A housing-construction boom is under way in the Valley as developers tap into what might be the only sure-fire market around -- seniors who need a cheap place to live.
While the traditional building industry is still in a slump, nonprofit developers have hit the gas on affordable senior housing projects.
In the past four months, ground was broken on two affordable senior housing projects in Fresno and Clovis. Construction on another is expected to start by the end of the year, and yet another is in the pipeline as it waits for federal funding.
The area hasn't seen this kind of project in three years. The developments will add 318 new affordable senior apartment units and four new senior developments to the area. One of the developers already has plans to build more.
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"Affordable housing is probably one of the biggest things that has been going on in the downturn," said Craig Smith, director of development for AMCAL Multi-Housing Inc., a Los Angeles-based nonprofit that's building one of the projects. "The need, whether it's affordable or not, for senior housing is going to increase."
In the Fresno and Clovis area, there are about a dozen affordable apartment complexes.
The waiting lists are long. There are 180 people waiting to get into L.C. Hotchkiss Terrace in Clovis. Another 80 people wait for spots at Sierra Gateway in northwest Fresno.
With that kind of demand -- along with federal grants and programs for affordable senior housing and local government support -- these projects are easier than others to pursue in today's economy, experts say.
Payoff is a factor, too. Rent for traditional apartments often is too low to make money or cover the cost of construction these days, said Fresno real estate analyst Robin Kane.
"I don't know if people realize how great the need is," said Jacqueline Seegobin, director of affordable housing at Southern California Presbyterian Homes, which is building a senior complex in Clovis. "The baby boomers are entering the housing market. There are people who lost their jobs sooner than expected and didn't plan well for the future. The need for affordable housing will not go away."
Answering the call
Housing agencies and senior organizations across the county receive phone calls daily from seniors looking for affordable places to live.
The need is great, especially for apartments in desirable areas near grocery stores, social activities and medical services, said Frances Contreras, clinical manager at the Fresno Madera Area Agency on Aging.
The senior population is expected to grow nationwide, fueled by the incoming generation of baby boomers -- those people born between 1946 and 1964. The oldest of the baby boomers turns 65 this year.
In Fresno County, the population age 60 and older is expected to double by 2020, according to the California Department of Aging.
The senior market is becoming a very interesting area to developers because of the baby boomers, said Harold Shapiro, an adviser with the Counselors of Real Estate, a national organization of commercial real estate experts.
Some private housing developers already are preparing for the Valley's growing senior population. The Bigelow-Silkwood family is planning a 2,500-home development east of Friant Road and south of Millerton Lake for "active" adults or those age 55 and older.
Fresno builder Gary McDonald is getting ready to build a gated community with smaller homes at Copper River Ranch in northwest Fresno for the same age group.
But for seniors on a fixed income, affordable housing can be the only option. And nonprofit developers have good incentives to build them.
Investors will put up money for senior housing developments because of the tax credits available, Kane said. State and federal agencies also have special funding programs for affordable senior housing developments.
The programs are not new, but they make a difference at a time when lenders are giving out very little private construction funding.
Heating up in Clovis
Clovis is home to at least seven senior housing complexes, including three "affordable" projects. The first was Silver Ridge, a renovation of the former Clovis Community Hospital into 100 units. It opened in 1999.
Southern California Presbyterian Homes built L.C. Hotchkiss Terrace, a 75-unit complex, in 2003 at Shaw and Minnewawa avenues. The developer is now building Rose View Terrace, a 60-unit complex, next door and is expected to be finished by spring 2012.
The project was made possible through a federal grant and help from the city and its redevelopment agency.
The city bought the property for $517,500 and sold it to the developer for the same price with all the entitlements.
"This was an old abandoned dilapidated church site that now has been put to reuse," said Andy Haussler, the city's housing program manager.
Southern California Presbyterian received an $8.4 million grant from the U.S. Department of Housing and Urban Development to build Rose View. The city and its redevelopment agency contributed about an additional $100,000 from its housing fund to cover the remaining cost of the project.
Rose View is expected to fill up quickly. The demand for a project like this is even greater than for others because it charges rent based on a tenant's income, Haussler said.
A senior who receives $1,000 a month or $12,000 a year from Social Security, for example, would pay 30% of their income or about $300 for rent.
Other programs set rent based on the county's median income, Haussler said.
Others in the works
Other nonprofit developers believe their projects will be just as popular.
Last month, the city of Fresno, the Fresno Redevelopment Agency and AMCAL Housing broke ground on a 90-unit multi-use senior complex on Ventura Avenue and Seventh Street in southeast Fresno.
The property was an old maintenance yard owned by the Fresno Unified School District.
This is AMCAL's first affordable senior housing complex in the Central Valley, said Smith, the nonprofit's development director. It will include retail space along Ventura Avenue, a community room and pool.
"We're gearing the space for local retailers or merchants that would make the project viable for the neighborhood, but also the residents," Smith said.
AMCAL has completed several senior housing projects in Southern California. It also built a handful of affordable multifamily developments in the Valley, including Summer Hill Place, which opened in southwest Fresno last month.
Santa Clara-based ROEM Corporation, a home and multifamily developer, is planning a senior housing project on Kings Canyon Road between Willow and Peach avenues in southeast Fresno. The city has allocated $2.5 million in federal funds to the Palm View Gardens Senior Apartments project, which will bring an additional 133 units to the neighborhood.
The developer is waiting to receive low-income housing tax credits before it begins work, said Corrina Nunez, project manager for the city's Downtown and Community Revitalization Department.
In west Fresno, meanwhile, the Housing Authorities of the City and County of Fresno is partnering with King of Kings Housing Development Corporation to build a 35-unit complex on an old ponding basin on Florence Street.
The authority typically concentrates on multifamily housing, but in this case the lure of senior housing was attractive, particularly since the authority found a partner agency to work with, said Preston Prince, the authority's executive director.
Prince hopes construction will begin by the end of this year, with an opening in October 2012.
"There are a number of senior developments in the pipeline coming up especially as there is a growing need for senior housing," Prince said. "The economic engine within housing is coming from the affordable sector."