Charlotte sees boom in development for senior living

The Charlotte Post, Ashley Fahey, March 29, 2019Aldersgate Website

One of the largest generations today — baby boomers — have already entered or will soon enter the 65-plus age bracket.

It’s projected that not only will the U.S. senior population rise dramatically over the next decade or so, but the number of seniors will eventually outnumber just about any other age group, putting increased pressure on housing, medical care and other needs tailored to that demographic.

“Ten thousand folks a day are turning 65 in the next 18 to 19 years,” said Suzanne Pugh, president and CEO of Aldersgate, a senior living community in east Charlotte. “In less than 20 years, 20% to 25% of the population is going to be over 65, which has never happened before.”

Today, the 65-plus population in Mecklenburg County comprises about 10% of all residents, according to county and U.S. Census data — lower than North Carolina and the United States, both of which are about 15%. But the number of older adults here and elsewhere continues to rise quickly — the senior population grew 3% annually here from 2000 to 2010, according to Mecklenburg County data.

Senior housing has also become a more attractive sector for commercial real estate investment, in direct response to changing demographics nationally.

A CBRE report from last year notes that private-equity buyers and REITS have entered the senior housing and care space more aggressively in recent years, accounting for 77% of all transaction activity in that sector in 2018. The report also noted that senior housing continues to provide a yield premium over conventional multifamily investment.

In response, Charlotte senior communities like Aldersgate — once called continuing-care retirement communities but now more commonly referred to as “life plan” communities — are investing hundreds of millions in expansions to address not only the rapid influx of seniors but also changes in lifestyle preferences.

Aldersgate recently wrapped up a $90 million expansion at its 231-acre campus, including a new health and rehabilitation center and 68 independent-living units. The nonprofit this month filed to rezone a 11-acre site on Providence Road at Shalom Park in south Charlotte, where Aldersgate seeks to build a satellite campus that will include up to 150 independent-living units and 32 assisted-living and memory care-assisted units, in partnership with the Foundation of Shalom Park, the nonprofit that owns and manages the park.

Should rezoning be approved, the goal would be to begin construction by the fall of 2021 after pre-selling at least 70% of the units, Pugh said. Delivery is currently projected for the fall of 2023.

Most of the programming at that proposed campus would be connected to existing Shalom Park entities, including the Jewish community center on site, but residents of all faiths would be eligible to reside there, Pugh said.

Elsewhere in south Charlotte, retirement community Southminster on Park Road is underway on its largest expansion to date that will include a 200,000-square-foot, 85-bed health center; 25 assisted-living apartments and 60 skilled nursing rooms. The investment will total at least $120 million and will be the campus’ first expansion since 2008.

“Since coming out of the recession, we have enjoyed the longest sustained run of full occupancy since our founding,” said Stewart Wiley, director of sales and marketing at Southminster. Today, the community has a waitlist with more than 600 names, and the first phase of units in the latest expansion were under contract within four months.

The new Southminster health center will account for about half of the total expected investment. Existing health-care facilities on site have been renovated over the years but expansion is limited because of outdated building design, Wiley said. The renovations will include an enhanced clinic area, secured private access to Levine & Dickson Hospice House and a newly designed 12-bed inpatient community. Residences at Southminster are being designed in a “small-house model,” which clusters a limited number of residents in a common area, like a neighborhood, Wiley said.

The first phase of residential units, under construction now at Southminster, will open in May while a second phase, which broke ground in the fall, is expected to open in July 2020. The health center will deliver a couple months afterward, likely by September 2020, Wiley said.

Aldersgate and Southminster are among local life plan communities that are also looking at how to extend their reach beyond their campuses, including health-care services at home or providing services like nutritional support, IT support or transportation.

“The largest demographic (of seniors) will remain in their houses,” Wiley said. “We serve an overwhelming small percentage so the greater needs are for those who aren’t able to move or who don’t want to move into a life plan community.”

Telemedicine is likely to become a bigger play for seniors as technology advances, Pugh said, but she added Medicare currently doesn’t cover most telemedicine services, with the exception of very rural areas.

In SouthPark, Sharon Towers last year rezoned its site at Sharon and Sharon View roads to allow expansion and renovation — and to better reflect what the boomer generation is seeking in senior housing.

For most of its 50-year history, Sharon Towers has been isolated from surrounding communities, said Anne Moffat, president and CEO at Sharon Towers. In fact, leadership at the nonprofit considered making Sharon Towers a gated community about five or six years ago. But more recent research has suggested that the incoming senior population would prefer to be better integrated with the community and area amenities, Moffat said.

“We have changed over 50 years to meet consumer expectations,” she continued. “The difference now, I think, is that this is a much bigger shift for us in look and philosophy.”

The updated master plan for Sharon Towers, partially aligned with an Urban Land Institute study of SouthPark in 2016, calls for better walkability to nearby retail and services, a greater mixture of on-site amenities that both the general public and residents can use as well as more housing to meet demand.

Sharon Towers won rezoning last summer to build up to 130 age-restricted units, indoor recreation and performance space, and up to 22,000 square feet of retail and commercial space on the campus. Moffat said the project will be divided into two phases; the first phase, with an estimated price tag of $100 million, will include renovating existing health-care and amenity spaces, adding 46 independent-living units, and infrastructure projects like building a new sidewalk to Hazelton Drive and fixing the much-maligned intersection outside of the campus. Construction is hoped to begin later this year, with the first phase delivering by 2022.

“Inter-generational” uses have become a bit of a buzzy term among those in the industry. Traditionally, seniors have been somewhat segregated within private communities, but new programs and development aim to get them involved with younger people or get non-seniors onto their campuses.

Pugh said more education and exposure to seniors at an early age may help propel people into industries that support seniors, expected to be a pressing demand in years to come as the population aged 65 and older continues to grow.

“There is such a gap,” she continued. “We’re highly unprepared for what we’re just beginning to face with older adults.”


Affordable housing continues to be one of the most pressing issues facing Charlotte and other growing U.S. metros today.

But age-restricted affordable housing is expected to see accelerated pressure and demand as boomers age, particularly low-income seniors that may no longer be able to live in a home independently but cannot afford to move into oftentimes-expensive retirement communities.

Aging-in-place has become a more prevalent trend, those in the senior housing and development industry observe. Low-income seniors can qualify for tax abatement exceptions on single-family homes or participate in philanthropic programs or clinics that provide aid for seniors. But for elderly renters or those who can no longer live independently in a home, the situation becomes bleaker.

According to a 2014 study by Harvard University, the number of senior households eligible for rental assistance was expected to increase by 1.3 million between 2011 and 2020 and another 1.3 million between 2020 and 2030.

“We have so few tools,” said Julie Porter, president at the Charlotte Mecklenburg Housing Partnership, which develops affordable housing, including age-restricted units. “You absolutely have to have tax credits for high-quality (affordable housing) for seniors. … if there’s no (income) restrictions on a property, the rent is not going to stay affordable for very long.”

Age-restricted housing is eligible to receive federal low-income housing tax credits just like any other affordable housing development, and all types of projects are in competition for the same credits. The U.S. Department of Housing and Urban Development has a Section 202 program that provides capital advances to finance constructing, rehabbing or acquiring housing for very low-income seniors, but funding for that program has diminished dramatically and HUD 202 funds have not been allocated for construction of new units in recent years.

When deciding where to build senior affordable housing versus income-restricted housing for families, Porter said geography is an important factor. In high-opportunity areas near good schools and jobs, the Housing Partnership will prioritize affordable housing for families because that will help boost economic mobility, Porter said. But some older neighborhoods and suburban areas, including towns outside of Charlotte like Matthews and Mint Hill, tend to be good locales for building senior affordable housing.

Laurel Street, which also builds mixed-income housing for families and seniors, currently has a rezoning petition out to build up to 90 senior housing units on Mallard Creek Road.

“This population is growing almost twice as fast as the rate of the millennials,” said Dionne Nelson, president and CEO at Laurel Street, during a public hearing for the project at a City Council meeting earlier this month.

City staff currently recommends denial of the petition because the area plan recommends a significantly lower density than what’s called for in the proposed rezoning (27 units per acre compared to the recommended 6 units per acre). Dave Pettine, rezoning program manager at the city, noted at the meeting that staff makes its recommendation based on land use and area plans, which don’t take into account whether a proposal includes things like affordable housing.

Laurel Street’s proposed project wouldn’t require any public subsidy, Nelson said at the meeting. But allowing a much higher density on the land, which measures about 3.3 acres, would be necessary to make the project financially feasible.

“The reality is, part of Charlotte’s affordability problem is land cost,” Nelson said. “The only way to reduce the density would be to be on a parcel of 5 acres or more, and artificially raise our land cost. If we’re going to provide housing at moderate rates, we have to look for opportunities to minimize costs wherever we can.”

Pugh said Aldersgate is currently considering ways to build affordable senior housing on its campus in the future, which would be a shift for the fairly affluent community.

“It’s kind of been our culture for the last five years that no idea is off the table as we consider the needs of elders moving forward,” Pugh said. “If we don’t consider more affordable options, then we are going to have an epidemic of elder homelessness.”