renovating and expanding on the west side of the campus with a new building called Wilton Overlook, which will house residents in need of skilled nursing with memory care. It is slated for initial occupancy in January 2019.

Sprucing Up

Speaking of renovations, that’s just what another long-time player in the field has been doing. Vantage House, in Columbia, is in the process of renovating public spaces and its other features, and repositioning itself in the market.

Like the local ELM communities, the occupancy rate at Vantage House is about 95%. “We have waiting lists for two-bedroom apartments,” said Marketing Director Andrew Morgan, noting that 64% of its inventory is one-bedroom apartments, with the rest two-bedroom dwellings.
Morgan said the shift at the Columbia staple is that its residents, and potential residents, “are more focused on lifestyle, not care or services. We are a life planning community, and [residents] have to be independent to come in. The step up here is more to satisfy other areas of life.

But he also stressed that Vantage House is set up to accommodate the physical changes in life and health. As for the topic of expansion, Morgan said that topic hasn’t moved onto the radar screen, at least not yet. “The topic has arisen,” he said, “but we haven’t really focused on opportunities to add rooms to the campus.”

The reason for the movement in the senior housing market is that “its demographics are growing,” said Geary Milliken, president and CEO with Carroll Lutheran Village, in Westminster, and the new-ish Lutheran Village at Miller’s Grant, in Ellicott City.

“Maryland is a highly-regulated market, and that means it’s growing a little slower,” said Milliken, pointing out that seniors often relocate to other states, notably Delaware, because it does not tax retirement income.

Universal Design is another reason for the recent sluggishness in the state’s market, he said. “That’s an important point, because the market is ripe for retrofitting, especially with high tech products like motion detectors. That trend, combined with the costs of new construction, could also be part of the reason why senior living communities haven’t been coming out of the ground as much in recent years.”

Then comes the matter of aging construction. “Seventy percent of senior housing [in the area] is 25 years of age or older, and doesn’t include Universal Design. That bodes well for new construction in the state, too.

Overbuilt?

Milliken also feels like assisted living communities across the country, and maybe in this area, “may be overbuilt,” hence “a slowdown in that sector,” he said. “We are faith-based nonprofit. There is a split between corporations that are in it for money and faith-based organizations. Our Miller’s Grant project was the first CCRC that had opened in Maryland in several years, the last being Ingleside at King Farm,” in Rockville.
However, be that as it may: “The good news,” he said, “is that Miller’s Grant’s 241 residential units are filling up ahead of schedule and are 88% filled; Carroll Lutheran Village, in Westminster, an older product, encompasses 398 units, and sits at 97% occupancy,” which has further tightened the area market.

As for new construction, “It’s almost cost-prohibitive to start a new project in Maryland due to the regulatory environment, which protects consumers but inhibits new business growth,” Milliken said, “but if you’re already a provider in Maryland, that’s better than coming in from out of state. That bodes well for our company and for Erickson.
“Around the country we’re seeing the highest growth in the past decade,” he said, “and there will eventually be pent-up demand here.”

Three Factors

While the Brightview Crofton Riverwalk rises and the discussions intensify concerning the ELM project for Clarksville, Phyllis Madachy, who most recently served as director of the Howard County Department of Citizen Services and is a former director of the county’s Office on Aging, offered her insights into today’s senior living market.

“Howard County was like the Bermuda Triangle. Developers were sitting on a lot of land due to the Adequate Public Facilities Ordnance, which meant they couldn’t build in areas where schools were over enrollment,” Madachy said, “but during my last job, the county started a new ordnance to allow development that doesn’t not impact schools or roads. So there was an explosion in senior housing, not so much [in the rise of new, large places] like Vantage House,” but smaller projects, like Miller’s Grant and Snowden Overlook.

Another factor, she said, was “rapid growth” in Howard’s 60-plus population, “because people who moved here want to stay, and baby boomers moved in to be near their kids.” The third factor is the county’s attractiveness as a destination, partially due to its health care options.
“Still, we’re not seeing large facilities being built as fast as one might think,” she said, “as we did in early ’90s and again 10 years later. And there are people who feel that the market is already oversaturated.”
So given other factors, such as the popularity of universal design (“I never thought that would catch on the way it has”) and the fact that many seniors would really rather age in their own homes, Madachy likes how the market is evolving.

“Another factor is small group homes, which tend to be more affordable and are in line for subsidies,” she said. “All told, it’s good for a community to have various and affordable options.”