Senior housing report and related memos

8/8/2019 Senior housing report and related memos

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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

[email protected]

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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Valerie S. KretchmerAssociates, Inc.

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


Market Rate 28 41

From Residents Outside of the Area 40 54Affordable (LIHTC) 28 36

Market Rate 12 19

Total Demand 161 216


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%


60304

Table 2

POPULATION OVER 65 YEARS IN OAK PARK ZIP CODES

60301 60302

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Oak Park Zip Codes



www.delorme.com

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MN (3.3W)

0 600 1200 1800 2400 3000

0 200 400 600 800 1000

ftm

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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%


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%


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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(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


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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(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


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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(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.


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Oak Park Area Senior Properties



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 $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


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


Income Level $35,000-$49,999 2% 3% 2% 3%

Number of Households Over 65 1,381 1,381 1,360 1,360


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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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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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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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


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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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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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 -


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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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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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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Documents

Senior housing report and related memos