29 March 2010

Chalk this up under the "who knew" column

Who knew that a risky financial instrument would have its own daily news site? -- "Reverse Mortgage Daily"

Recession forces builders to open up 55+ Communities to everyone (even kids)

As predicted in Leisureville, developers are forced to open up their wares to a larger pool of potential owners when such communities become "non-performing" assets. More importantly, this proves that these communities aren't really communities, they're developer-owned investments. That means a developer can do just about anything s/he wants or needs to do to earn a profit -- even change the communities "by-laws" to change it from 55+ to all ages, regardless of what folks thought when they were first buying in. Lesson: When an individual owns a community, they can do what ever they want with it. Unlike a municipality, residents have no voice.

55-plus community in N.J. opens development to all ages

By Haya El Nasser, USA TODAY

Elazer and Barbara Lew were the first to move in to
Pine River Village in Lakewood, N.J., a development
for people age 55 and older.

"I liked the idea of moving to an adult community,
with all the services and amenities," says Barbara,
63, who works at a nearby school for children with
special needs. "I liked the idea of having people our
own age to socialize with."

That was three years ago — just before the housing
market crashed and the recession hit. Suddenly,
older buyers who wanted to enjoy the amenities
age-restricted communities offer, couldn't sell their
existing homes. On top of that, their retirement
funds were taking a beating as stock prices
plummeted. Some who had planned to retire and
move decided to stay put and keep working.

RECESSION'S TOLL: Active adult developments
struggle to find residents

Only about 20 Pine River Village homes had sold
when the developer approached the homeowners
with a proposal: agree to lift the age restriction on
housing built on half of the development.

"There were mixed feelings," says Ronald Gray, 65,
who was among the first to buy in to Pine River with
his wife, Rachel.

Somerset Development vowed to keep the new phase
completely separate. It even has a different name:
Somerset Walk. Residents have their own clubhouse.

Lifting or easing age restrictions in active adult
communities is the latest consequence of the
recession and housing collapse — especially in new

New Jersey, with a 16-year supply of age-restricted
housing, is at the forefront of this movement. The
state's towns and counties welcomed no-kids
housing with gusto because the developments
created revenues without putting a strain on local
school budgets.

"They used that tool too often — to excess," says
Robert Lang, urban sociologist at the University of
Nevada-Las Vegas. "It was overstocked because it
was easy to get approved."

Ralph Zucker, whose company is building Pine River
and Somerset Walk, said many developers "pushed
back on regular development because it was a lot
easier to do age-restricted communities … Now, we
see an active market for non-restricted housing."

Last year, New Jersey passed a law that allows
developers to ask municipalities to do away with age
limits on projects that have already been approved.
More affordable housing would be built in return.

Struggling developers see non-restricted building
as a way to tap in to a larger market, including first-
time homebuyers. Residents accept it because they
would rather live in a built community than be
surrounded by dirt lots.

"We can't get our streets paved the way we'd like to
because development hasn't been finished," Barbara
Lew says. Opening it up to families could attract new
business. "We still have our separate development;
we'll still be just in our section," she says. "I see it
as a good alternative to just sitting and waiting."

Gray, who runs a foundation for disadvantaged
children, says "In the final analysis, we realized it
was in our best interest. We felt we'd rather live in a
community than in a construction zone."

The changes also may satisfy older residents' desire
to be close to their children and grandchildren by
creating a multigenerational community, Zucker

The Lews, who lived in Staten Island, N.Y., for 31
years, have two daughters who live in Lakewood.
"For people to have their children buy on the other
side is a very good idea, especially as people get
older," Barbara says.

Large retirement communities are still thriving, says
Dan Owens of the National Active Retirement
Association, a trade group involved in marketing
and building for people older than 50. He predicts
that when the economy improves, the market will get
a big boost because of pent-up demand.

"Even though some communities are drifting away
from age restrictions, you can't ignore the
demographics," he says.