According to Census Bureau statistics, the number of Americans over the age of 85 is expected to reach 15 million by the year 2050. Therefore, it is not surprising to see the demand for senior housing steadily growing. Developers have been trying to meet this demand by focusing their development and rehabilitation efforts on three primary senior housing options: congregate living facilities, assisted living facilities and continuing care retirement communities. However, the actual development of such housing has been slow, largely due to the evolving regulatory and licensing requirements that are a part of such facilities. In addition, zoning obstacles have increasingly resulted in development delays and, in some instances, have actually prevented the development of such housing facilities in a community.
The "Zoning Problem"
Simply stated, the "zoning problem" is that existing land use ordinances generally do not address the above-listed senior housing options. This is likely due to the fact that the demand for such housing has increased so dramatically in the last few years as a result of an increasing number of consumers seeking alternatives to nursing homes. The zoning problem associated with senior housing options varies from state to state and from municipality to municipality. However, the problem is generally identified when a developer acquires a site and attempts to obtain zoning compliance for his senior housing facility.
In such instances, it is not unusual to find that terms such as "assisted living facility", "congregate care facility" and "continuing care retirement community" have not yet been incorporated into most municipal zoning codes. This means that developers have to work within the existing zoning code definitions in order to obtain compliance. For instance, it is not uncommon to have a municipality identify within its zoning code basic zoning districts such as residential, commercial and manufacturing. The developer seeking to develop a site as an assisted living facility within a residential district of the municipality will have to convince the zoning board that the facility, although not specifically defined within its code, is an acceptable type of development for that zoned district.
The rationale for acceptance is generally that the development is "most like" one of the acceptable uses identified in the municipality's zoning code, such as an apartment complex or a housing development. Depending on the actual definitions within some zoning codes, this approach has been successful. However, in some instances, a comparable definition is not available. Therefore, the developer must seek a zoning variance or a special use permit to allow the development of the assisted living facility.
Seeking Variances And Special Use Permits
Obtaining zoning variances and special use permits present another set of obstacles for the development of the senior housing facilities noted above. Although the developer's market study may indicate a strong need for the housing in a particular community, the community itself may object to the development. This emphasizes the need for developers to incorporate community concerns and needs into the planning of the facility.
Typically, communities have opposed such developments on the basis that either:
- the proposed facility does not meet the general character of the other buildings within the district where it is to be built,
- the facility resembles an apartment complex and should, therefore, not be built in a business zone, or
- the facility will create a parking problem in an already densely populated area.
In most instances, this opposition can be overcome if the developer is willing to invest additional time and money to work with the community and the applicable zoning board. This may involve the redesign of the facility or a commitment on the part of the developer to create a community amenity such as a community park or a biking path either near the facility or within another area of the community. In residential areas, developers are often required to establish a buffer zone between the housing facility and the rest of the residential district, or to agree to limit the time of commercial deliveries to the facility.
In the more rural areas, the communities have seen the request for a variance or special use permit as an opportunity to have costly infrastructure construction done by the developer. Specifically, a developer seeking a variance or special use permit may be granted its request provided that it contributes to or constructs a portion of the needed infrastructure within the community.
Most of the requirements placed by communities on the developers of such proposed housing facilities are generally due to the community's unfamiliarity with the type of housing to be built and its operation. Many communities recognize that although such facilities are housing, they are, nevertheless, businesses built and operated for profit. As a result, the communities fear that if a variance or special use permit is granted to such a facility and the business fails, the sale of the property may result in the creation of another business or other residential use that may be unfavorable to the residents or which may not otherwise be permitted under the zoning code. It is, therefore, not uncommon for communities to ask developers to execute an agreement regarding the use of the site in the event the owner/developer decides to sell it in the future.
Most assisted living facilities that have been built to date have targeted that segment of the population capable of paying for the housing and services of the facility. Developers have, as a result, built such facilities in the more affluent towns. Even here, developers have faced community opposition, particularly because of the fear that such a facility will result in decreased property values in the community. These communities have, therefore, often imposed costly building and design restrictions on the developer as well as requiring the incorporation of the amenities previously discussed.
Developers willing to expend the additional time and money in order to obtain a zoning variance or special use permit have generally been successful. Community support for a project is an integral part of a zoning board's decision to issue the requested variance or permit.
Fair Housing Amendment And Zoning
When zoning boards have denied a requested zoning change or variance, developers have challenged such denials under various constitutional theories and federal statutes such as the Fair Housing Amendments Act of 1988 (the "FHAA"). The FHAA prohibits discrimination in housing on the basis of handicap and familial status. The FHAA is enforced by the Department of Housing and Urban Development or, in some states, by the state housing finance agency if the state has a substantially equivalent law. The handicap discrimination provision of the act has been used, with mixed results, by developers to challenge some denials. However, if successful in its challenge, the developer may obtain injunctive relief, damages or civil monetary penalties as well as attorney's fees.
Overcoming The Obstacles
The need for senior housing alternatives continues to grow in our country. As a result, states and municipalities will have to modernize their zoning codes to facilitate and integrate the senior housing options. The requests of the developers building such housing and their subsequent challenges to zoning board denials have resulted in the identification of some of the needed changes, but the process has been slow. Until zoning ordinances have been updated, they will continue to pose an obstacle for developers of senior housing options.