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Valerie S. KretchmerAssociates, Inc.Real Estate and Planning Consulting
Senior Housing Market Analysis
Prepared for
Oak Park Township
April 2010
Prepared by
Valerie S. Kretchmer Associates, Inc.
2707 Walnut Avenue
Evanston, IL 60201
847-864-8895 (Phone)
847-864-0103 (Fax)
www.kretchmerassociates.com
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Valerie S. KretchmerAssociates, Inc.Real Estate and Planning Consulting
2707 Walnut AvenueEvanston, IL 6020TEL 847-864-8895FAX 847-864-0103
April 22, 2010
Mr. Gavin Morgan, Township Manager
Oak Park Township105 S. Oak Park Avenue
Oak Park, IL 60302
Dear Mr. Morgan:
Valerie S. Kretchmer Associates, Inc. (VSKA) is pleased to submit this final report with
the analysis of the potential for additional senior housing in Oak Park.
Thank you for the opportunity to work on this interesting project for you.
Sincerely,
Valerie Sandler Kretchmer
President
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TABLE OF CONTENTS
Page
I. SUMMARY AND CONCLUSIONS 1
II. OAK PARK AND MARKET AREA DEMOGRAPHICS 5
III. OAK PARK AND MARKET AREA HOUSING 13CHARACTERISTICS
IV. SENIOR HOUSING SURVEY 27
V. DEMAND FOR ADDITIONAL SENIOR HOUSING 30IN OAK PARK
VI. APPENDIX 36
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I. SUMMARY AND CONCLUSIONS
A. Purpose of This Assignment
Valerie S. Kretchmer Associates, Inc. (VSKA) and Bernadette Schleis & Associates(BSA), were hired by Oak Park Township to prepare a market analysis, including asurvey of seniors living in Oak Park, to determine whether there is a demand foradditional senior housing in Oak Park. At this time, no specific site was identified orconsidered for new senior housing. VSKA conducted the following for this assignment:
Met with Oak Park Township staff Visited all of the senior buildings in and near Oak Park and interviewed their
managers or marketing staff
Contacted nearby communities to see if there are any planned senior buildings Contacted senior service providers in Oak Park Prepared a demographic analysis of the senior population in and near Oak Park Conducted a telephone survey of Oak Park seniors not currently living in
designated senior housing
Determined the demand for additional senior housing by type in Oak Park.The results of these elements are incorporated into this report.
B. Summary
1. Oak Park and Market Area Demographics
VSKA reviewed the demographics, housing characteristics and existing seniorhousing in Oak Park. The Primary Market Area (PMA) from which a newbuilding will draw is the Village of Oak Park which is coterminous with Oak ParkTownship. However, a high quality building can be expected to draw residentsfrom nearby suburbs that have few or no senior housing options. These includeRiver Forest, Forest Park, Elmwood Park and Berwyn which make up theSecondary Market Area (SMA).
VSKA did not include the Austin neighborhood on the west side of Chicago
because there are already many senior buildings. We recognize that depending onthe location of a senior building in Oak Park, additional demand could come fromChicago residents.
Key demographic findings include:
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Seniors age 65 and over comprise 10.5% of Oak Parks population, andthose 75 or older represent 5.5% of the villages population.
There are more than 5,250 Oak Park residents age 65+.o ZIP code 60302 (north side of Oak Park ) has the largest number with
an estimated 3,400 seniors.o ZIP code 60304 (south side of Oak Park) has an estimated 1,500
seniors.o 60301 (downtown Oak Park) has an estimated 400 seniors.
In Oak Park, one third of households over 65 have incomes under $35,000and 46% have incomes under $50,000.
Over the next five years, the Oak Park population aged 65-84 is projectedto increase.
2. Oak Park Housing Characteristics The median rent in Oak Park was $875 and the median home value was
$388,800 based on the 2005-2007 American Community Survey.
62% of the households over 65 and 55% of those over 75 in the Village ofOak Park are homeowners.
In 2000, nearly a quarter of all renters were paying 35% or more of theirincome in rent. In 2007, this increased to nearly one third of all renterspaying such a high share.
3. Competitive Senior Properties There are six senior buildings in Oak Park.
o Three are affordable independent senior buildings with 474 units (TheOaks, Mills Park Towerand Heritage House).
o Two are market rate facilities with 312 independent living units (OakPark Arms and Holley Court Terrace) andsome assisted living units.
o One is exclusively for assisted living (Belmont Village), with 127studio and one bedroom apartments (assisted, skilled nursing andmemory care)
The SMA has 2 buildings with 128 units including:o TheAltenheim in the Parkin Forest Park with 56 market rate units.o Elmbrook Senior Residences in Elmwood Park with 72 affordable
units.o Two senior buildings in Forest Park and Elmwood Park with a
combined total of 174 units may be applying for Low Income HousingTax Credits (LIHTCs) through the Illinois Housing DevelopmentAuthority in May 2010.
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4. Senior Survey Results
VSKA conducted a telephone survey in mid-February 2010 of seniors notcurrently living in designated senior housing in Oak Park. A total of 150
interviews were completed. Key findings are:
Over 60% of the respondents are not likely to move from their currenthome in the next five years.
Of the remainder who would consider a move or are not sure about amove, 38% feel that it is extremely or very important to remain in OakPark.
Of those respondents who said they would consider a move in five years,only 36% are interested in senior housing, and of those:o 9 prefer independent living without mealso 5 prefer independent living with mealso 4 prefer assisted living
5. Demand for Additional Senior Housing in Oak Park
There is demand for 40-49 additional independent living units for OakPark residents with incomes between $20,000 and $50,000. Those earningless than $20,000 are served by existing affordable buildings, while thoseearning over $50,000 are served by existing market rate buildings.
There is additional demand from those in the SMA and outside of thePMA or SMA to support a total of161-216 units of senior housing. Thisincludes both market rate and affordable senior housing, with most of the
demand for affordable housing for those with incomes between $20,000and $35,000. This assumes that the proposed senior buildings in ForestPark and Elmwood Park are not built. If one or both are built, demandfrom the SMA will be lower.
There is not additional demand for market rate assisted living at this timeas the existing facilities in Oak Park adequately serve this market niche.
There could be future demand for a supportive living facility (SLF) thatoffers assisted living to low-income seniors through a State of Illinoisprogram. However, because the state awarded 18 new licenses in early2010, it will be several years before it is likely to accept applications foradditional SLF licenses.
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From Oak Park Residents 40 49
Affordable (LIHTC) 30 35
Market Rate 9 14
From Secondary Market Area Residents 81 113
Affordable (LIHTC) 54 72
Market Rate 28 41
From Residents Outside of the Area 40 54Affordable (LIHTC) 28 36
Market Rate 12 19
Total Demand 161 216
Affordable (LIHTC) 112 142
Market Rate 49 74
Note: Numbers may not total due to rounding.
Source: Valerie S. Kretchmer Associates, Inc. based on household estimates
from Demographics Now.
DEMAND FOR NEW SENIOR INDEPENDENT LIVING IN OAK PARK
Range of Supportable Units
(#)
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II. OAK PARK AND MARKET AREA DEMOGRAPHICS
A. Market Area
Since there is no specific senior housing site identified by Oak Park Township at thistime, VSKA focused our attention on the Village of Oak Park as the Primary MarketArea (PMA) for a senior building in Oak Park. In addition, we delineated a SecondaryMarket Area (SMA) based on interviews with managers of the existing Oak Park seniorbuildings and on the locations of additional senior housing. The SMA includes RiverForest, Forest Park, Elmwood Park and Berwyn.
While proximate to Oak Park on the east, the Austin community area of Chicago was notincluded in the SMA. This is due to the fact that the Austin area is already well servedwith senior housing. We recognize that a new building in Oak Park could attract some
residents from Chicago depending on the actual location; however, this analysis focusedon the need and support from residents of Oak Park and the nearby underserved suburbs.The ability to attract residents from Chicago is considered to be additional demandfrom people outside of the PMA and SMA. A map of the market area is on the followingpage.
B. Market Area Demographics
The Village of Oak Park has an estimated 5,200 people over age 65 and 2,700 over 75,equal to 10.5% and 5.5% respectively of the villages population according to estimates
by Demographics Now, a demographic data vendor. Over the next five years, thepopulation aged 65-84 is projected to increase. These numbers are consistent with the2005-2007 American Community Survey conducted by the U.S. Census. The Censusdoes not have more recent estimates for Oak Park and wont until the 2010 decennialCensus is completed. These estimates and projections are displayed in Table 1.
The SMA is twice the size of Oak Park in total population and has an estimated 14,300people over 65, 7,500 of whom are over 75 years of age. Seniors comprise a larger shareof the SMAs population than in Oak Park. Over the next five years, the population 65-74years of age is projected to increase in the SMA while the number of people 75+ isprojected to decrease.
VSKA also looked at the senior population by ZIP code, as shown in Table 2. ZIP code60302 (north side) has the largest number of seniors with an estimated 3,400 residentsover 65. ZIP code 60304 (south side) has an estimated 1,500 people and 60301(downtown) has 400 people over 65. A ZIP code map follows.
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DeLorme Street Atlas USA 2010
Oak Park Senior Market Area
Data use subject to license.
DeLorme. DeLorme Street Atlas USA 2010.
www.delorme.com
TN
MN (3.3W)
0 1
0 1 1 2
mikm
Scale 1 : 62,500
1" = 5,208.3 ft Data Zoom 11-6
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Number Percent Number Percent
2009 Estimated Population 49,983 101,551
65-74 Years 2,519 5.0% 6,816 6.7%
75-84 Years 1,739 3.5% 5,073 5.0%
85+ Years 996 2.0% 2,396 2.4%
Total 65+ 5,254 10.5% 14,285 14.1%Total 75+ 2,735 5.5% 7,469 7.4%
2014 Projected Population 48,403 98,565
65-74 Years 3,082 6.4% 7,895 8.0%
75-84 Years 1,797 3.7% 4,926 5.0%
85+ Years 916 1.9% 2,130 2.2%
Total 65+ 5,795 12.0% 14,951 15.2%
Total 75+ 2,713 5.6% 7,056 7.2%
Population Change 2009-2014 (1,580) -3.2% (2,986) -2.9%
65-74 Years 563 22.4% 1,079 15.8%
75-84 Years 58 3.3% (147) -2.9%
85+ Years (80) -8.0% (266) -11.1%
Total 65+ 541 10.3% 666 4.7%
Total 75+ (22) -0.8% (413) -5.5%
Source: Demographics Now.
Oak Park Secondary Market Area
Table 1
POPULATION OVER 65 YEARS IN OAK PARK
AND SECONDARY MARKET AREA
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Numbe r Perce nt Numbe r Perce nt Number Percent
2009 Estimated Population 2,346 30,856 16,781
65-74 Years 131 5.6% 1,606 5.2% 782 4.7%
75-84 Years 167 7.1% 1,101 3.6% 471 2.8%
85+ Years 125 5.3% 670 2.2% 201 1.2%
Total 65+ 423 18.0% 3,377 10.9% 1,454 8.7%
Total 75+ 292 12.4% 1,771 5.7% 672 4.0%
2014 Projected Population 2,644 30,072 15,68765-74 Years 179 6.8% 1,980 6.6% 923 5.9%
75-84 Years 165 6.2% 1,155 3.8% 477 3.0%
85+ Years 108 4.1% 615 2.0% 193 1.2%
Total 65+ 452 17.1% 3,750 12.5% 1,593 10.2%
Total 75+ 273 10.3% 1,770 5.9% 670 4.3%
Population Change 2009-2014 298 12.7% (1,094) -2.5% (1,094) -6.5%
65-74 Years 48 36.6% 374 23.3% 141 18.0%
75-84 Years (2) -1.2% 54 4.9% 6 1.3%
85+ Years (17) -13.6% (55) -8.2% (8) -4.0%
Total 65+ 29 6.9% 373 11.0% 139 9.6%
Total 75+ (19) -6.5% (1) -0.1% (2) -0.3%
Source: Demographics Now.
60304
Table 2
POPULATION OVER 65 YEARS IN OAK PARK ZIP CODES
60301 60302
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DeLorme Street Atlas USA 2010
Oak Park Zip Codes
Data use subject to license.
DeLorme. DeLorme Street Atlas USA 2010.
www.delorme.com
TN
MN (3.3W)
0 600 1200 1800 2400 3000
0 200 400 600 800 1000
ftm
Scale 1 : 25,000
1" = 2,083.3 ft Data Zoom 13-0
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Again, most of the senior population growth in all 3 ZIP codes is expected to come fromseniors aged 65-74. Each ZIP code currently has about 5% of its population aged 65-74,and 60302 and 60304 have a total of about 10% over age 65. ZIP code 60301 has a muchlarger portion of residents 75+. There is a large senior building, as well as several
condominium and apartment buildings, in this ZIP code that most likely account for this.
It is also important to analyze the income of area seniors to understand what they are ableto afford for housing, as presented in Table 3. In Oak Park, one third of households over65 have incomes under $35,000 and 46% have incomes under $50,000. Those earningover $50,000 are projected to grow in number over the next five years.
Typically those with incomes under $35,000 are candidates for affordable senior housing.Those earning over $50,000 are candidates for market rate housing. Those who earnbetween $35,000 and $50,000 may be able to afford some market rate housing, especiallyif they are able to spend down their assets. According to the 2005-2007 American
Community Survey, the mean retirement income of Oak Park households was $27,466and the mean Social Security income was $15,603. Thus many seniors are unable toafford market rate senior housing.
The incomes in the SMA are lower on average than in Oak Park as shown in Table 4.Approximately 39% of SMA senior households earn less than $35,000 and 54% earn lessthan $50,000. Growth is projected among those households earning over $100,000.
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# % # % # %
Households 55-64 3,367 3,793 426 12.7%
Households 65+ 3,637 4,074 437 12.0%
Under $10,000 279 7.7% 275 6.8% (4) -1.4%
$10,000-$19,999 405 11.1% 429 10.5% 24 5.9%
$20,000-$29,999 336 9.2% 312 7.7% (24) -7.1%
$30,000-$34,999 168 4.6% 164 4.0% (4) -2.4%
$35,000-$49,999 470 12.9% 483 11.9% 13 2.8%
$50,000-$74,999 545 15.0% 634 15.6% 89 16.3%
$75,000-$99,999 372 10.2% 427 10.5% 55 14.8%
$100,000-$149,999 466 12.8% 575 14.1% 109 23.4%
$150,000+ 596 16.4% 775 19.0% 179 30.0%
Households 75+ 1,943 1,949 6 0.3%
Under $10,000 171 8.8% 152 7.8% (19) -11.1%
$10,000-$19,999 261 13.4% 251 12.9% (10) -3.8%
$20,000-$29,999 200 10.3% 165 8.5% (35) -17.5%
$30,000-$34,999 92 4.7% 83 4.3% (9) -9.8%
$35,000-$49,999 243 12.5% 226 11.6% (17) -7.0%
$50,000-$74,999 283 14.6% 285 14.6% 2 0.7%
$75,000-$99,999 184 9.5% 195 10.0% 11 6.0%
$100,000-$149,999 221 11.4% 255 13.1% 34 15.4%
$150,000+ 288 14.8% 337 17.3% 49 17.0%
Source: Demographics Now.
Table 3
VILLAGE OF OAK PARK HOUSEHOLDS 65+ BY INCOME
Age/Income 2009 2014 Change 2009-2014
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# % # % # %
Households 55-64 10,791 11,825 1,034 9.6%
Households 65+ 9,156 9,718 562 6.1%
Under $10,000 603 6.6% 580 6.0% (23) -3.8%
$10,000-$19,999 1,151 12.6% 1,133 11.7% (18) -1.6%
$20,000-$29,999 1,257 13.7% 1,149 11.8% (108) -8.6%
$30,000-$34,999 531 5.8% 543 5.6% 12 2.3%
$35,000-$49,999 1,381 15.1% 1,360 14.0% (21) -1.5%
$50,000-$74,999 1,643 17.9% 1,805 18.6% 162 9.9%
$75,000-$99,999 968 10.6% 1,079 11.1% 111 11.5%
$100,000-$149,999 889 9.7% 1,130 11.6% 241 27.1%
$150,000+ 733 8.0% 939 9.7% 206 28.1%
Households 75+ 4,951 4,760 (191) -3.9%
Under $10,000 355 7.2% 315 6.6% (40) -11.3%
$10,000-$19,999 720 14.5% 654 13.7% (66) -9.2%
$20,000-$29,999 748 15.1% 623 13.1% (125) -16.7%
$30,000-$34,999 298 6.0% 277 5.8% (21) -7.0%
$35,000-$49,999 723 14.6% 649 13.6% (74) -10.2%
$50,000-$74,999 826 16.7% 825 17.3% (1) -0.1%
$75,000-$99,999 481 9.7% 482 10.1% 1 0.2%
$100,000-$149,999 438 8.8% 508 10.7% 70 16.0%
$150,000+ 362 7.3% 427 9.0% 65 18.0%
Source: Demographics Now.
Table 4
OAK PARK SECONDARY MARKET AREA
HOUSEHOLDS 65+ BY INCOME
Age/Income 2009 2014 Change 2009-2014
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III. OAK PARK AND MARKET AREA HOUSING CHARACTERISTICS
A. General Housing Characteristics
According to the 2000 Census, 62% of the households over 65 and 55% of those over 75in the Village of Oak Park were owners (Table 5). More recent information is notavailable. The profile differs considerably by ZIP code within the village. Those livingdowntown in ZIP code 60301 are primarily renters (71% of those 65+ and 78% of those75+). In ZIP codes 60302 and 60304, the majority of seniors are owners, though theshare is much higher in ZIP code 60304 on the south side. The high share of renters inthe downtown area is due in part to the presence of a senior rental building.
Based on information from the 2005-2007 American Community Survey as shown inTable 6, the portion of renter-occupied households in total in Oak Park has decreased by
17% since 2000. During this same time period, Oak Park saw an increase in single-family attached and 2-9 unit multi-family housing.
According to the 2005-2007 American Community Survey, the median rent in Oak Parkwas $875, as shown in Table 7. In 2000, nearly a quarter of all renters were paying 35%or more of their income in rent. In 2007, this share increased to nearly one third of allrenters. Oak Parks excellent reputation and high quality services attract people to thecommunity, but because it has high rents, more people are overburdened compared tosome neighboring areas. Based on affordability guidelines, a renter should not be payingmore than 30% of their income in rent, though for seniors this share can be as high as45% according to guidelines used by the Illinois Housing Development Authority.
The median home value in 2005-2007 according to the American Community Surveywas $388,800. Prices have dropped in the past several years and the median sales pricein the third quarter of 2009 was $322,000, down from $339,000 one year earlieraccording to data collected by the Multiple Listing Service (MLS) and published in theChicago Tribune. (This includes all residential sales through the MLS so it does notinclude properties sold by owners directly.)
VSKA conducted a survey of on-line listings for one and two bedroom apartments inelevator buildings in Oak Park since these are most suitable for seniors. One bedroomrents ranged from $950 to $2,005 and two bedroom rents ranged from $1,275 to $2,865.
These rents are much higher than would be affordable for low and moderate incomeseniors.
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Number Percent Number Percent Number Percent Number Percent
Households 65+ 3,504 370 2,283 851
Owner 2,155 61.5% 106 28.6% 1,338 58.6% 711 83.5%
Renter 1,349 38.5% 264 71.4% 945 41.4% 140 16.5%
Households 75+ 1,919 275 1,243 401
Owner 1,062 55.3% 61 22.2% 661 53.2% 340 84.8%
Renter 857 44.7% 214 77.8% 582 46.8% 61 15.2%
Source: 2000 Census.
Table 5
2000 HOUSING CHARACTERISTICS HOUSEHOLDS 65+
Oak Park 60301 60302 60304
VSKA also reviewed building trends in Oak Park from 1998-2009, as shown in Table 8.Based on information reported by the Chicago Metropolitan Agency for Planning and theU.S. Census, there were at least 292 new housing units built during that time period,approximately one third of which was multi-family. Permit information for 2007 wasunavailable.
Construction peaked in 2006 and by 2009 construction in Oak Park and elsewhere stalled.During this 12-year period, construction of single family homes averaged 19 homes peryear. Multi-family housing construction peaked in 2005 at 62 units, with an average of 10
units per year since 1998.
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Number Percent Number Percent Number Percent
Year Round Housing Units 23,723 24,086 363 1.5%
Occupied 23,079 97.3% 22,120 91.8% (959) -4.2%
Vacant 644 2.7% 1,966 8.2% 1,322 205.3%
Units in Structure 23,723 24,086 363 1.5%
Single Family Detached 9,707 40.9% 9,790 40.6% 83 0.9%
Single Family Attached 569 2.4% 714 3.0% 145 25.5%
2-4 Units 2,845 12.0% 2,976 12.4% 131 4.6%
5-9 Units 2,031 8.6% 2,715 11.3% 684 33.7%
10+ Units 8,541 36.0% 7,891 32.8% (650) -7.6%
Mobile Home, Other 30 0.1% 0 0.0% (30) -100.0%
Housing Tenure
Owner-Occupied Units 12,986 56.3% 13,742 62.1% 756 5.8%
Renter Occupied Units 10,093 43.7% 8,378 37.9% (1,715) -17.0%
Year Structure Built 23,723 24,086 363 1.5%
2000-2007 NA NA 483 2.0% NA NA
1990-2000 428 1.8% 378 1.6% (50) -11.7%
1980-1989 579 2.4% 671 2.8% 92 15.9%
1970-1979 1,351 5.7% 1,111 4.6% (240) -17.8%1960-1969 1,875 7.9% 1,899 7.9% 24 1.3%
1940-1959 3,844 16.2% 3,076 12.8% (768) -20.0%
1939 or earlier 15,646 66.0% 16,468 68.4% 822 5.3%
Source: 2000 Census and 2005-2007 American Community Survey
Table 6
2000 AND 2007 HOUSING CHARACTERISTICS FOR OAK PARK
Oak Park 2000 Oak Park 2005-2007 Change
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Number Percent Number Percent Number Percent
Renter Occupied Units 10,094 8,378 (1,716) -17.0%
Rental Vacancy Rate 2.7% 11.2% 8.5%
Gross Rent
Less than $200 301 3.0% 193 1.9% (108) -35.9%
$200-$299 225 2.2% 212 2.1% (13) -5.8%
$300-$499 574 5.7% 227 2.2% (347) -60.5%
$500-$749 4,597 45.5% 1,526 15.1% (3,071) -66.8%$750-$999 2,521 25.0% 3,089 30.6% 568 22.5%
$1,000-$1,499 1,228 12.2% 2,092 20.7% 864 70.4%
More than $1,500 509 5.0% 832 8.2% 323 63.5%
No Cash Rent 139 1.4% 207 2.1% 68 48.9%
Median Gross Rent $677 $875 $198
Gross Rent as % of Income
Less than 15% 3,321 35.1% 1,076 12.8% (2,245) -67.6%
15-19.9% 1,589 16.8% 1,519 18.1% (70) -4.4%
20-24.9% 1,284 13.6% 1,073 12.8% (211) -16.4%
25-29.9% 664 7.0% 871 10.4% 207 31.2%
30-34.9% 390 4.1% 744 8.9% 354 90.8%
35% or more 2,218 23.4% 2,754 32.9% 536 24.2%
Not computed 0.0% 341 4.1% NA NA
Source: 2000 Census and 2005-2007 American Community Survey
Table 7
2000 AND 2007 RENTAL HOUSING CHARACTERISTICS IN OAK PARK
Oak Park 2000 Oak Park 2005-2007 Change
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Year SF MF Total
1998 11 0 11
1999 32 0 32
2000 6 0 6
2001 14 0 14
2002 13 0 13
2003 13 0 13
2004 6 7 132005 6 62 68
2006 60 10 70
2007 NA NA NA
2008 23 25 48
2009 4 0 4
Total 188 104 292
Avg. 19 10 29
OAK PARK BUILDING PERMITS ISSUED
1998-2009
Note: Average only includes years where data is available.
Table 8
Source: Chicago Metropolitan Agency for Planning 1998-
2005; US Census 2006-2009.
B. Existing Market Area Senior Properties
1. Affordable Independent Living Properties
There are three affordable senior buildings in Oak Park with 474 units MillsPark Tower, Heritage House and The Oaks. All three are targeted to very low-
income residents who pay 30% of their adjusted income in rent. Most residentsearn less than $20,000. All three buildings are 30+ years old but have beenupgraded over the years. They have a variety of common rooms and offeractivities for the residents. They are full with long wait lists, though managers
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report that they often call many people on the list before an applicant is actuallyready and willing to move.
The SMA has only one affordable senior building,Elmbrook Senior Residences in
Elmwood Park, which is 10 years old and has 72 units. It is a fairly basicbuilding, but it too has a long waiting list. Some residents are from Oak Park.
2. Market Rate Independent Living Properties
There are two market rate facilities in Oak Park with 312 independent living units,Oak Park Arms and Holley Court Terrace. These buildings also have a smallnumber of assisted living units. Occupancy is 90%+ at each building and rentsrange from $1,168-2,495 at the Oak Park Arms and $3,000-5,250 at Holley CourtTerrace depending on the unit size. The units range from small studios at the OakPark Arms to large two bedroom units at Holley Court Terrace. Oak Park Arms
offers an optional meal plan with two daily meals for an additional $345, whereastwo meals per day are included in Holley Courts fees.
These market rate buildings offer more services and amenities than the affordableindependent living buildings in Oak Park or Elmwood Park. Oak ParkTownships Senior Services are located at the Oak Park Arms and it offersactivities at a senior center and noon time meals.
The SMA has one market rate facility,Altenheim in the Park, in Forest Park. Thisis an older building renovated in 1997 with 56 studio, one and two bedroomapartments. Rents are considerably lower than at the market rate facilities in Oak
Park ranging from $561-1,362 for studio, one and two bedroom apartments. Thelower rents do not include meals, while the higher rents include a main meal atlunch. The Altenheim is open to those aged 55+ and is well occupied.
3. Market Rate Assisted Living
There is one building exclusively for assisted living in Oak Park,Belmont Village,with 127 studio and one bedroom apartments. The rent ranges from $2,850-5,700depending on the room size and services. The base rent includes three meals perday and assistance with activities of daily living. Additional charges apply formore intense assistance. Belmont Village also specializes in memory care and
one third of the beds are devoted to this. The building is well occupied.
Both Oak Park Arms and Holley Court Terrace offer assisted living with acombined total of 56 units. Rates range from $3,210-3,920 at Oak Park Arms and$4,535-6,635 at Holley Court Terrace depending on the apartment size. Rentincludes three daily meals and assistance with activities of daily living. The
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assisted living units at Holley Court Terrace are full and are 90% occupied at theOak Park Arms.
4. Independent Living Near but Outside of the Market AreaThere are two independent living facilities under the Low Income Housing TaxCredit (LIHTC) program with a total of 429 units in the Montclare neighborhoodof Chicago and in Melrose Park. Montclare Senior Residences consists of twohigh-rise buildings with a total of 334 one and two bedroom units. It is locatedeast of Oak Park Avenue and south of Fullerton Avenue. Rents range from $405-546 for very low-income one bedroom units and $687-829 for low-income onebedroom apartments. Rents for the two bedroom units are $996. The buildingsare well occupied with a long wait list. Few Oak Park residents moved herethough it is quite close to the village.
Melrose Commons is another LIHTC building that is part of a senior campus onNorth Avenue west of the Des Plaines River in Melrose Park. It has 95 one andtwo bedroom apartments with rents ranging from $665-955. The building is full.A small number of residents moved from Oak Park. Most previously lived inMelrose Park, Elmwood Park and Berwyn.
5. Supportive Living Near but Outside the Market Area
Supportive living facilities (SLFs) are assisted living facilities for those withincomes less than $30,000, but they also have some residents able to pay marketrates. The SLF program is administered by the Illinois Department of Healthcare
and Family Services and is designed to keep seniors in need of some assistancewith activities of daily living out of nursing homes and in less institutionalsettings. Residents with incomes below $30,000 pay all but $90 of their monthlyincome in rent. Market rate residents pay $2,600-2,800 in rent. If a market rateresident spends down his or her assets, she is then converted to the SLFs low-income program. In comparison, if a resident of a private assisted living facilitycan no longer afford the rent, he or she will most likely have to move.
There are two SLFs near but outside of the market area, Victory Centre ofGalewoodand Victory Centre of River Woods. Both buildings provide three dailymeals and assistance with activities of daily living. Victory Centre of Galewood
has 102 units and is located on Grand Avenue and Newcastle in the Galewoodneighborhood of Chicago. It opened in February 2009 and is projected to be fullyleased within a year of opening. Despite the proximity to Oak Park, most of theresidents are from the northwest side of Chicago and it has not attracted residentsfrom Oak Park.
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Victory Centre of River Woods is located in Melrose Park on North Avenueadjacent to Melrose Commons. It has 109 units with 129 beds and its occupancyis approximately 90%. It has attracted some, though not many, residents fromOak Park.
6. Planned Senior Housing
At the present time there are no planned senior housing projects in Oak Park. TheIllinois Housing Development Authority (IHDA) accepted preliminaryapplications for LIHTCs in February 2010 and on March 18, 2010, released a listof projects eligible to submit full applications in May 2010. On that list are twoprojects in the SMA. Forest Park Senior Housing at 7400 W. Harrison Avenue isproposed for 96 units and The Renaissance at 7818 W. Grand Avenue inElmwood Park is proposed for 78 units. At this time, it is unknown if thedevelopers will apply for tax credits in May 2010 and if they do apply, whether
they will be approved.
The table and map on the following pages provide additional information about thesesenior buildings.
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Table 9
Name and Address Year # of Rental Range Square Average
Opened Units Unit Type $ Footage Rent/ S.F.
(Bed/Bath) ($)
AffordableMills Park Tower 1976 198 1 BR/1 BA 30% of Est. 650 NA
1025 Pleasant Place income
Oak Park
708-386-7536
Heritage House 1979 200
201 W. Lake Street 180 1 BR/1 BA 30% of NA NA
Oak Park 20 2 BR/1 BA income
708-848-1800
The Oaks 1980 74
114 S. Humphrey Renovated 11 Efficiency 30% of 420 NA
Oak Park 1928 63 1 BR/1 BA income 560 NA708-386-5812 hotel
Section 8 building. R
library, comm. room
screenings. Units ha
Draws primarily from
in eastern Oak Park.
person income $30,1
names. Less than ha
Chicago 60644, 606
some bathroom reno
for electric heat and
SENIOR HOUSING IN AND NEAR OAK PARK
High rise located ne
tub . Common area
vending machines, g
agency on-site. Poli
window AC unit. Ele
stove and fridge, liv
renovations to impro
setting back from str
income is $40,250; $
Social Security as in
Owned/managed by
residents receive pri
Section 202/8 bldg.
earn under $15,000.
laundry, medical clinCommon area renov
refrigerator, tenant c
receive priority. Wa
Adjacent to adult da
age range 60s-88. Ef
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Name and Address Year # of Rental Range Square Average
Opened Units Unit Type $ Footage Rent/ S.F.
(Bed/Bath) ($)
Belmont Village Nov. 2004 127 Companion $2,850
1035 Madison Studio 3,725 NA NA
Oak Park 1 BR 5,700 NA NA
708-848-7200
Secondary Market Area
Elmbrook Senior Residences 1999 727940 W. Grand 18 Studio 30% of 450 NA
Elmwood Park 53 1 BR/1 BA income 575 NA
708-583-1235
Altenheim in the Park 1885 56
7824 Madison Street Renovated 20 A Bldg
Forest Park 1997 4 Studio $967 NA NA
708-366-2206 1981 12 1 BR/1 BA 1,192 NA NA
4 2 BR 1,362 NA NA
36 B Bldg
8 Studio 561 NA NA
28 1 BR/1 BA 669 NA NA
SENIOR HOUSING IN AND NEAR OAK PARK
Section 8 building ww/kitchen, garden, p
accessible, PACE bu
stove, refrigerator, A
industry and railroad
Min. age 62 or in a w
person. 10 or 11 whe
Oak Park residents i
55+ senior building.
lunch included with
purchase these servi
refrigerator. Buildin
rooms/lounges, dinin
transportation to gropodiatrist. Residents
High demand for 2 b
but must pass health
Many residents mov
of themselves. Seco
Rent inc ludes 3 resta
cable except phone.
laundry. RN 24 hou
center, computers, s
Living asst. inc. in b
site. Extra fee for inc
fee is $850. 6- story
Community fee equa
with 47 beds. Possib
high occupancy.
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Name and Address Year # of Rental Range Square Average
Opened Units Unit Type $ Footage Rent/ S.F.
(Bed/Bath) ($)
Near but Outside Market AreaMontclare Senior Residences Phase I Dec. 153
6650 W. Belden 2001 47 1 BR/1 BA very low $405-546 573-631 $.71-0.86
Chicago 70 1 BR/1 BA low 687-829 573-631 1.19-1.31
36 2 BR/1 BA low 996 895 1.11
Montclare Senior Residences Phase II Sept 181
6650 W. Belden 2004 139 1BR/1 BA 687-829 573-693 1.19-1.31
Chicago 42 2BR/1 BA 996 895 1.11
773-237-3831
Melrose Commons 2003 95 1 BR/1 BA $665-830 NA NA
1750 Riverwoods Dr 2 BR/2 BA 785-955 NA NA
Melrose Park, IL 60160-1648
(708) 343-2265
Victory Centre of River Woods SLF Aug. 2003 109 Services include 3 d
1800 River Woods Drive 80 Studio low State 334-366 NA services, medication
Melrose Park 18 2 BR/1 BA low formula 642-660 NA transportation, socia
708-547-5800 9 Studio market $3,300-3,800 334-366 $9.88-10.38 room, physical thera
2 2 BR/1 BA market 4,400 642-660 6.67-6.85 o utdoor garden /p atio
bath, kitchen with fu11 market rate units
SENIOR HOUSING IN AND NEAR OAK PARK
Each unit has full ki
heat. Building has li
laundry, game room
transportation. Hous
must be at least 62 y
for one person or $3
residents from Oak P
& Berwyn.
LIHTC building with
room and kitchen, c
room, fitness center,
medical personnel.
microwave, carpet. R
stove), phone. Util
City of Chicago Gol
person max income
40% AMI units have
available. Residents
from Oak Park, estim
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Name and Address Year # of Rental Range Square Average
Opened Units Unit Type $ Footage Rent/ S.F.
(Bed/Bath) ($)
Victory Centre of Galewood SLF Feb. 2009 102 Bldg. has commerci2370 N. Newcastle 6 Studio 30% AMI State 375 NA day room, beauty sh
Chicago 21 Studio 40% AMI formula 375 NA family and guest me
35 Studio 50% AMI State 375 NA day, personal care at
16 Studio 60% AMI formula 375 NA health monitoring, tr
24 Studio Market $3,500 375 $9.33 Units have full bath,
microwave oven. O
primarily from Chic
NA Not Available
Source: Valerie S. Kretchmer Associates, Inc.
SENIOR HOUSING IN AND NEAR OAK PARK
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DeLorme Street Atlas USA 2010
Oak Park Area Senior Properties
Data use subject to license.
DeLorme. DeLorme Street Atlas USA 2010.
www.delorme.com
TN
MN (3.3W)
0 1
0 1 1 2
mikm
Scale 1 : 62,500
1" = 5,208.3 ft Data Zoom 11-6
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IV. SENIOR HOUSING SURVEY
VSKA prepared a telephone questionnaire designed to elicit information and opinions
from Oak Park Township seniors who do not currently reside in specifically designatedsenior housing. The intent of the survey was to ascertain their general interest in andpreferences for senior housing in Oak Park.
The draft survey was reviewed by Township and Village officials and revised based ontheir feedback. The Township publicized the upcoming survey through the localnewspapers, letters to the 1,145 names on its senior mailing list, and on the Townshipsweb site to improve participation. A copy of the survey is included in a separate reportthat has the full analysis of the results.
Surveyed residents were randomly selected and quotas were set by ZIP code so that the
results would be representative of different sections of Oak Park. Those already living inone of the existing senior buildings were not included in the survey. In total, 150 surveyswere completed.
Key findings are:
Over 60% of the respondents are not likely to move from their current home inthe next five years. Of the remainder who would consider a move or are not sureabout a move, 38% feel that it is extremely or very important to remain in OakPark.
The most frequently mentioned reasons for considering a move within the nextfive years are:Reduce the burden or cost of home ownershipDeclining healthDownsizing
For those who might consider a future move:36% would be interested in some type of senior-only housing64% would not be interested in some type of senior-only housing
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Of the 20 respondents interested in senior housing, the preferred housing typesalong with the number of responses are:
Independent senior building without meals 9
Independent senior building with meals 5Assisted living building with personal care and meals 4Nursing homes 2
The top factors that would affect where the 20 respondents interested in seniorhousing would move, along with the number of responses are:
Meals 7Transportation 6Cost 6Location 5
Close to shopping 4Housekeeping 3No stairs 2
Positive comments from the respondents about Oak Parks senior housing and thenumber of responses include:
Oak Park does a good/excellent job/pleased with it/find it adequate 8Know people who live in it and like it/are satisfied 7Buildings/facilities seem pleasant/nice 5Oak Park has senior facilities and many seniors live in senior housing 5
Negative comments about Oak Parks senior housing and the number of responsesinclude:
Low-income people have difficulty affording Oak Park housing 7Not enough senior housing in Oak Park 6Taxes too high/know people forced to move due to taxes 4Wouldnt want to live in Oak Park senior housing/prefer to live elsewhere 4
Respondents prefer two bedroom to one bedroom units.
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Given the small sample sizes, it is difficult to generalize; however, the survey seems toindicate that while Oak Park already has good quality senior housing and the majority ofseniors do not plan to move within the next five years, there may be an opportunity todevelop some additional housing for lower income seniors. This is shown by the top two
negative comments about the difficulty that lower income people have in affording OakPark housing and that there is not enough senior housing in Oak Park.
The full survey report contains a more detailed analysis of the survey responses.
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V. DEMAND FOR ADDITIONAL SENIOR HOUSING IN OAK PARK
A. Independent Living Penetration and Demand
As the above sections show, Oak Park is well served with high end, market rateindependent living. The low end of the spectrum is also well served with the threeproperties targeting very low-income residents. In order to assess demand for additionalsenior housing, VSKA analyzed the senior demographics, existing competition and theresults of the housing survey.
One measure of demand is the penetration rate of existing senior housing. It is anindication of the extent to which the existing buildings serve this population. It comparesthe number of senior households at different income levels to the number of seniorhousing units at different price points in Oak Park and the SMA.
Oak Park has a wide array of social services for seniors at all income levels to assist themwith chores, transportation, meals and activities that enable them to live in their ownhomes. Affluent seniors typically have more options than those with low incomes as theycan afford household help for cleaning, cooking and other activities of daily living beforeconsidering a move. Therefore, a relatively small share of seniors will move to age-restricted housing even when it is high quality and affordable. This is consistent with thefindings in the survey.
The market is often saturated when the penetration rate of existing senior housing isgreater than 15-20% of the age and income qualified population in a market area. In
these situations we would expect to see higher vacancy rates, incentives and/or rent orprice reductions at all or some properties. This is not the case in Oak Park. Current andprojected penetration rates are shown in Table 10.
Oak Park has 474 independent senior housing units in three buildings that are targeted tothose with incomes under $20,000, though they are able to rent to those with incomes thatare somewhat higher. They penetrate a very high 69% of the households age 65+ withincomes less than $20,000, indicating that the very low end of the senior housing marketis being adequately served.
There are no Low Income Housing Tax Credit (LIHTC) senior units in Oak Park. These
buildings typically attract those earning between $20,000 and $35,000. There are 500senior households in this income bracket who would be potential residents of a LIHTCbuilding in Oak Park.
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2009 2014
Oak Park Households 65 Years + 3,637 4,074
Total Households 65+ with Incomes under $20,000 684 704
Total Households 65+ with Incomes $20,000-34,999 504 476
Total Households 65+ with Incomes $35,000-49,999 470 483
Total Households 65+ with Incomes $50,000-74,999 545 634
Total Households 65+ with Incomes $75,000+ 1,434 1,777
Existing and Planned Affordable Independent Senior Units in Oak Park 474 474
69.3% 67.3%
Existing and Planned Low-Income Housing Tax Credit Units in Oak Park 0 0
Penet rat ion of Exis ting S enior Units of Households 65+ with Incomes $20,000-34,999 0% 0%
Existing and Planned Market Rate Independent Senior Units in Oak Park 312 312
13% 11%
Secondary Market Area Households 65 Years + 9,156 9,718
Total Households 65+ with Incomes under $20,000 1,754 1,713
Total Households 65+ with Incomes $20,000-34,999 1,788 1,692
Total Households 65+ with Incomes $35,000-49,999 1,381 1,360
Exist ing and Planned Affordable Independent S enior Units in Secondary Market Area 72 72
4.1% 4.2%
Exist ing and Planned Low-Income Housing Tax Credit Units i n Secondary Market Area 0 0
Penet rat ion of Exis tin g Sen ior Units o f Ho useho ld s 6 5+ with In comes $ 20 ,00 0-34 ,99 9 0.0% 0.0 %
Source: Valerie S. Kretchmer Associates, Inc. based on estimates & projections from Demographics Now.
Table 10
Penetration of Existing Market R ate Independent Senior Units of Households 65+ with
Incomes Over $35,000
Penetration of Existing Affordable Independent Senior Units of Households 65+ with
Incomes Under $20,000
OAK PARK AFFORDABLE INDEPENDENT LIVING PENETRATION ANALYSIS
Penetration of Existing Affordable Independent Senior Units of Households 65+ with
Incomes Under $20,000
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The 312 independent living market rate units are targeted to households earning over$35,000 and they penetrate 13% of the seniors in that income group at present. This is areasonable level and indicates the market is generally well served, though someadditional market rate units could be supported within a LIHTC building.
In the SMA, the 72 affordable units in Elmwood Park penetrate a very low 4% of thesenior households with incomes under $20,000. With such a low market penetration rateand no LIHTC units in the SMA, there is demand for more affordable senior apartmentsto serve this area as well as Oak Park.
VSKA also estimated the number of additional senior units that could be supported inOak Park based on the existing competition, demographics of the senior population andrealistic capture rates for a new building in Oak Park, as shown in Table 11 below.Typically a single building will not be able to capture more than 7% of the total demand,especially if there are other competing properties.
Table 11 presents a range of units that could be supported from residents of Oak Park,from those who live in the SMA and could be attracted to Oak Park, and from thoseliving outside of Oak Park and the SMA. The demand assumes a LIHTC buildingcatering to those with incomes from $20,000-34,999 that also has some market rate unitstargeted to those with incomes in the $35,000-49,999 range.
There is demand for approximately 40-50 units of housing targeted to those earning$20,000-50,000 currently living in Oak Park. However, an Oak Park location couldattract residents from River Forest, Forest Park, Berwyn and Elmwood Park who havefew affordable senior housing choices today. The senior population in the SMA is much
larger than in Oak Park, thus there is demand for twice the number of units from theSMA than from Oak Park in a LIHTC building. This assumes that the projects in ForestPark and Elmwood Park that may submit applications to the Illinois HousingDevelopment Authority do not move forward. They would reduce the demand from theSMA for a senior building in Oak Park.
With an estimated 25% of residents likely to move to a building in Oak Park from outsideof the village or SMA, the total demand could reach 161-216 units. This assumes aconvenient location within the village and a high quality building.
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Oak Park
Income Level $20,000-$34,999 6% 7% 6% 7%
Number of Households Over 65 504 504 476 476
Demand at 6-7% Capture 30 35 29 33
Income Level $35,000-$49,999 2% 3% 2% 3%
Number of Households Over 65 470 470 483 483
Demand at 2-3% Capture 9 14 10 14
Total Demand from Oak Park 40 49 38 48
Secondary Market Area
Income Level $20,000-$34,999 3% 4% 3% 4%
Number of Households Over 65 1,788 1,788 1,692 1,692
Demand at 3-4% Capture 54 72 51 68
Income Level $35,000-$49,999 2% 3% 2% 3%
Number of Households Over 65 1,381 1,381 1,360 1,360
Demand at 2-3% Capture 28 41 27 41
Total Demand from Secondary Market Area 81 113 78 108
40 54 39 52
Total Demand 161 216 155 208
Low Income Housing Tax Credit Demand 112 142 106 135
Market Rate Demand 49 74 49 74
Note: Numbers may not total due to rounding.
Source: Valerie S. Kretchmer Associates, Inc. based on estimates and projections from Demographics Now.
Table 11
POTENTIAL DEMAND FOR AFFORDABLE INDEPENDENT LIVING IN OAK PARK
(Based on Age and Income-Qualified Households in Oak Park and Secondary Market Area)
2014 Capture Rate
Additional Demand Assuming 25% of Residents come from
Outside of Oak Park and Secondary Market Area
2009 Capture Rate
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B. Assisted Living
VSKA also examined the demand for additional assisted living in Oak Park. The upperend of this market is well served with Belmont Village, Holley Court Terrace and Oak
Park Arms. The SMA has no assisted living facilities. As shown in Table 12 below, theexisting assisted living in Oak Park penetrates 26% of the population aged 75+ with sometype of disability that makes it difficult for them to live independently. This is arelatively high rate, indicating that the market is well served already and additional unitsare not supportable at this time.
2009 2014
Oak Park Population 75+ 2,735 2,713
Percent of Population 75+ with Disability* 50.9% 50.9%
Population 75+ with Disability 1,392 1,381
Oak Park Households 75 Years + 1 ,943 1 ,949
Percent with Incomes under $30,000 32.5% 29.1%
Percent with Incomes $30,000-49,999 17.2% 15.9%
Percent with Incomes $50,000-74,999 14.6% 14.6%
Percent with Incomes $75,000 35.7% 40.4%
Estimated Population 75+ with Disabilities with Incomes Under $30,000 453 403
Estimated Population 75+ with Disabili ties with Incomes $30,000-$49,999 240 219
Estimated Population 75+ with Disabili ties with Incomes $50,000-$74,999 203 202
Estimated Population 75+ with Disabili ties with Incomes $75,000+ 497 558
Existing and Planned Market Rate Assisted Living Units in Oak Park 183 183
Penetration of Existing and Planned Market Rate Assisted Living Units of Oak Park's
Population 75+ with Disabilities and Incomes $50,000+ 26.2% 24.1%
Existing and Planned Supportive Living Units in Oak Park 0 0
Penetration of Existing and Planned Supportive Living Units of Oak Park's Population 75+
with Disabilities and Incomes Under $30,000 0% 0%
* Based on U.S. Census for Oak Park.
Source: Valerie S. Kretchmer Associates, Inc. based on data from U. S. Census and Demographics Now.
OAK PARK ASSISTED LIVING PENETRATION ANALYSIS
Table 12
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Oak Park has no supportive living facilities serving low-income seniors in need ofassistance with activities of daily living. Two are located near but just outside of themarket area in Melrose Park and in the Galewood neighborhood of Chicago. Thesebuildings have attracted a few, but not many Oak Park residents. As such, there could be
support for some supportive living to serve the approximately 400 people age 75+ withincomes under $30,000 and in need of some assistance.
Supportive living facilities are licensed by the State Department of Healthcare andFamily Services. The department accepted applications for new licenses in 2009 andawarded 18 licenses throughout the state. None were near Oak Park. If their pastexperience is representative, the State is unlikely to accept applications for new licensesfor several more years. When the window is opened again, Oak Park could probablysupport a SLF as long as it also draws people from the SMA.
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VI. APPENDIX
Photos of Existing Senior Housing in and near Oak Park
Heritage House
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Mills Park Tower
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The Oaks
Oak Park Arms
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Holly Court Terrace
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Belmont Village
Altenheim in the Park
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Elmbrook Senior Residences
Melrose Commons
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Montclare Senior Residences
Victory Centre of River Woods SLF
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Victory Centre of Galewood SLF
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BLOCK AFFORDABLE
HOUSING CONSULTING,LLC
936 S. Kenilworth
Oak Park, IL 60304
708-705-6455
To: Gavin Morgan and David Boulanger, Oak Park Township
From: Chris Block, Block Affordable Housing Consulting, LLC
Date: August 31, 2010
Re: Financial Feasibility for Proposed Senior Housing in Oak Park Township
________________________________________________________________________________________________________
INTRODUCTION
Block Affordable Housing Consulting, LLC and Valerie S. Kretchmer Associates, Inc. wereretained by Oak Park Township to assess the financial feasibility of an affordable seniorbuilding of 50 or 100 units under the Low Income Housing Tax Credit program (LIHTC).This is a followup to the market study completed earlier this year. In order to determinethe feasibility of such a building, Block Affordable Housing Consulting researched land costsin Oak Park, identified development costs, financing sources, rents and expenses to preparepro formas for prototypical senior buildings of 50 and 100 units.
In addition, despite our earlier discussions where we envisioned running pro formas forboth 4% and 9% tax credit transactions, the 9% transactions were so financially strainedthat we determined that running them at 4% would be a purely academic exercise. In a 4%tax credit project, the equity raised through tax credits is approximately 60% lower than itwould be using 9% tax credits. This impacts the financial feasibility since the rents cannotbe increased enough to support a higher loan that would be required in place of the taxcredit equity. Maximum allowable rents are set by IHDA as well as the marketplace and theproposed rents for the tax credit eligible units are at the maximum allowable as of 2010.
SUMMARYANDCONCLUSIONS
Developing the project will be a significant challenge, and in direct contrast withconventional wisdom, the smaller 50unit project is more financially feasible. The smallerproject has a lower development cost, along with a much smaller Net Operating Income,resulting in a much smaller first mortgage. However, because the remaining financingsources are capped per project (sometimes in writing and sometimes in practice), theamount required in Cook County HOME funds for the 100unit building may be difficult toobtain. This means that it may not be possible to pull together all of the necessary financingsources for a larger project.
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A unit count somewhere between 50 and 100 would probably be preferable. If land costscan be reduced through a straight donation, a bargain sale or Village or Townshipassistance, the project would be able to generate additional equity through the IllinoisAffordable Housing Tax Credit Program. In addition, a reduction in land cost (which is anoneligible LIHTC expense), would help the projects feasibility significantly.
ASSUMPTIONS
Some of the main assumptions within the attached pro formas are discussed below.
Land
Relatively high land costs in Oak Park make building affordable housing a challenge. Eventhough land prices have come down in recent years, our research indicated that a realisticprice is $75/square foot for a site along Madison Street or Roosevelt Road, with higherprices in and near downtown. In addition, there are not many sites currently available of asufficient size to build 50 or 100 new units. This makes affordable senior housing deals
difficult to finance since the cost of land is not eligible for LIHTCs.
Units and Rents
Many aspects of the projects are more or less dictated by the Illinois Housing DevelopmentAuthoritys (IHDA) 2010 Qualified Allocation Plan (QAP). They are not absoluterequirements by IHDA, but if you hope to be competitive in the pursuit of the highly soughtafter 9% LIHTCs, a developer is wise to incorporate them into a project. One that impactsthe unit and resident mix is that 10% of the units are reserved for residents at 30% or lessof the Area Median Income (AMI). Another is that at least 10% of the units are marketrate and not subject to income guidelines. The last to impact unit and rent mix is that threetypes of units need to be included, with at least 10% of the units within each unit type.
With all of that in mind, the proposed unit and rent mixes for the two proposed projects areshown in the tables below.
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50-UNITBUILDINGUNITMIXANDRENTS
UnitType NumberofUnits AreaMedianIncome SquareFeet Rent
Studio 1 30% 450 $325
1 Bedroom 2 30% 600 $340
2 Bedroom 2 30% 800 $400
Studio 3 60% 450 $700
1 Bedroom 30 60% 600 $740
2 Bedroom 7 60% 800 $880
Studio 1 Market 450 $850
1 Bedroom 2 Market 600 $950
2 Bedroom 2 Market 800 $1,050
TOTAL 50
100-UNITBUILDINGUNITMIXANDRENTS
UnitType NumberofUnits AreaMedianIncome SquareFeet Rent
Studio 2 30% 450 $325
1 Bedroom 4 30% 600 $340
2 Bedroom 4 30% 800 $400
Studio 6 60% 450 $700
1 Bedroom 60 60% 600 $740
2 Bedroom 14 60% 800 $880
Studio 2 Market 450 $850
1 Bedroom 4 Market 600 $950
2 Bedroom 4 Market 800 $1,050
TOTAL 100
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Construction Costs
As mentioned above, the assumption is that land could be purchased for $75/square foot,and that a 50unit building could fit on a 25,000 square foot site and a 100unit buildingcould fit on a 35,000 square foot site. The building would probably be three or four stories,with a maximum of five. Obviously much more detailed work with an architect would need
to be done to verify these assumptions. Based on past projects, they should be safeassumptions, as long as parking requirements are reasonable at 0.5 spaces per unit.Residents of senior housing, especially those in an urban location, have far fewer cars thanresidents of nonage restricted apartments.
The construction costs were estimated at $120/square foot, and the building size wasestimated by taking the total square footage of the units and adding another 40% to thatfigure to account for common space such as community rooms, hallways, administrationoffices and laundry room(s).
Financing Sources
Nearly half of the financing sources under both scenarios would come from the sale ofLIHTCs that need to be awarded by IHDA in a competitive process. In addition, in eachscenario, IHDA would need to contribute their maximum allowable amounts of HOME andAffordable Housing Trust Fund loans. Each scenario would also need Cook County tocontribute a HOME loan, and the Illinois Department of Commerce and EconomicOpportunity to award an energy grant that is available to environmentally responsibleprojects. Lastly each scenario requires a grant from the Federal Home Loan Banks AHP(Affordable Housing) program. Combining and coordinating all of these financing sources isan understandably difficult task, and a developer with a long track record of successfulaffordable buildings is needed to complete the task.
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Proposed Oak Park Township Senior Housing 50 Units
DEBTSource Amount Term (Years) Amortization (Years) Interest Rate Debt Ser
Conventional First Mortgage 380,000 15 35 7.00% 29,
IHDA HOME 2,000,000 40 40 1.00% 20,IHDA Trust Fund 1,250,000 40 40 1.00% 12,
Cook HOME 1,600,000 40 40 1.00% 48,
DCEO Grant 150,000
FHLB-AHP Grant 300,000
Total 5,680,000 TOTAL Debt Service 110,
EQUITYSource Amount Raise
LIHTC 4,639,145 0.70
DEFERRED FEE
Source AmountGeneral Partner 338,669
TOTAL $10,657,814
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Proposed Oak Park Township Senior Housing 50 Units
Tax Credits
Acquisition Total Depreciable 9%
Land 1,875,000
SubTotal 1,875,000
Construction
New Construction/Rehab 5,283,600 5,283,600 5,283,600
Demolition 100,000
Off-Site Work
General Requirements 317,016 317,016 317,016
Builders Profit 317,016 317,016 317,016
Builders Overhead 105,672 105,672 105,672
FF & E - - -Performance Bond & Builders Risk 55,000 55,000 55,000
Construction Contingency 301,165 301,165 301,165
SubTotal 6,479,469
Third Parties
Legal-Transaction 75,000 75,000 37,500
Engineering 45,000 45,000 45,000
Cost certification 30,000
Appraisal 9,000 9,000 9,000
Market Study 9,000 9,000 9,000
Environmental 6,000 6,000 6,000
Survey 9,000 9,000 9,000
Title 20,000 18,000 18,000
Soils Test 15,000 15,000 15,000
Architect-Design 211,344 211,344 211,344
Architect- Supervision & Reimbursables 21,134 21,134 21,134
Building Permits 132,090 132,090 132,090
Utility Tap Fees - -
Impact Fees - - -
TIF Consultant
Consultant Fees - - -Construction Period Insurance 15,000 15,000 15,000
Construction Period RE Taxes 20,000 20,000 20,000
Developer Fee 1,050,000 1,050,000 1,050,000
Soft Cost Contingency 25,000 25,000 25,000
SubTotal 1,692,568
Financing
Permanent Loan Origination Fees/Points 7,600
Construction Inspection Fees 1,900 1,900 1,900
Mortgage Insurance (MIP) - - -
Permanent Loan Examination Fee -
Permanent Loan Title & Recording
Permanent Loan Legal (Bank) 25,000
Bond Premium & Cost of Issuance -
Loan Credit Enhancement
Letter of Credit Fees
Credit Report
Construction Period Interest 208,762 208,762
SubTotal 243,262
Tax Credits & Syndication
Tax Credit Fees (Application) 500
Green Inspection Fee -
Tax Credit Reservation Fee 66,280
Tax Credit Compliance/Monitoring Fees -
Organizational Fees (Developer) 15,000
Legal Fees (Developer) 25,000
Syndicator Legal 15,000
SubTotal 121,780
Reserves
Initial Operating Deficit 40,130
Operating Reserve 105,604
Medicaid Delay Reserve (4 months) -
Working Capital -
Replacement Reserve 25,000
Insurance Escrow 15,000
RE Tax Escrow 40,000
Marketing 20,000
SubTotal 245,734
Total Development Cost 10,657,813 8,041,938 - 8,213,199
Total Development Cost Per Unit 213,156
Cost Per SF 220
- Historic Tax Credits
- Grants
= Estimated Eligible Basis - 8,213,199
Qualified Census Tract No 1.00 1.00
x 1.3 for High Cost Adjustment - 8,213,199
x Applicable Fraction 90% 90%
= Qualified Basis - 7,364,458
x Tax Credit Rate 0.034 0.0900
= Tax Credit Allocation - 662,801
Total Annual Allocation 662,801
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Proposed Oak Park Township Senior Housing 50 Units
Max Allow. 95
# of units Unit Type Square Feet Total Square Feet AMI Base Rent Util Allowance* Gross Rent Rent A
1 Studios 450 450 30% 325$ 48$ 373$ 394$ $
2 1BR 600 1,200 30% 340$ 60$ 400$ 422$ $
2 2BR 800 1,600 30% 400$ 80$ 480$ 507$ $
3 Studios 450 1,350 60% 700$ 48$ 748$ 790$ $
30 1BR 600 18,000 60% 740$ 60$ 800$ 845$ $ 7 2BR 800 5,600 60% 880$ 80$ 960$ 1,015$ $
1 Studios 450 450 Market 850$ 48$ 898$
2 1BR 600 1,200 Market 950$ 60$ 1,010$ 2 2BR 800 1,600 Market 1,050$ 80$ 1,130$
50 31,450
Applicable Fraction Calculation
Total Units Total Residential SF
50 31,450Low Income Units 45 28,200 Low Income SF
90.00% 89.67%
89.67%
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Proposed Oak Park Township Senior Housing 50 Units
Income
Gross Potential Rents - Residential 445,380
Other Residential Income- Misc. 4,000
Gross Income - Residential 449,380
Vacancy and Uncollectable 6% 26,963Rental Allowance
Effective Gross Income - Residential 422,417
Gross Potential Rents - Commercial
Vacancy and Uncollectable 25% -
Effective Gross Income - Commercial -
Other Income
Effective Gross Income (EGI) 422,417
Administrative Expense
Management Fee 5% 21,121
Administrative Salaries 52,000
Office Expense 12,000
Legal/Accounting 12,000
Advertising/Marketing 2,000
LIHTC & IAHTC Compliance Fees 1,250
Total Administrative Expense 100,371
Operating Expense
Operating Expense Salaries -
Janitorial Supplies 3,000
Cable TV Expense 5,000
Exterminating 3,000
Rubbish Removal 8,000
Total Operating Expense 19,000
Maintenance Expense
Maintenance Salaries 45,500
Security Expense -
Maintenance Supplies 5,000
Grounds and Pool Maintenance 2,500
Elevator Maintenance 6,000
Heating and Air Conditioning Maintenance 4,000Plumbing and Electrical Maintenance 4,200
Painting, Decorating, Carpeting 3,240
Misc. -
Total Maintenance Expense 70,440
Utilities
Gas/Fuel Oil 15,000
Electric 5,000
Water/Sewer 15,000
Total Utility Expense 35,000
Taxes, Insurance
Real Estate Taxes 40,000
Insurance 15,000
Total Taxes and Insurance 55,000
Reserves
Replacement Reserve 15,000
FF&E Reserve (Furniture, Fixtures and Equipment) -
Tax and Insurance Escrow
Operating Reserve
Total Reserves 15,000
Total Expenses 294,811 5,896
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Proposed Oak Park Township Senior Housing 100 Units
DEBTSource Amount Term (Years) Amortization (Years) Interest Rate De
Conventional First Mortgage 2,975,000 15 35 7.00%
IHDA HOME 2,000,000 40 40 1.00%
IHDA Trust Fund 1,250,000 40 40 1.00%Cook County HOME 3,150,000 40 40 1.00%
DCEO Grant 250,000
FHLB-AHP Grant 300,000
Total 9,925,000 TOTAL Debt Service
EQUITYSource Amount Raise
LIHTC 9,011,371 0.70
DEFERRED FEESource Amount
General Partner 550,683
TOTAL $19,487,054
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Proposed Oak Park Township Senior Housing 100 Units
Tax Credits
Acquisition Total Depreciable 9%
Land 2,625,000
SubTotal 2,625,000
Construction
New Construction/Rehab 10,567,200 10,567,200 10,567,200
Demolition 125,000 -
Off-Site Work
General Requirements 634,032 634,032 634,032
Builders Profit 634,032 634,032 634,032Builders Overhead 211,344 211,344 211,344
FF & E - - -
Performance Bond & Builders Risk 55,000 55,000 55,000
Construction Contingency 602,330 602,330 602,330
SubTotal 12,828,938
Third Parties
Legal-Transaction 75,000 75,000 37,500
Engineering 45,000 45,000 45,000
Cost certification 30,000
Appraisal 9,000 9,000 9,000
Market Study 9,000 9,000 9,000
Environmental 6,000 6,000 6,000
Survey 9,000 9,000 9,000
Title 20,000 18,000 18,000
Soils Test 15,000 15,000 15,000
Architect-Design 369,852 369,852 369,852
Architect- Supervision & Reimburseables 36,985 36,985 36,985
Building Permits 264,180 264,180 264,180
Utility Tap Fees - -
Impact Fees - - -
TIF Consultant
Consultant Fees - - -
Construction Period Insurance 25,000 25,000 25,000
Construction Period RE Taxes 40,000 40,000 40,000
Developer Fee 1,920,000 1,920,000 1,920,000
Soft Cost Contingency 25,000 25,000 25,000
SubTotal 2,899,017
Financing
Permanent Loan Origination Fees/Points 59,500
Construction Inspection Fees 14,875 14,875 14,875
Mortgage Insurance (MIP) - - -
Permanent Loan Examination Fee -
Permanent Loan Title & Recording
Permanent Loan Legal (Bank) 25,000
Bond Premium & Cost of Issuance -
Loan Credit Enhancement
Letter of Credit Fees
Credit Report
Construction Period Interest 405,512 405,512
SubTotal 504,887
Tax Credits & SyndicationTax Credit Fees (Application) 500
Green Inspection Fee -
Tax Credit Reservation Fee 128,747
Tax Credit Compliance/Monitoring Fees -
Organizational Fees (Developer) 15,000
Legal Fees (Developer) 25,000
Syndicator Legal 15,000
SubTotal 184,247
Reserves
Initial Operating Deficit 53,757
Operating Reserve 211,209
Medicaid Delay Reserve (4 months) -
Working Capital -
Replacement Reserve 50,000
Insurance Escrow 25,000
RE Tax Escrow 80,000
Marketing 25,000
SubTotal 444,965
Total Development Cost 19,487,054 15,585,831 - 15,953,842
Total Development Cost Per Unit 194,871
Cost Per SF 201
- Historic Tax Credits
- Grants
= Estimated Eligible Basis - 15,953,842
Qualified Census Tract N 1.00 1.00
x 1.3 for High Cost Adjustment - 15,953,842
x Applicable Fraction 90% 90%
= Qualified Basis - 14,305,194
x Tax Credit Rate 0.034 0.0900
= Tax Credit Allocation - 1,287,467
Total Annual Allocation 1,287,467
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Proposed Oak Park Township Senior Housing 100 Units
Max. Allow. 9
# of units Unit Type Sq Ft Total Square Feet AMI Base Rent Util Allowance* Gross Rent Rent A
2 Studios 450 900 30% 325$ 48 373$ 394$ $
4 1BR 600 2,400 30% 340$ 60 400$ 422$ $
4 2BR 800 3,200 30% 400$ 80 480$ 507$ $
6 Studios 450 2,700 60% 700$ 48 748$ 790$ $60 1BR 600 36,000 60% 740$ 60 800$ 845$ $
14 2BR 800 11,200 60% 880$ 80 960$ 1,015$ $
2 Studios 450 900 Mkt 850$ 48 898$
4 1BR 600 2,400 Mkt 950$ 60 1,010$ 4 2BR 800 3,200 Mkt 1,050$ 80 1,130$
100 62,900
Applicable Fraction Calculation
Total Units Total Res Ft
100 62900
Low Income U 90 56400 Low Income SF90.00% 89.67%
89.67%
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Proposed Oak Park Township Senior Housing 100 Units
Income
Gross Potential Rents - Residential 890,760
Other Residential Income- Misc. 8,000
Gross Income - Residential 898,760
Vacancy and Uncollectable 6% 53,926
Rental AllowanceEffective Gross Income - Residential 844,834
Gross Potential Rents - Commercial
Vacancy and Uncollectable 25% -
Effective Gross Income - Commercial -
Other Income
Effective Gross Income (EGI) 844,834
Administrative Expense
Management Fee 5% 42,242
Administrative Salaries 52,000
Office Expense 14,000
Legal/Accounting 12,000
Advertising/Marketing 2,500
LIHTC & IAHTC Compliance Fees 2,500
Total Administrative Expense 125,242
Operating Expense
Operating Expense Salaries -
Janitorial Supplies 5,000
Cable TV Expense 7,000
Exterminating 6,000
Rubbish Removal 12,000
Total Operating Expense 30,000
Maintenance Expense
Maintenance Salaries 45,500
Security Expense -
Maintenance Supplies 8,000
Grounds and Pool Maintenance 3,000
Elevator Maintenance 6,000
Heating and Air Conditioning Maintenance 7,000
Plumbing and Electrical Maintenance 7,500Painting, Decorating, Carpeting 5,500
Misc. -
Total Maintenance Expense 82,500
Utilities
Gas/Fuel Oil 25,000
Electric 10,000
Water/Sewer 25,000
Total Utility Expense 60,000
Taxes, Insurance
Real Estate Taxes 80,000
Insurance 25,000
Total Taxes and Insurance 105,000
ReservesReplacement Reserve 30,000
FF&E Reserve (Furniture, Fixtures and Equipment) -
Tax and Insurance Escrow
Operating Reserve
Total Reserves 30,000
Total Expenses 432,742 4,327
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Memorandum
To: Board Members of the Village of Oak Park and the Oak Park Housing Authority
From: Township Supervisor and Board of Trustees
Re: Senior Housing Market Study Presentation, May 11, 2010
Date: April 30, 2010
Oak Park Township, in partnership with the Village of Oak Park and the Oak Park Housing
Authority, utilized funding from the Illinois Department of Commerce and Economic
Opportunity to engage Valerie S. Kretchmer Associates, Inc. (VSKA) to prepare a market
analysis, including a survey of seniors living in Oak Park, to determine whether there is a
demand for additional senior housing in Oak Park.
VSKA conducted the following for this assignment:
Met with staff from Oak Park Township, the Village of Oak Park, and the Oak Park
Housing Authority Visited all of the senior buildings in and near Oak Park and interviewed their managers or
marketing staff
Contacted nearby communities to see if there are any planned senior buildings
Contacted senior service providers in Oak Park
Prepared a demographic analysis of the senior population in and near Oak Park
Conducted a telephone survey of Oak Park seniors not currently living in designated
senior housing
Determined the demand for additional senior housing by type in Oak Park.
The attached report incorporates the results of these activities. In addition to the report, Valerie
Kretchmer of VSKA will attend the regular meeting of the Township Board of Trustees on May11, 2010 at 7:00pm in the Township Board Room, 105 S Oak Park Avenue to discuss the
findings of the study. The Township Board of Trustees would like to invite the members of the
Village Board and the Housing Authority Board to attend the meeting to hear the presentation
and discuss the study.
After the presentation and discussion, the Township Board will decide whether to commission a
pro forma study of options for a new affordable housing development in Oak Park. The input of
board members from the other units involved in the market analysis would be welcome and
encouraged.
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