Senior Citizen Housing Facilities (Seniors' Homes) are plentiful in Calgary, with about sixty of them being subsidized buildings owned by the Alberta Mortgage and Housing Corporation. A review of the key differences between typical multi-family properties and Seniors' Homes which have given rise to an 18% reduction in assessed value is worthy of note. The same factors requiring an adjustment to assessment values if fairness and equity are to be achieved will be present in varying degrees in other communities: so, a quick review of the five factors found in Calgary which gave rise to the eighteen percent reduction there is helpful. These factors are (1) suite size and unit mix, (2) parking ratios, (3) design and layout, (4) land use designation and (5) curtailed potential for growth in the market. While decision 131/08 of the Alberta Municipal Government Board dealt with most of these issues, a subsequent settlement between the taxpayer and the municipality brought the total ongoing assessment reduction to 18% of the original assessment made by the Calgary assessors.
Calculations showed that nearly one third of the suites in Seniors' Homes (out of a total of approximately 3300 units) were bachelor suites; whereas in typical multi-family properties less than 5% of the suites were bachelor suites. Not unexpectedly, the number of two-bedroom suites was down from 45% in typical multi-family properties to 3% in Seniors' Homes.
Statistics showed that in Calgary typical bachelor and one bedroom suites were 500 and 650 sq. ft., respectively; while in Seniors' Homes they were 425 and 500 sq. ft., respectively.
For obvious reasons, parking ratios were decidedly lower in Seniors' Homes than in multi-family properties; and the cost to bring the number of parking stalls up to the standard expected in typical multi-family properties is considered prohibitive. This is even more true in high density residential areas, where a parking structure would be required.
The design and the layout of Seniors' Homes were found to be "use" specific, and included extra-wide hallways and doors to accommodate wheelchairs, handicap equipment of some kind in all bathrooms and kitchens (low light switches, grip-bars, etc.), and (in some locations) extra security protection. Air-handling systems, elevators (even in low rise structures), heating and cooling equipment, as well as common-area repair and upkeep, and yard maintenance etc., were all operated at an above-normal quality level. These associated extra costs were reflected in an operating expense ratio that exceeded the norm in multi-family properties by an estimated 15%.
Land use designations for Calgary Seniors' Homes have been relaxed, to account for the specific nature of Seniors' Homes facilities, including lower parking ratios. The well kept nature of such facilities, lack of noise, and excess garbage etc., are considered to compensate for higher than normal density or other design contraventions. Conversion of the Seniors' Homes to typical multi-family use would usually involve a land use change, as many of the site specific designations limit the land use to Seniors' Homes.
Studies of how real estate values change over time have shown that while the market may increase on average, not all properties increase at the same rate. A time adjustment study prepared by the City of Calgary's assessment department was used to set the average change in value. On appeal from the City's assessment of Seniors' Homes, issue was taken with the limited number of representative sales used in the assessment process, and the resulting percentage increase; but ultimately it was the unique nature of the Seniors' Homes which curtailed growth, as witnessed by the number of items (and their scope) which deviated from the normal multi-family building. The total reduction of 18%, although not arrived at in one fell swoop, was eventually proposed by the City and accepted by the property taxpayer.
Endorsements:
1) The most important part was hiring the right people to take the case forward over the past five years or so. In another life I must have been Irish or something because I actually believe that fighting city hall is a fair fight! Fair as long as you and Gil are on the team leading the charge and negotiating agreements that benefit our industry and aid in our mission to provide affordable low cost housing to low income seniors. Lawrence V. Braul, Property Manager, Trinity Housing Foundation, Calgary.
2) A letter to all Seniors' Housing Property Managers in Calgary:
Hello All,
Attached you will find a letter from Steven Rickard of Rickard Realty. As you know his firm was retained to review the municipal property tax assessments with the goal of having the City acknowledge that due to unique variables specific to our senior self contained apartments the tax assessments have been historically over assessed.
I am pleased to advise you that Steven was successful in securing a three year agreement with the City on this issue which Housing and Urban Affairs has accepted. The details of the agreement are included in the attachment.
I want to thank you all for the assistance you provided Mr. Rickard as well as thank Steve for his efforts that led to this agreement.
Sincerely,
David
David Staines, Manager
South Operations
Alberta Housing and Urban Affairs
301, 7015 Macleod Trail South
Calgary, Alberta T2H 2K6
Phone: 403- 297- 5773
Fax: 403-297- 6138
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