“Affordability” is a concept often misunderstood. It requires a nuanced explanation. The most common question about assisted living cost: “what’s the cost per square foot?” The fact is, assisted living residents aren’t buying square feet – they’re buying units with services. And astute owners (and funding sources) base affordability on all-in cost – including operations in comparison to revenue.
Better metrics of affordability are cost per unit – plus understanding the project’s rent target in relation to the median household income in the area. For success, this more comprehensive view of project affordability is crucial – and understanding how design and construction decisions flow from the affordability “target” is critical.
Using Christopher Heights in Marlborough, Mass as our model, eight key factors were identified as essential to an affordably built project.
– Understand the owners/operators model for building configuration and care.
Owners Grantham Group LLC had the benefit of having built three similar facilities in Massachusetts (Attleboro, Webster and Worcester). This experience taught them the most desirable unit mix and configuration, building size, and amenities. They learned that efficient staffing, including 24 hour care, two hours of personal care and a dedicated activity director – meant lower operational costs. Meal service was most efficient through the utilization of a family dining model. Through experience, they understood the necessary elements for affordability; they had their target.
– Assemble the Right Team
The owners and their project manager, Potomac Capital, enlisted the seasoned team of Cutler Associates as construction managers and SMOOK Architecture as master planners/architects.Our team approach was an open but demanding process; clear goals were set early, milestones established, and tasks assigned. The team worked strategically, developing the initial plan, attaining financing, securing permitting, finalizing working construction documents, and ultimately building the facility. Individual accountability was vital, and the mission clear: construct a cost effective, architecturally appealing building. In-other-words, the entire team “bought into” the Owner’s affordability answer.
– Secure Appropriate Financing
Total project cost affordability must take into account both soft and hard costs, including: land acquisition, financing, design and construction – in addition to costs associated with long term facility operation and staffing. The Christopher Heights model utilized two low income tax funding sources: Low Income Housing Tax Credits (LIHTC) and Home Funds, and in doing so, the overall debt service on the project was reduced well below conventional financing methods. Keeping the land basis low was essential to success. Land cost must be financed through conventional means or upfront capital, as it’s not considered in the calculations for LIHTC. Finding sites in the correct demographic with favorable land acquisition costs or ground lease terms is difficult; especially in the northeast.
– Use Effective and Strategic Site Planning
The land purchased for Christopher Heights was a brownfield site, and remediation was completed by the City of Marlborough prior to conveyance. The project was to be a marquee building for the Christopher Heights brand and a showcase for successful revitalization. With a slope of approximately 12 feet, the site provided a strategic master planning opportunity with the creation of a walk-out lower level. A central kitchen, mechanical and other service spaces were tucked below the building without absorbing precious ground level space. Some difficult uses bounded the site, including a run-down convenience store, a firehouse and homes in disrepair. A site plan with a central courtyard as the main drop off and entry to the property was integral in mitigating the negative visual impact of the surrounding parcels.
– Revisit Previous Success Stories
The team leveraged the success of the owner’s three prior projects to streamline the design and preconstruction process of Christopher Heights. For example, mechanical, electrical, plumbing, and fire protection systems were done design-build to maximize efficiency and economy.
– Strategically use Private and Public Spaces
Another key to the Christopher Heights model was managing the gross square footage of the building without compromising unit sizes. The 83 bed facility maintains an incredibility high efficiency of 662sf per unit, versus the sector standard 750-875sf per unit. This was accomplished through the strategic use of public spaces within the building, with “Country Kitchens” on each floor serving alternately as family dining, gathering spaces, or entertainment venues, for example.
– Design a Cost Effective Building and Skin
The structural system, comprised of tube steel columns, steel beams and open web steel joists with composite deck, was incredibility efficient. The foundation was designed with few jogs. Articulation of the building exterior and architectural scale was achieved through the use of cantilevered bays, trussed roof elements perched on a predominately flat roof, and the creative use of varying colors and textures of vinyl siding.
– Control the Costs of Interior fit-out
Public areas received visual “punch” with enhanced wall, floor and ceiling treatments. Elsewhere, efforts were made to minimize drywall soffit conditions and wall articulation. A residential heating system was also employed.
– Bottom Line…
While the standard in assisted living at the time was between $105,000 and $125,000 per unit, Christopher House was finished at $94,000 per unit; a 10%-25% cost savings. Affordability requires taking deliberate steps like those outlined above, to hit a price point that meets funding requirements and that makes unit prices attractive to seniors and their families.
Garth Johnson, LEED-AP, HCC is VP Senior Living and Healthcare at Cutler Associates, Inc. of Worcester. Clay Benjamin Smook AIA, LEED-AP BD+C is a principal at SMOOK Architecture & Urban Design of Boston. Cutler and SMOOK also will be teaming on the new Christopher Heights Facility in Northampton.