PLEASANTON, CALIF. - The curved emerald lawns at The Parkview beckon seniors and their guests inside a lobby with a high ceiling, a glossy piano, and plenty of California light pouring in from windows.
“One resident told me, ‘I never thought I’d live like this in my life,’” said Sylvia Zaininger, administrator for Eskaton, the nonprofit firm that provides services for the seniors at this assisted-living development. “She said she lives like a queen.”
The Parkview, located in this city about 38 miles from San Francisco, is a 105-unit assisted-living development for seniors. Thirty-one of the units are set aside for seniors with extremely low and very low incomes—up to 25 percent and 50 percent of the AMI, respectively.
“I am still surprised that a lot of people don’t get how rare an affordable assisted-living project is,” said Lisa Grady, senior project manager for The Parkview’s developer, San Francisco-based BRIDGE Housing Corporation.
Creating affordable assisted living without operating subsidies is challenging, given the extraordinarily high operating costs associated with such a project. In this case, the rents on the market-rate units—$3,700 a month for a studio, up to $7,175 a month for a two-bedroom unit—help reduce the rents on the affordable units. Those rents are competitive for assisted living, said Grady. It was important to attract seniors looking for a high standard of living.
Grady has led The Parkview’s development, including working with architects and city officials, and pulling all the financing together. It was an 11-year odyssey to develop the project from start to finish. The Parkview is spread out over 3.59 acres with sloping lawns and serene courtyards. Think humble-yet-cheerful hacienda meets resort-style apartments.
“We really wanted the apartments to appeal to a wide variety of incomes,” said Grady. “We think we’ve succeeded. The project appeals to seniors expecting a little bit of luxury.”
At the same time, seniors with extremely low incomes get to live as they never thought possible.
What took so long to get the ball rolling? Grady had problems finding a lender. “Lenders find affordable assisted living to be dodgy,” said Grady. BRIDGE Housing finally went with Citibank.
Twenty-two units are targeted to seniors earning up to 50 percent of the AMI. Nine units are reserved for seniors with incomes up to 25 percent of the AMI. The remaining 74 units are designated as market-rate units. Monthly affordable rents range from $978 to $1,957. These rents include all the assisted-living services The Parkview provides: Weekly housekeeping, transportation to appointments, personalized care plans, three daily meals and snacks, medication management, and more. The Parkview is adjacent to the Pleasanton Senior Center.
The project includes 19 memory-care studios for seniors who need special care. “A lot of seniors lose their capability to remember how to take care of basic needs,” said Grady. “In many cases, these seniors compensate by becoming even more physical. They take a lot of walks, for example. So we designed an interior courtyard for them.”
All the memory-care studios are housed in a separate wing with controlled access.
The city of Pleasanton donated the parcel of land for the project through a long-term ground lease for $1 a year. The city also provided two residual receipts loans: One for $2.49 million from the city’s housing fund and one for $1.5 million, using funds borrowed from the California Housing Finance Agency and re-lent to the project. Citibank provided construction financing of $19.7 million.
The competitive market rents cover the costs of the affordable units, debt service on the Citibank bonds, management fees to the operator, and required reserve deposits.
Additional project information, as provided in application by the nominator.
Q. Why does the nominated project deserve to be recognized based on the award criteria of this contest?
A. The Parkview, a 105-unit, mixed-income assisted living community, is an innovative response to a significant and growing gap in the affordable housing continuum: the near absence of critically needed affordable assisted living units. The significance of this development is the creation of 31 assisted-living units, including one memory-care unit, that are available to seniors at 50 percent of the area median income (AMI), and at 25 percent of the AMI.
What sets The Parkview apart is the level of affordability, and the fact that the affordable rents cover not only the cost of housing but also assisted living services. This is an unprecedented level of affordability, at 220 percent and 440 percent below comparable market rents, and particularly so given the absence of operating subsidies to provide assisted living services to low-income seniors. While there are a growing number of affordable assisted living communities being developed in states where Medicaid Waivers provide operating subsidies, in California, the nation’s most populous state, there is no Medicaid Waiver and therefore virtually no affordable assisted living options for low-income seniors.
Creating affordable assisted living without operating subsidies is a significant challenge given the extraordinarily high operating costs associated with providing assisted living services. Typical approaches to creating affordable housing have not been successful in creating affordable assisted living because the operating costs are so much higher.
The high level of affordability at The Parkview is being created through a combination of direct capital subsidies in the form of approximately $4 million in residual receipts debt, the contribution of the city’s land, and our ability to command high market rents. Those elements allow us to collect affordable rents that do not cover the basic cost of operating the affordable units. All additional service costs for these units and the cost to pay debt service on the bonds, management fees to the operator and required reserve deposits are being covered by the market rate units.
The Parkview also represents a significant civic collaboration. The project was conceived by a group of dedicated civic leaders—both elected officials and community members—to close the gap they saw in the affordable housing continuum. By donating a valuable piece of land in a location that is optimally suited for an assisted living facility (the site is immediately adjacent the city’s Senior Center, a city park, and a commercial shopping center), and leveraging its land and its other financial contributions, the city facilitated a project that achieves an unparalleled level of affordability.
Demographic trends provide clear evidence of a growing senior population, particularly seniors over the age of 85. Without access to affordable assisted living, this growing population of frail seniors will continue to be inappropriately housed, either in independent living or in skilled nursing. The Parkview demonstrates that it is possible to create deeply affordable assisted living through the combination of a mixed income rent structure and capital subsidies.
Q. How does this project represent an innovative solution to a specific development challenge?
A. The Parkview addresses a glaring gap in the spectrum of affordable housing by providing low-income seniors access to affordable assisted living. The Parkview accomplishes something that few other developments in the state of California have been able to achieve: to provide access to a level of assistance that has eluded California’s low-income senior population. While there are many independent affordable senior living communities, there are an infinitesimal number of affordable assisted living units. Further, there is no consistent model in California available to significantly expand needed access to assisted living for low-income seniors. The Parkview is a model replicable in other markets, offering critically needed assisted living for the many frail seniors who are not able to pay market rate, or even affordable rates in some facilities for the level of service being provided at the Parkview.
The number of affordable units of assisted living is virtually undetectable in the state due to the fact that California does not have a Medicaid Waiver, except under a limited pilot program in the California counties. Sponsorshave been unable to provide this type of living environment. As a result, many low-income seniors live in independent settings that are inappropriate and even dangerous. Until seniors qualify for skilled nursing, which is subsidized by Medicaid, they are forced to live in a setting that their frailty no longer makes possible.
The Parkview’s success and innovation lie in our ability to operate a successful market-rate community that also seamlessly integrates low-income seniors. By remaining a first-choice market-rate facility, we will continue to command high market rents that help pay to provide a similar level of services at a reduced cost to low-income seniors.