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Owning Their Independence

Independence. It’s a word that can take on many meanings, but the significance is always the same — it signals a change, a new era for some, turning the page on an exciting chapter of life. For some seniors, independence means being free of the burdens of home ownership. It means staying active, creating community, and retaining a vested interest in their properties. This quest for independence and ownership is leading to a unique trend in the senior living market with the construction of "cooperatives" for active seniors.

"The average age that seniors enter an assisted living facility is just over 80, so there is a gap between retirement and true assisted living. Many seniors want a lifestyle change, to transition into retirement but are not ready to enter a retirement home just yet," said MW Builders Business Development Manager Marty Hoffey. "This is creating space in the market for cooperative-based living, which is geared toward active seniors," he said.

Real-Estate Equities Development Vice President Shane Wright explains the uptick in this type of housing. "The surge in our cooperative properties is twofold. First, many seniors today want to maintain their independent living and do not want to live in an age-in-place facility. In our facilities, they only pay for what they need — it is choice-driven rather than needs-driven like Continuing Care Retirement Centers (CCRC). While many seniors want to shed the burden of home ownership, such as maintenance and upkeep, some still want to maintain a vested interest in the place they live. This is where our cooperatives come in," said Wright.

Set up as a true cooperative with each resident owning a share, properties like the recently constructed Village Cooperative in Shawnee, KS offer yet another thing traditional retirement homes don’t — ownership. "Each property is worth one share of the building, so in essence, each resident owns one share. The ownership structure is set up so each share increases in value three percent each year, offering piece of mind for the investor. This structure also keeps the costs down; because the cooperative is not-for-profit, residents are only paying for the expenses they need, not management fees; they share the cost of these predetermined monthly expenses."

Hoffey attributes the cost predictability and structure of the cooperatives as a reason for their success — and their place in future construction. "Not only is the ownership structure attractive to the residents, but it is luring developers as well. Because owners do not need to provide any services, it is much easier from a financial standpoint to build, so more developers are entering the game. It’s turned the independent living market into one of the hottest right now," he said.

Cooperatives also offer residents a sense of true community — one that seniors are lining up to become part of. With waiting lists before the property officially opens, Wright sees firsthand how quickly residents become family. "The social dynamic of our cooperative properties is enormous. Many of our properties fill up before construction is complete, so the residents get together regularly months before they move in and become friends from day one. The camaraderie is really special."