Greater Los Angeles (L.A.) is defined as LA County, which spans more than 4,000 square miles and stretches about 80 miles diagonally from Long Beach City on the south to San Clarita City on the north. It is bound by the Pacific Ocean to the west, San Bernardino County to the east, Ventura and Kern Counties to the north, and Orange County to the south. L.A. County ranges from beach towns to valleys to mountainous neighborhoods. Basically, the county is a populated continuum. Until 10 years ago, high-rise buildings were atypical. The area expanded outward rather than upward, as it has been earthquake-prone. The county has 88 cities, which include Los Angeles, Santa Monica, and Pasadena, plus unincorporated areas. Numerous freeways link the areas of the county. The flat San Fernando Valley is to L.A. city’s north.

Greater Los Angeles Age 55+ Housing Summary

Opportunities for a variety of age 55+ housing models are constrained by the area’s land scarcity. Master-planned 55+ active adult developments are nonexistent. Age 55+ moderate, market-rate and subsidized multi-unit housing, plus service-enriched housing prevails. Some of the area’s general occupancy multi-unit properties have a large proportion of residents aged 55+, but are not geared specifically to any one age group.

Map — Los Angeles County

Source: Southern California Association of Governments

Population Change
Los Angeles County has a January 1, 2009 population of 10,363,800, an increase of 844,500 persons since 2000; population growth is projected to continue. The county's population size would make it the eighth largest state in the nation, just behind Ohio and ahead of Michigan. (Los Angeles County Economic Development Corporation — LAEDC). L. A. County is within the Los Angeles-Long Beach-Santa Ana MSA, which has a population of 12 million.

Between 2000 & 2012, the 55-64 age cohort is projected to increase in size from 7% to 10% of the total population. The population aged 65+ is projected to increase from 10% to nearly 12% of the total  population. In contrast, the 35-54 age group is projected to decrease in number, but is still sizable and a large proportion of the total population.

Diversity and Ethnicity

Age 65+

For builders, there is opportunity to attract first- and second-generation minority individuals that have particular culture-related values, sensitivities and preferences. Diversity in 2009 among the age 65+ population in L. A. County is as follows: (Source: Claritas, Inc. Nov. 2009.)

All Ages

The older age groups have a smaller minority population than the total population.

Minorities comprise nearly 70% of L. A. County's population. The Hispanic population — the largest minority — is projected to increase in the next 5 years. Many older, first-generation immigrants are part of a supportive extended family.

Households — Growth in Numbers

The number of age 55+ households is large and increasing. Because of L. A. County’s large land expanse and population diversity, the scope of market demand varies. It depends on which site location, what income group, and if a community appeals to a particular ethnicity.

Source: Claritas, Inc. November 2009

Median Household Income by Age Group

Median household income varies by city and community. For all ages, it is as high as $174,183 in Santa Monica City and as low as $21,077 in some parts of Los Angeles City. The median income for L. A. County  is $62,100 in year 2009. It is lower than Orange County to the south, which is $86,100. The median income by specific age groups and years follow.

Source: Claritas, Inc. November 2009

Annual Income Breakdown by Income Band and Age Groups 55+
 
The large number of age 55+ households spans the income spectrum with largest percentages and numbers at the lower and higher income bands.

Source: Claritas, Inc., November 2009

Unemployment Rate

In L. A. County, the unemployment continues to rise. Nonfarm jobs have been reduced by 165,200 between August 2008 and August 2009.

L. A. County’s major employment sectors are aerospace, motion picture/TV, international trade, and tourism. Unemployment increased in these, plus most other sectors, except for health care services and few other sectors.

LA Econ. Dev. Corp. Kyser Center for Economic Research. July and August 2009. US Dept. of Labor.
California Employment Development Department. Labor Market Information Division

Population and Migration

Population growth stems from international migration plus more births than deaths. International
immigration comprises mostly Hispanics and Asians, as is the case throughout the USA.

Source: Real Estate Center, National Association of Realtors

Since the late 1980s, there has been a domestic outmigration, although it is decreasing. Housing that's too expensive, lengthy commuting distances, and traffic congestion prompt outmigration. An undocumented number of age 55+ residents leave the Los Angeles MSA once in retirement.

Median Home Prices 

The L. A. County’s median home value in second quarter of 2009 was $311,100. Prices are stabilizing compared to one and three years ago. The fall in median home price is leveling off.

LAEDC Kyser Center for Economic Research. 2009-2010 Midyear Update

Home prices in reasonable commuting distance typically cost significantly more than the area’s median price. Affordability is a major problem for many. Property taxes often keep many aged 55+ in their current homes, because that tax is based on purchase price rather than current market value. Those who bought homes long ago benefit. L.A. County’s median home price is higher than in surrounding counties.

Source: National Association of Realtors, Local Metro Reports. 2009. L.A. County

Los Angeles County Residential Permits

L. A. County did not have the surge in new home construction typical of other Southern California areas during years 2000-2006, but still is experiencing a decline in residential permits. According to the LAEDC Kyser Center for Economic Research, the county has an oversupply of condos and apartments. Many new condos and apartments are in downtown Los Angeles, and are attracting primarily young professionals.

These are permits issued for new single family and multifamily units.

Sources: Construction Industry Research Board 2000-2008, Southern California Association of Governments, L.A. County Construction Permits

Age 55+ Housing Developments

Age 55+ master planned developments consisting of single family homes and attached homes (townhomes) are nonexistent. L. A. County’s high cost of land, as well as land scarcity, constrain and limit opportunity. Multi-unit mid- and high-rise condominium or cooperative buildings specifically for those aged 55 and older also are nonexistent. However, there are 55+ multi-unit rental buildings. These are geared primarily to those with moderate incomes. There are a limited number of market-rate 55+ communities.

The nearest master planned developments to L. A. County are at least a two-hour drive away in coastal Orange County and inland Riverside County. They attract L. A. County residents. However, the developments are perceived as destinations, since individuals must relocate. According to Rita Lamkin of Rita Lamkin & Associates in Orange County, there are two types of age 55+ destination buyers from L. A. County: coastal and inland. Coastal buyers want proximity to the ocean but not necessarily an ocean view. These buyers consider themselves coastal when they benefit from the coastal air even if the ocean is 10 miles away. Buyers who prefer inland developments, such as those in Riverside County, typically can find less expensive developments compared to those in the ocean coastal area. Many inland developments are in Riverside County’s Hemet and Palm Springs areas.

According to the L. A. County Planning Office, the county has no proposed master planned, age 55+ developments with single family homes, townhomes and condominiums. Burbank Senior Artists Colony exemplifies the type of rental housing in L. A. County geared strictly to those aged 55 and older. It is relatively affordable. But in many ways, this particular property is unique. It is designed to attract a specific niche — those interested in the arts: painting, theater, music. The common areas are a showcase for people to undertake their work and display their talent.

Built in 2005, this five-story rental property is located north of L. A. City in the city of Burbank. Common areas include two large art studios, display galleries, a performance theater, studio for digital video editing equipment, and music playing areas. Many “funky” and not-so-funky paintings and sculptures are displayed throughout the building and outside. Other common areas include an outdoor swimming pool and exercise area. The property is ideally located within a block — an easy walk — from downtown Burbank, which is an architecturally pleasing village of small shops and restaurants plus midrise apartment buildings.

This property has 141 units, of which 113 are one-bedroom units and 28 are two-bedroom, two-bath units. There are 49 units with washer/dryer hook-ups. Rents range from $1,700 to $1,960 for one-bedroom units of 700 sq. ft. and $2,200 to $2,600 for two-bedroom units of 900 sq. ft. The décor and unit features are modest. Thirty percent of the units (42 units) are affordable under the Low-Income Housing Tax Credit Program. These rents are less than $700. The property is managed by Legacy Partners and was built by Meta Housing Corporation.

Service Enriched

L. A. County has many service-enriched properties targeting moderate to upper income households. The latest to open is Belmont Village, located in Los Angeles’ upscale Westwood neighborhood on fashionable Wilshire Boulevard. Opening in August, 2009, Belmont Village has 140 units: 54 for independent living, 60 for assisted living and 26 for dementia care. The 5-story structure is architecturally pleasing. Rents range from $4,600 to $7,800 for one- and two-bedroom units in independent living, $5,575 to $11,950 for studios, one- and two-bedroom units in assisted living, and $7,300 to $13,350 for studios to two-bedroom units for those needing enhanced personal care and those needing significant hands-on assistance, and $5,000 to $8,000 for studios in Alzheimer’s/dementia care. There are additional costs for added levels of care, such as medicine management. There also is a nonrefundable community fee.

While fees are relatively high, they are in keeping with the surrounding area. The property is in an area with exceedingly high land costs. Most homes are valued at $1.5 million to $2.5 million and higher.

Units range from 500 sq. ft. to 1100 sq. ft. for both independent living and assisted living. There are 16 different floor plans and the larger units are attractive to couples or individuals with a caregiver. Common areas are plentiful, and include a bistro, outdoor swimming pool, fitness center and exercise room. The property is unique in its targeted audiences. It is located next door to a church and built on land formerly owned by that church. It is part of the Westwood neighborhood, and has an association with the UCLA Emeriti Association. These 3 groups — church members, neighborhood members and UCLA faculty — are offered priority admission. Owned and operated by Belmont Village Senior Living, the property is in the lease-up stage.

Government Subsidized Affordable Housing

A significant proportion of Los Angeles County’s age 55 and older households — at least 30% — are low to low/moderate income and would likely qualify for government subsidized housing. Such housing comprises a significant proportion of all existing age 55+ housing in L. A. County. While many new properties have been built in recent years under the Low-Income Housing Tax Credit Program, a large number were built more than 30 years ago and are undergoing renovations.

One such property under renovation is Angeles Plaza, which opened in 1980 in the heart of downtown Los Angeles’ historic and now fashionable Bunker Hill area. It is centered at the edge of new high-rise apartments, condominiums, retail shops, restaurants, and skyscraper office buildings. Angeles Plaza is unique by virtue of its size. There are 1,093 one-bedroom units in five 16- and 17-story towers. The average age of residents is 82, and most have annual income less than $17,000, that is, less than 30% of the area median income. The property offers independent living with support services through an onsite 80,000-sq.ft senior center, which is open to all of L. A.’s downtown residents.

Built and managed by Retirement Housing Foundation (RHF), a national nonprofit organization, the company requested and received more than $43 million in financing to refurbish and modernize its units and buildings. According to Richard Washington, RHF’s vice president for operations, the renovation has a great emphasis on creating an energy-efficient property. The units will have new appliances, cabinets, balcony doors, paint, carpets, heat and air conditioning plus other updates. These changes, plus renovations to hallways and common areas, will average $43,000 per unit.

Common areas include meeting rooms, a library, dining room, senior center, mini-mart, beauty salon, and the Tom Bradley Center for Health Care, operated by the Samaritan Hospital. Financing stems from tax-exempt bonds and the Low-Income Housing Tax Credit Program, among other sources, and exemplifies the LA area’s commitment to preserving affordable senior housing. The property has a 10-year waiting list, according to Chris Ragan, RHF’s corporate director of public relations.

Forecast for Age 55+ Housing

In L. A. County, many of those aged 55+ will continue to live in condos and rentals that attract all age groups, but which have a significant number of older people. Known as natural occurring retirement communities (NORCS), these properties exist primarily in L. A. County’s older urban cores — West L. A. City, Beverly Hills, Marina Del Rey, Century City, Santa Monica, and parts of Long Beach.

There is significant demand for housing geared those aged 55 and older at all income groups. Among L. A. County’s 1.1 million households aged 55 and older, one-third or 38% (423,773 Households) have annual income of less than $35,000 and would qualify for subsidized or moderate income housing. At the other end of the income spectrum, 34% (376,266 households) would likely to be able to afford upper-moderate to upscale housing. In the middle are 28% of the age 55+ households — or 28% of this age group — with annual income from $35,000 to $74,000.

The county’s lack of easy access to public transportation, the many hilly neighborhoods, the steady traffic congestion, and the area’s numerous hard-to-drive high-speed freeways push demand for housing geared to those aged 55 and older. Developments built with universal design features in walkable distance to shopping and activities would definitely generate demand.

Evelyn Howard, President of Howard & Associates, is a nationally recognized expert in market
research and market demand studies to include consumer research and services for the age 55+.
She serves clients nationwide with comprehensive information on active adult, multi-unit properties, affordable housing, assisted living, and long-term care. She is based in Bethesda, Md., and Los Angeles. [Return to top]