UBC Theses and Dissertations

UBC Theses Logo

UBC Theses and Dissertations

A feasibility study for the private development of a retirement village in Metropolitan Vancouver Boaden, Bruce Geoffrey 1969

Your browser doesn't seem to have a PDF viewer, please download the PDF to view this item.

Item Metadata

Download

Media
831-UBC_1969_A4_5 B62.pdf [ 6.2MB ]
Metadata
JSON: 831-1.0102319.json
JSON-LD: 831-1.0102319-ld.json
RDF/XML (Pretty): 831-1.0102319-rdf.xml
RDF/JSON: 831-1.0102319-rdf.json
Turtle: 831-1.0102319-turtle.txt
N-Triples: 831-1.0102319-rdf-ntriples.txt
Original Record: 831-1.0102319-source.json
Full Text
831-1.0102319-fulltext.txt
Citation
831-1.0102319.ris

Full Text

A FEASIBILITY STUDY FOR THE PRIVATE DEVELOPMENT OF A RETIREMENT VILLAGE IN METROPOLITAN VANCOUVER by BRUCE GEOFFREY BOADEN B . S c , U n i v e r s i t y of the Witwatersrand, 1965 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION i n the F a c u l t y of Commerce and Business A d m i n i s t r a t i o n We accept t h i s t h e s i s as conforming to the req u i r e d standard THE UNIVERSITY OF BRITISH COLUMBIA June, 196.9 i i i In p r e s e n t i n g t h i s t h e s i s i n p a r t i a l f u l f i l m e n t o f t h e r e q u i r e m e n t s f o r an a d v a n c e d d e g r e e a t t h e U n i v e r s i t y o f B r i t i s h C o l u m b i a , I a g r e e t h a t t h e L i b r a r y s h a l l m a k e i t f r e e l y a v a i l a b l e f o r r e f e r e n c e a n d s t u d y . I f u r t h e r a g r e e t h a t p e r m i s s i o n f o r e x t e n s i v e c o p y i n g o f t h i s t h e s i s f o r s c h o l a r l y p u r p o s e s may be g r a n t e d by t h e H e a d o f my D e p a r t m e n t o r by h i s r e p r e s e n -t a t i v e s . I t i s u n d e r s t o o d t h a t c o p y i n g o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l n o t be a l l o w e d w i t h o u t my w r i t t e n p e r m i s s i o n . B r u c e G . B o a d e n D e p a r t m e n t o f Commerce and Business A d m i n i s t r a t i o n T h e U n i v e r s i t y o f B r i t i s h C o l u m b i a V a n c o u v e r 8 , C a n a d a ABSTRACT The purpose of t h i s study i s to examine the nature and extent of housing demand i n M e t r o p o l i t a n Vancouver a t t r i b u t a b l e to people over the age of f i f t y - f i v e . This i s to be done i n order to v e r i f y whether or not the p r i v a t e development of a s p e c i f i e d retirement v i l l a g e i n Vancouver would be f i n a n c i a l l y f e a s i b l e and prove to be a p r o f i t a b l e investment. In t h i s study, a retirement v i l l a g e i s defined to be a planned, low density develop-ment of permanent b u i l d i n g s designed to house " a c t i v e " a d ults over the age of f i f t y - f i v e and equipped to provide a wide range of s e r v i c e s and l e i s u r e a c t i v i t i e s . This concept of a retirement v i l l a g e i s d i s t i n c t from the many housing developments f o r the e l d e r l y i n i t i a t e d by d i f f e r e n t n o n - p r o f i t o r g a n i z a t i o n s i n Canada. The body of t h i s paper i n v o l v e s three broad areas of study, each i n t e r r e l a t e d . These include an a n a l y s i s of the p o t e n t i a l market, the s e l e c -t i o n of a s u i t a b l e l o c a t i o n , and an examination of the f i n a n c i a l i m p l i c a -t i o n s of such a development. In order to understand the nature of the problem, i t was necessary to make considerable use of research f i n d i n g s regarding the h a b i t s and the needs of the e l d e r l y . In a d d i t i o n to t h i s , the c h a r a c t e r i s t i c s of many of the retirement v i l l a g e s i n the United States f i t t i n g our d e f i n i t i o n , were examined. Many features common to most of these v i l l a g e s were incorporated i n the general design of the v i l l a g e proposed i n t h i s study. I n i t i a l l y , the market a n a l y s i s involves c o n s i d e r a t i o n of the general housing demand and supply s i t u a t i o n i n M e t r o p o l i t a n Vancouver. P a r t i c u l a r reference i s then made to the c h a r a c t e r i s t i c s of the e l d e r l y and the part they play i n t o t a l housing demand. S e l e c t i o n of a s u i t a b l e l o c a t i o n f o r the proposed v i l l a g e i s made on the b a s i s of a number of c r i t e r i a p r e v i o u s l y formulated. The f i n a n c i a l a n a l y s i s i n v o l v e s estimates of c a p i t a l c o s t , o perating expenses and revenues, and net cash f l o w s . From these, expected equity y i e l d s are then c a l c u l a t e d under various assumptions regarding the cost of debt c a p i t a l , the r e t e n t i o n p e r i o d , and the r e v e r s i o n v a l u e . The r e s u l t s of these analyses i n d i c a t e that M e t r o p o l i t a n Vancouver holds considerable market p o t e n t i a l f o r the development of a retirement v i l l a g e of the type proposed i n the study. While there are many f e a s i b l e l o c a t i o n s i n Vancouver f o r the v i l l a g e , the c i t y of White Rock meets the stated c r i t e r i a adequately and i s suggested as the i d e a l l o c a t i o n . The expected p r o f i t a b i l i t y of the proposed development i s not e a s i l y s t a t e d as i t i s dependent upon a number of assumptions. Y i e l d s on eq u i t y i n d i c a t e a wide range of p o s s i b i l i t i e s showing the v i l l a g e to be u n p r o f i t a b l e under some assumptions and extremely p r o f i t a b l e under o t h e r s . TABLE OF CONTENTS CHAPTER PAGE I . STUDY OUTLINE AND SUMMARY OF FINDINGS 1 A. Purpose of Study 1 B. Methodology 3 C. Retirement V i l l a g e s i n the United States 5 D. Summary of Findings 7 1. The Market 7 2. The Location 9 3. Features of Proposed V i l l a g e and F i n a n c i a l Prospects 10 Footnotes 13 I I . THE AGED IN PERSPECTIVE 14 A. The Aging Process 14 B. The E l d e r l y i n Modern-Day Soc i e t y 15 C. Problems of Retirement 17 References 20 I I I . MARKET ANALYSIS 21 A. Demand Aspects of the Market 22 1. Population S i z e and Geographical D i s t r i b u t i o n > 22 2. Sex and M a r i t a l Status C h a r a c t e r i s t i c s of the P o p u l a t i o n 24 3. Household, D w e l l i n g , and Family C h a r a c t e r i s t i c s of the Popu l a t i o n 27 4. Income and Expenditure C h a r a c t e r i s t i c s of the P o p u l a t i o n 29 V CHAPTER PAGE B. Supply Aspects of the Market 35 1. The Housing Stock 35 2. S h e l t e r Costs 37 C. Summary of Demand and Supply Aspects of the Market 40 Footnotes 46 IV. LOCATIONAL ANALYSIS 47 A. Factors Determining Choice of L o c a t i o n 47 1. The Task 47 2. Contact w i t h Friends and R e l a t i v e s 48 3. Desire f o r Independence and P r i v a c y 50 4. Proximity of Community F a c i l i t i e s 51 5. Proximity of Places of Work and Employment Oppo r t u n i t i e s 53 6. Other L o c a t i o n a l Considerations 54 7. L o c a t i o n a l C h a r a c t e r i s t i c s of United States Retirement Communities 54 8. Summary of Considerations 57 B. S e l e c t i n g a S u i t a b l e L o c a t i o n 57 1. Method 57 2. C h a r a c t e r i s t i c s of White Rock C i t y 59 3. White Rock as a S u i t a b l e L o c a t i o n 62 Footnotes 65 V. CHARACTERISTICS OF PROPOSED VILLAGE 66 A. Some Primary Considerations 66 v i CHAPTER PAGE B. D e s c r i p t i o n of Proposed V i l l a g e 68 1. Housing U n i t s 68 2. P h y s i c a l F a c i l i t i e s 70 3. Non-Physical F a c i l i t i e s 71 4. P h y s i c a l Layout of V i l l a g e 71 Footnotes 73 VI . COST-BENEFIT ANALYSIS OF VILLAGE 74 A. B a s i c Assumptions Underlying the A n a l y s i s 75 B. C a p i t a l Cost of P r o j e c t 76 C. Financing Needs 76 1. Short-term Needs 78 2. Long-term Needs 79 D. Operating Expenses and Revenues 81 E. Cash Flow P r o j e c t i o n s 83 F. Rate of Return 85 G. Conclusion 93 BIBLIOGRAPHY 95 APPENDIX TO CHAPTER IV 100 APPENDIX TO CHAPTER VI 110 v i i LIST OF TABLES TABLE NUMBER PAGE I Pop u l a t i o n F i f t y - F i v e Years of Age and Over by M e t r o p o l i t a n Areas 1961 and 1966 ; 23 I I Population F i f t y - F i v e Years of Age and Over f o r Census M e t r o p o l i t a n Areas of Vancouver 1966 25 I I I P o p u l a t i o n F i f t y - F i v e Years of Age and Over by M a r i t a l Status and Sex i n M e t r o p o l i t a n Vancouver and Canada 1966 26 IV Family Households by Age of Head f o r M e t r o p o l i t a n Vancouver 1966 28 V Number of F a m i l i e s With Age of Head Exceeding F i f t y -F i v e Years of Age i n Census M e t r o p o l i t a n Areas of Vancouver 1966 30 VI T o t a l Expenditure by Age of Head: A l l F a m i l i e s and I n d i v i d u a l s , Eleven C i t i e s 1964 32 V I I Percentage D i s t r i b u t i o n by Tenure and Age Group: Eleven C i t i e s 1964 33 V I I I Occupied Dwellings by S t r u c t u r a l Type and Tenure; M e t r o p o l i t a n Vancouver 1961 and 1966 36 IX S t r u c t u r e Type as a Percentage of T o t a l Housing Stock, M e t r o p o l i t a n Vancouver 1951, 1961, 1966 and Estimated 1971 36 X Co n s t r u c t i o n Costs M e t r o p o l i t a n Vancouver 1958 to 1968 .... 39 XI Apartment Rents i n M e t r o p o l i t a n Vancouver 1968 41 X I I D i s t r i b u t i o n of Land by Type of Use, White Rock C i t y , October 1965 60 X I I I S i z e and Number of Commercial Establishments by Neighbourhood Centres, White Rock C i t y , 1965 61 XIV Percentage of C a l i f o r n i a Retirement Communities Possessing Selected P h y s i c a l and Non-Physical Features... 67 XV Housing U n i t s to be Incorporated i n Proposed V i l l a g e 69 XVI P h y s i c a l F a c i l i t i e s to be Incorporated i n Proposed V i l l a g e 70 v i i i TABLE NUMBER PAGE XVI I I Land-Use Breakdown of Proposed V i l l a g e 72 XIX Estimated C a p i t a l Cost of V i l l a g e 77 XX Estimated Annual Rental Income 81 XXI Pro-forma Annual Operating Statement 82 XXII Deductions from Operating Income f o r Income Tax Purposes ... 84 XX I I I Net Cash Flow to Equity f o r F i r s t Ten Years of Operation at D i f f e r e n t Mortgage I n t e r e s t Rates 85 XXIV Summary of Equity Y i e l d C a l c u l a t i o n s 88 XXV Expected Equity Y i e l d s f o r D i f f e r e n t Mortgage I n t e r e s t Rates, Holding P e r i o d s , and Reversion Values 89 XXVI Required Changes i n Reversion Value f o r Selected Equity Y i e l d s and Mortgage I n t e r e s t Rates 89 A-I P o p u l a t i o n by Sex f o r Census M e t r o p o l i t a n Areas, Canada 1966 100 A- I I P o p u l a t i o n P r o j e c t i o n s by Census M e t r o p o l i t a n Areas of Vancouver 1961 to 2000 101 A - I I I Percentage D i s t r i b u t i o n of F a m i l i e s and of Unattached I n d i v i d u a l s by Income Groups and Age of Head, Canada 1965 102 A-IV Patterns of Expenditures f o r F a m i l i e s and I n d i v i d u a l s , Eleven C i t i e s , 1964 104 A-V Number of Housing Completions by M u n i c i p a l i t y i n M e t r o p o l i t a n Vancouver 1962 to 1967 105 A-VI Occupied Dwellings by S t r u c t u r a l Type and by Tenure f o r M u n i c i p a l i t i e s of M e t r o p o l i t a n Vancouver, 1966 106 A-VII D i s t r i b u t i o n of Apartments by Area and Type 107 A-V I I I D i s t r i b u t i o n of Population F i f t y - F i v e Year of Age and Over by M u n i c i p a l i t i e s of M e t r o p o l i t a n Vancouver, 1961 and 1966 108 A-IX C a l c u l a t i o n s f o r D e r i v i n g I n t e r e s t Rate i f o r D i f f e r e n t Mortgage I n t e r e s t Rates, Holding P e r i o d s , and Reversion Values 119 i x LIST OF FIGURES FIGURE NUMBER PAGE 1 Percentage D i s t r i b u t i o n of F a m i l i e s and I n d i v i d u a l s by Expenditure Group, Vancouver 1964 31 2 Average Annual Expenditures f o r F a m i l i e s and I n d i v i d u a l s With Head Over F i f t y - f i v e Years of Age by Types of Expenditure: Eleven C i t i e s 1964 34 3 New R e s i d e n t i a l C o n s t r u c t i o n Completions M e t r o p o l i t a n Vancouver 1958 to 1967 38 4 Regional S e t t i n g of White Rock C i t y 64a 5 White Rock C i t y 64b 6 Prospects f o r Y i e l d on Equity Investment 90 7 Prospects f o r Y i e l d on Equity Investment 91 8 Prospects f o r Y i e l d on Equity Investment 92 A-1 Percentage D i s t r i b u t i o n of F a m i l i e s and I n d i v i d u a l s by Expenditure Group by Age of Head: A l l F a m i l i e s and I n d i v i d u a l s , Eleven C i t i e s , 1964 109 CHAPTER I STUDY OUTLINE AND SUMMARY OF FINDINGS A. PURPOSE OF STUDY Canada, as w i t h many other n a t i o n s , has been experiencing considerable growth i n the number and p r o p o r t i o n of i t s e l d e r l y p o p u l a t i o n . Since the tu r n of the century, Canada's t o t a l p opulation has almost quadrupled w h i l e that segment of the popu l a t i o n f i f t y - f i v e years of age and over has i n -creased almost six-fold.''' Concomitant w i t h t h i s demographic change has been the e v e r - i n c r e a s i n g amount of l e i s u r e time a v a i l a b l e to i n d i v i d u a l s as a r e s u l t of sho r t e r working hours and a longer retirement p e r i o d . B r i t i s h Columbia has long been r e f e r r e d to as the "retirement haven" of Canada. Pop u l a t i o n s t a t i s t i c s i n d i c a t e that to a c e r t a i n degree t h i s i s t r u e . The two major m e t r o p o l i t a n areas of B r i t i s h Columbia, V i c t o r i a and Vancouver, both have a greater p r o p o r t i o n of e l d e r l y r e s i d e n t s than any other m e t r o p o l i t a n area i n Canada. From these o b s e r v a t i o n s , the idea f i r s t arose that perhaps an oppor-t u n i t y e x i s t e d i n B r i t i s h Columbia to e x p l o i t the market i m p l i c a t i o n s of the r e l a t i o n s h i p between age and housing needs. T h i s , i n t u r n , led to the for m u l a t i o n of the f o l l o w i n g hypothesis: A s u b s t a n t i a l segment of housing demand i n M e t r o p o l i t a n Vancouver i s  a t t r i b u t a b l e to e l d e r l y p e o p l e — t h e nature and extent of t h i s demand  would j u s t i f y the development of a retirement v i l l a g e on a commercial bas i s . - 2 -I t i s the purpose of t h i s paper to t e s t t h i s hypothesis and to pose any questions which might a r i s e . Before going any f u r t h e r , we must f i r s t d e f i n e c e r t a i n terms which w i l l be used f r e q u e n t l y throughout t h i s study. For the purposes of t h i s paper, a retirement v i l l a g e w i l l mean a planned, low den s i t y development of permanent b u i l d i n g s designed to house " a c t i v e " a d u l t s over the age of f i f t y - f i v e and equipped to provide a wide range of s e r v i c e s and l e i s u r e a c t i v i t i e s . The a c t u a l f e a s i b i l i t y a n a l y s i s w i l l r e f e r to a proposed v i l l a g e the c h a r a c t e r i s t i c s of which w i l l be s p e c i -f i e d i n d e t a i l l a t e r i n the study. Only v i l l a g e s developed and operated as a p r o f i t - y i e l d i n g investment w i l l f a l l under t h i s d e f i n i t i o n . This concept of a retirement v i l l a g e i s d i s t i n c t from the many community developments f o r the aged i n Canada and elsewhere i n i t i a t e d by c h a r i t a b l e or other n o n - p r o f i t o r g a n i z a t i o n s . A f u r t h e r d i s t i n c t i o n i s the absence of f a c i l i t i e s to care f o r r e s i d e n t s who are p h y s i c a l l y unable to care f o r themselves. Old age homes, t h e r e f o r e , do not f a l l under our c l a s s i f i c a t i o n . Throughout t h i s study reference w i l l be made to "the e l d e r l y " . In our s o c i e t y t h i s i s a very vague term u s u a l l y a p p l i e d to people i n the l a t t e r p art of t h e i r l i f e c y c l e and very o f t e n bearing l i t t l e r e l a t i o n s h i p to p h y s i c a l age but r a t h e r c h r o n o l o g i c a l age. Nevertheless, f o r the want of a b e t t e r term, t h i s one has been used to r e f e r to people over the age of f i f t y -f i v e . Obviously, many people f a l l i n g i n t o t h i s category would not be con-sid e r e d e l d e r l y i n the broad sense of the word. Reasons f o r s e l e c t i n g an age l i m i t of f i f t y - f i v e w i l l be brought out more c l e a r l y l a t e r when i t i s shown that the p o t e n t i a l market i s not confined to r e t i r e d people but a l s o to those contemplating retirement w i t h i n the f i v e or ten years ahead. The hypothesis r e f e r s s p e c i f i c a l l y to M e t r o p o l i t a n Vancouver. This - 3 -does not i n f e r that Vancouver has more p o t e n t i a l f o r t h i s type of develop-ment than, say, V i c t o r i a . We are asking whether i n f a c t Vancouver does have any potential--whether or not i t i s a superi o r market area than V i c t o r i a , i s immaterial as f a r as t h i s study i s concerned. I t must be emphasized that i t i s not the purpose of t h i s study to consider the f e a s i b i l i t y of various types of v i l l a g e s or to study the pro's and con's of d i f f e r e n t designs w i t h a view to proposing the "optimum" v i l l a g e . Instead, we are concerned w i t h the f e a s i b i l i t y of a s p e c i f i e d v i l l a g e , the c h a r a c t e r i s t i c s of which, are based on many of the features common to most retirement developments already i n e x i s t e n c e . B. METHODOLOGY In order to answer the questions posed by the hypothesis i t was necessary to i n v e s t i g a t e three broad aspects of the problem—each i n t e r -r e l a t e d . These involved an a n a l y s i s of the market (Chapter I I I ) , determination of a s u i t a b l e l o c a t i o n (Chapter I V ) , and a f i n a n c i a l a n a l y s i s of the proposed development (Chapter V I ) . In a d d i t i o n to these areas of study, the problems and needs of the e l d e r l y i n modern-day s o c i e t y are d e a l t w i t h (Chapter I I ) and another chapter i s devoted to the broad design and o p e r a t i o n a l s p e c i f i -c a t i o n s of the proposed v i l l a g e (Chapter V ) . The market a n a l y s i s c onsisted p r i m a r i l y of determining the expected demand f o r a retirement v i l l a g e as w e l l as the nature of t h i s demand. The general housing supply s i t u a t i o n was a l s o examined. In order to do t h i s , the general housing market i n Greater Vancouver was considered together w i t h an examination of the c h a r a c t e r i s t i c s of the popu l a t i o n w i t h regard to income, age d i s t r i b u t i o n , geographical d i s t r i b u t i o n , l i v i n g arrangements, spending - 4 -p a t t e r n s , e t c . In order to s e l e c t a s u i t a b l e l o c a t i o n i n Greater Vancouver f o r the proposed v i l l a g e , considerable use was made of research data p e r t a i n i n g to the needs and h a b i t s of the e l d e r l y i n the United S t a t e s . From these was formulated a set of l o c a t i o n c r i t e r i a w i t h which to choose a s i t e . As i t turned out, there were a number of l o c a t i o n s i n the Vancouver area which met these c r i t e r i a and r a t h e r than c o n s i d e r i n g a l l of these f e a s i b l e areas, one was s e l e c t e d and subjected to these c r i t e r i a . In the market a n a l y s i s White Rock had already suggested i t s e l f as a l i k e l y l o c a t i o n and f o r t h i s reason i t was subjected to a d e t a i l e d a n a l y s i s . The f i n a n c i a l a n a l y s i s was done f o r a proposed development p r e v i o u s l y s p e c i f i e d i n Chapter V. Estimates were made of c a p i t a l c o s t , operating expenses and revenues, and p r o j e c t e d cash f l o w s . From these estimates, y i e l d s on equity were c a l c u l a t e d f o r a v a r i e t y of s i t u a t i o n s i n which d i f -ferences were assumed w i t h regard to the cost of debt c a p i t a l , the r e t e n t i o n p e r i o d , and the r e v e r s i o n v a l u e . One of the p r i n c i p a l l i m i t a t i o n s of t h i s study i s that i t i s not comparative i n nature and, as a r e s u l t , f a i l s to provide s o l u t i o n s to prob-lems such as: (1) How l a r g e should the v i l l a g e be? ( 2 ) What mix of d w e l l i n g types should be included? (3) Should d w e l l i n g u n i t s be s o l d or rented out? (4) What f a c i l i t i e s should be provided i n order to maximize p r o f i t s ? (5) How does the expected r a t e of r e t u r n on t h i s p r o j e c t compare w i t h returns on other forms of investment? These points could w e l l form the b a s i s of another study i n which they - 5 -would be the independent variables. A further limitation is the lack of market evidence showing how much older people would be willing to pay to live in the village. In other words, what premium, i f any, w i l l older people be willing to pay for the benefits to be derived from living in a community planned to meet their needs as opposed to living in the typical housing units presently offered on the Vancouver housing market. Reference is frequently made throughout this study to retirement village experience in California. This state has been singled out because of the availability of data on privately developed retirement villages. Where possible, experience in other states w i l l be discussed. Before going on to the findings of this study, we w i l l f i r s t take a quick look at retirement villages in the United States. C. RETIREMENT VILLAGES IN THE UNITED STATES Retirement communities have existed in the U.S. for more than a 100 years, particularly in those states having a warm winter climate such as Arizona, Florida, and California. These early communities, unlike the retirement villages as defined in this paper, were composed of retired elderly people randomly seeking mild climates and low living costs. It has only been in about the last fifteen years, however, that private developers have recognized the market potential of a planned retirement community. This has resulted in a number of villages springing up in almost every state of the country. In 1966, in California alone there were over 38 community 2 developments f i t t i n g our description of a retirement village. It seems that retirement villages are an American invention. According to Glenn H. Beyer, retirement communities b u i l t f o r p r o f i t by p r i v a t e 3 developers are not found i n any of the other Western c o u n t r i e s . In e v a l u a t i n g the nature of retirement community development i n Great B r i t a i n and Western Europe, Wilma Donahue points out that there are few o l d age 4 communities f r e e from an " i n s t i t u t i o n a l f l a v o r . " Perusal of the N a t i o n a l D i r e c t o r y of Housing f o r Older People, 1965,^ re v e a l s each of these communities to be unique i n many r e s p e c t s . Wide d i f f e r e n c e s e x i s t w i t h respect to the number and type of housing u n i t s provided, tenancy arrangements, s e t t i n g ( r u r a l or urban), entrance r e q u i r e -ments, v a r i e t y of r e c r e a t i o n and other f a c i l i t i e s provided, e t c . There i s considerable v a r i a t i o n i n the degree of s e l f - s u f f i c i e n c y of these v i l l a g e s . Some of the l a r g e r developments are small towns i n them-selves i n that they have a f u l l complement of f a c i l i t i e s to meet most of the needs of t h e i r e l d e r l y r e s i d e n t s . Examples of these are the communities b u i l t by the Del E. Webb Corporation c o n s i s t i n g of Sun C i t y , A r i z o n a ; Sun C i t y , F l o r i d a ; and Sun C i t y and Kern C i t y , C a l i f o r n i a . They provide complete r e c r e a t i o n f a c i l i t i e s , shopping cen t r e s , town h a l l , post o f f i c e , and other amenities. Other examples include the three L e i s u r e World developments i n C a l i f o r n i a of the Rossmoor Corp o r a t i o n , one of which accommodates about 18,000 e l d e r l y people. With the exception of these large v i l l a g e s , most retirement communities are dependent to v a r y i n g degrees on the outside community f o r some r e c r e a t i o n and s o c i a l f a c i l i t i e s . The r e c r e a t i o n f a c i l i t i e s g e n e r a l l y found on the premises or c l o s e by i n a " t y p i c a l " v i l l a g e include a swimming p o o l , g o l f course, community a d m i n i s t r a t i o n c e n t r e , dance h a l l , s h u f f l e board, and other popular f a c i l i t i e s . A c t i v e sports such as tennis are l e s s i n evidence - 7 -than the more rel a x e d forms of r e c r e a t i o n . Commercial f a c i l i t i e s such as beauty p a r l o r s , barbers, and foodstores are o f t e n found on the premises. Most of these v i l l a g e s are not t r u l y retirement i n nature. Entrance age requirements are g e n e r a l l y much lower than the commonly accepted r e t i r e -ment age of s i x t y - f i v e and, i n many cases, there i s no age r e q u i r e m e n t — o n l y c h i l d r e n are excluded. I t i s evident that retirement v i l l a g e s i n the United States have been recognized by p r i v a t e entrepreneurs as a p r o f i t a b l e form of housing develop-ment. According to Barker, t h i s i s part of the housing i n d u s t r y that has shown considerable growth i n recent years and, as the retirement v i l l a g e concept becomes b e t t e r known to the p u b l i c , even stronger growth should be exper ienced i n the f u t u r e . D. SUMMARY OF FINDINGS 1. The Market I t i s evident from po p u l a t i o n s t a t i s t i c s and p r o j e c t i o n s , that the e l d e r l y ( f i f t y - f i v e years and over) are becoming an i n c r e a s i n g l y important segment of the t o t a l p o p u l a t i o n i n Canada both i n terms of absolute numbers as w e l l as percentage of t o t a l p o p u l a t i o n . In the 25 years from 1941 to 1966, Canada's e l d e r l y p o p u l a t i o n increased by 1.3 m i l l i o n persons or 80 per cent. Over the same period t o t a l p o p u l a t i o n increased at a slower r a t e of 74 per cent. From the market a n a l y s i s i n Chapter IV, i t appears that M e t r o p o l i t a n Vancouver holds considerable market p o t e n t i a l f o r the development of a r e t i r e -ment v i l l a g e . In 1966 almost one i n every f i v e persons i n M e t r o p o l i t a n Vancouver was over the age of f i f t y - f i v e - - t h e lowest r a t i o f o r any metro-p o l i t a n area i n Canada w i t h the exception of V i c t o r i a w i t h about one i n every four persons f a l l i n g i n t o the e l d e r l y category. Considerable d i f f e r e n c e s e x i s t among the m u n i c i p a l i t i e s of Vancouver i n the age d i s t r i b u t i o n s of t h e i r p o p u l a t i o n s . The c i t y of White Rock i s e x c e p t i o n a l i n that 47 per cent of i t s t o t a l p o p u l a t i o n i n 1966 was over the age of f i f t y - f i v e . The c l o s e s t p r o p o r t i o n to t h i s was Vancouver C i t y w i t h 24 per cent. Port Moody w i t h 8 per cent had the lowest p r o p o r t i o n of e l d e r l y r e s i d e n t s . Most of the e l d e r l y i n Greater Vancouver are married couples w i t h widowed i n d i v i d u a l s forming the next most populous group. With regard to household formation, i t i s estimated that t o t a l house-ho l d formation i n M e t r o p o l i t a n Vancouver w i l l average 8,000 households per year f o r the next ten y e a r s . Of these about 2,100 are expected to be house-holds w i t h the head over f i f t y - f i v e . This f i g u r e gives an i n d i c a t o r of the annual increase i n t o t a l market demand f o r e l d e r l y housing i n Vancouver. N a t u r a l l y , our proposed retirement v i l l a g e w i l l appeal to only some of these e l d e r l y households. The e l d e r l y as a group i n Canada, have incomes somewhat lower than the n a t i o n a l average. The 55 to 64 age group, however, had an average income of $6,221 i n 1965 which was about equal to the n a t i o n a l average. The lower incomes of the e l d e r l y are going to r e s t r i c t the market f o r our v i l l a g e to those e l d e r l y able to a f f o r d new housing. U n f o r t u n a t e l y , f i g u r e s are not a v a i l a b l e on the incomes of the e l d e r l y i n Vancouver. In 1965, f o r Canada as a whole, 38 per cent of f a m i l i e s w i t h head aged 55 to 64 y e a r s , had i n -comes above the n a t i o n a l average. From t h i s can be conjectured that there are a number of e l d e r l y households i n Greater Vancouver w i t h above average incomes. Two other points coming out of the market a n a l y s i s are that the e l d e r l y as a group spend a greater percentage of t h e i r t o t a l expenditure on s h e l t e r i . e . 19.7 per cent, than any other age group and they tend to be more i n c l i n e d to owning t h e i r d w e l l i n g u n i t s than other age groups. 2. The L o c a t i o n White Rock has been s e l e c t e d as a s u i t a b l e l o c a t i o n f o r the proposed retirement v i l l a g e development. This was done on the b a s i s of f i v e c r i t e r i a to be used i n the s e l e c t i o n of a s i t e . These were: (1) A s i t e f a c i l i t a t i n g contact between the v i l l a g e r e s i d e n t s and t h e i r f r i e n d s and r e l a t i v e s . (2) A s i t e a l l o w i n g reasonably easy access to places of work and employment o p p o r t u n i t i e s . (3) A s i t e conveniently c l o s e to shopping, r e c r e a t i o n , p u b l i c and i n s t i t u t i o n a l f a c i l i t i e s . (4) A s i t e l i k e l y to s a t i s f y the d e s i r e s of the e l d e r l y w i t h regard to independent l i v i n g arrangements, p r i v a c y , and quietness. (5) A s i t e which i s not p r o h i b i t i v e because of p r i c e , a t t i t u d e of l o c a l m u n i c i p a l i t y , or topographical f e a t u r e s . Although White Rock met a l l these c r i t e r i a , t h i s does not suggest that t h i s would be the optimum l o c a t i o n . I t was not p o s s i b l e i n t h i s study to consider i n d e t a i l the c h a r a c t e r i s t i c s of a l l the other m u n i c i p a l i t i e s i n M e t r o p o l i t a n Vancouver. White Rock, because of i t s r e l a t i v e l y l a rge e l d e r l y p o p u l a t i o n , suggested i t s e l f from the outset as a l i k e l y l o c a t i o n . This was borne out by the subsequent a n a l y s i s of the c h a r a c t e r i s t i c s of the c i t y . - 10 -The p r i n c i p a l advantages of White Rock as a f e a s i b l e l o c a t i o n are: (1) The Deas I s l a n d Freeway a l l o w i n g r e l a t i v e l y easy downtown access to Vancouver. (2) The number of e l d e r l y already r e s i d i n g i n White Rock r e s u l t i n g i n an environment geared to the needs of the e l d e r l y . This i s revealed i n the types of r e c r e a t i o n f a c i l i t i e s , s o c i a l o r g a n i -z a t i o n s , shopping f a c i l i t i e s , and medical f a c i l i t i e s a v a i l a b l e , and a c i t y c o u n c i l sympathetic to the needs of the e l d e r l y . To a c e r t a i n extent, White Rock i s already a retirement town. (3) Land i s r e a d i l y a v a i l a b l e and r e l a t i v e l y cheap. 3. Features of Proposed V i l l a g e and F i n a n c i a l Prospects In Chapter V, the proposed v i l l a g e i s described i n some d e t a i l . In essence i t i s to c o n s i s t of 160 s i n g l e detached houses, 60 f o u r p l e x u n i t s , and 40 walk-up apartment u n i t s . Other improvements w i l l i n c l u d e a community centre b u i l d i n g , r e c r e a t i o n f a c i l i t i e s , and about 10 acres of landscaped open area t r a v e r s e d w i t h foot paths. The s i n g l e detached houses are to be s o l d when completed w h i l e the remaining d w e l l i n g u n i t s w i l l be rented out. The community centre b u i l d i n g and other f a c i l i t i e s w i l l be operated on a club b a s i s w i t h v o l u n t a r y membership. . From the c o s t - b e n e f i t a n a l y s i s i n Chapter VI, i t i s estimated that the p r o j e c t w i l l r e q u i r e an i n i t i a l c a p i t a l o u t l a y of $4,600,000. A f t e r a nine month s t a r t i n g - u p p e r i o d , the detached housing u n i t s w i l l be s o l d r e s u l t i n g i n net revenue of $3,350,000. The pro-forma operating statement i n d i c a t e s net o p e r a t i n g income of $110,000 per year. I t i s assumed that o p e r a t i o n of the community centre b u i l d i n g and r e c r e a t i o n f a c i l i t i e s w i l l be operated on - 11 -a n o n - p r o f i t b a s i s w i t h the club fees of members o f f s e t t i n g a l l operating expenses. The c a p i t a l cost of these f a c i l i t i e s are a l l o c a t e d on a per d w e l l i n g u n i t b a s i s and w i l l be recaptured from house sales and r e n t a l revenues over four y e a r s . I t i s estimated that f o r the f i r s t ten years of o p e r a t i o n , the p r o j e c t w i l l operate at a net l o s s f o r tax purposes. C a p i t a l cost allowances plus debt i n t e r e s t charges are expected to exceed the $110,000 operating income i n each of the f i r s t ten years. As there are no income tax payments to make, cash flow before debt payments and c a p i t a l recapture w i l l be $110,000 each year. Net cash flow to equity c a l c u l a t i o n s made f o r mortgage i n t e r e s t r a t e s of 8.00 per cent 8.50 per cent, and 9.00 per cent i n d i c a t e that the p r o j e c t w i l l generate s u f f i c i e n t cash i n the f i r s t ten years to meet a l l necessary outgoings. Should debt c a p i t a l be acquired at more than 9.00 per cent i n t e r e s t , there would not be s u f f i c i e n t cash each year to meet mortgage payments. Y i e l d on e q u i t y i s c a l c u l a t e d under a number of assumptions regarding mortgage i n t e r e s t r a t e s , h o l d i n g p e r i o d , and r e v e r s i o n v a l u e . The r e s u l t s of these c a l c u l a t i o n s r e v e a l wide d i f f e r e n c e s i n expected y i e l d s ranging from 0 per cent to 29 per cent depending upon the assumptions. The e f f e c t of mortgage r a t e s , the h o l d i n g period and the r e v e r s i o n value upon equity y i e l d s are brought out q u i t e c l e a r l y i n the summary t a b l e s . The c o s t - b e n e f i t a n a l y s i s does not provide an answer as to whether or not the proposed v i l l a g e i s f i n a n c i a l l y f e a s i b l e but r a t h e r presents the p r o s p e c t i v e i n v e s t o r w i t h a set of expected y i e l d s under p a r t i c u l a r circum-stances. The i n v e s t o r i s then l e f t to decide whether to go ahead w i t h t h i s - 1 2 -project or to invest his money elsewhere where the y ie ld is expected to be higher on a similar r i sk investment. - 13 -Footnotes ''"Dominion Bureau of S t a t i s t i c s ; Selected S t a t i s t i c s on the Older  P o p u l a t i o n of Canada, Catalogue No. 91-507, Ottawa, 1964. 2 Michael B. Barker; C a l i f o r n i a Retirement Communities, S p e c i a l Report #2, Center f o r Real E s t a t e and Urban Economics, U n i v e r s i t y of C a l i f o r n i a , B e r keley, 1966. 3 Glenn H. Beyer and F. H. J . N i e r s t r a s z ; Housing the Aged i n Western  Co u n t r i e s , Center f o r Housing and Environmental S t u d i e s , C o r n e l l U n i v e r s i t y , I t h a c a , New York, 1967. 4 Wilma Donahue, "European Experience i n Operation and S e r v i c e s " , i n Retirement V i l l a g e s , e d i t e d by Ernest W. Burgess, U n i v e r s i t y of Michigan, 1961. "The N a t i o n a l C o u n c i l on the Aging; A N a t i o n a l D i r e c t o r y on Housing  f o r Older People, 1965, New York, 1965. ^Michael B. Barker; 0p_. C i t . CHAPTER I I THE AGED IN PERSPECTIVE In t h i s study the e l d e r l y have been defined as persons over the age of f i f t y - f i v e . This f i g u r e was determined by market c o n s i d e r a t i o n s and would include a number of people who would not normally be considered e l d e r l y . C h r o n o l o g i c a l age very o f t e n bears l i t t l e r e l a t i o n to the e f f e c -t i v e age of a person--some people are o l d at f o r t y w h i l e others are young at e i g h t y . In s p i t e of t h i s , s o c i e t y tends to stereotype people according to the age group i n which they f a l l . People who have reached retirement age are expected to behave from then onwards i n a manner g e n e r a l l y considered c h a r a c t e r i s t i c of the aged. In t h i s chapter I intend to examine t h i s a t t i t u d e of s o c i e t y towards the e l d e r l y and t h e i r p o s i t i o n i n the s o c i a l s t r u c t u r e of modern-day s o c i e t y . In a d d i t i o n to t h i s , p h y s i c a l and other problems of the aged w i l l be d i s c u s s e d . A general understanding of the problems and needs of the e l d e r l y i s imperative i f one i s to develop a retirement v i l l a g e . A. THE AGING PROCESS Aging i s a gradual and i r r e v e r s i b l e process which overcomes every l i v i n g organism. A slowing down of the c e l l r e p roduction process marks the beginning of what i s c a l l e d middle-and o l d age. The study of the aging process, gerontology, deals w i t h many d i f f e r e n t aspects of the aging problem. - 15 -The only aspect which need concern us here i s the slowing down i n walking and other general movement u s u a l l y more apparent i n older people. A l s o a s s o c i a t e d w i t h t h i s slowing down of movement i s shortness of breath due to poorer f u n c t i o n i n g of some i n t e r n a l organs. Frequently movement i s c a r r i e d out more c a u t i o u s l y because of the knowledge that o l d e r people seem more prone to f a l l i n g and that o l d bones do not k n i t as r a p i d l y or as thoroughly as young bones do. This r e s t r i c t e d m o b i l i t y means that the e l d e r l y w i l l place a greater premium on the p r o x i -mity of des i r e d objects than would younger people. C e r t a i n other housing design c o n s i d e r a t i o n s stem from the r e s t r i c t e d m o b i l i t y of the e l d e r l y . These would include the absence of high f l i g h t s of steps or steep g r a d i a n t s ; cupboards and other household items arranged so as to minimize the need to bend, s t r e t c h or climb; s l i p r e s i s t a n t walking sur-faces . Other f a i l i n g s i n the senses of the e l d e r l y such as s i g h t and hearing defects should not have any s i g n i f i c a n t i n f l u e n c e on housing c o n s i d e r a t i o n s f o r the e l d e r l y . B. THE ELDERLY IN MODERN-DAY SOCIETY The k i n d of treatment o l d people r e c e i v e i s u s u a l l y determined by the values of a s o c i e t y at a p a r t i c u l a r time. These values are p a r t l y the r e s u l t of the stereotype s o c i e t y has of the e l d e r l y . For example, o l d people are p i c t u r e d as being unable to do any productive work and are g e n e r a l l y r e t i r e d by employers at s i x t y - f i v e i r r e g a r d l e s s of the a b i l i t i e s of the employee. The e l d e r l y i n modern i n d u s t r i a l s o c i e t i e s face c e r t a i n problems - 16 -u s u a l l y not encountered by t h e i r counterparts i n p r i m i t i v e or a g r a r i a n s o c i e t i e s . In most Western s o c i e t i e s a premium i s placed on youth w i t h the aged assigned a passive r o l e i n everyday a c t i v i t i e s . The functi o n s p a r t i c u l a r l y a s c r i b e d to the young have tended to be those i n v o l v i n g p h y s i c a l prowess, c e r t a i n types of manual s k i l l s , quickness, a l e r t n e s s , e t c . Those fu n c t i o n s r e q u i r i n g experience, wisdom, and r e s p o n s i b i l i t y have tended to be as c r i b e d to the ol d e r groups. These l a t t e r f u n c t i o n s have not held p a r t i c u l a r status i n an achievement o r i e n t a t e d s o c i e t y . The t r u l y s t a tus p o s i t i o n s such as judges, r e l i g i o u s l e a d e r s , p o l i t i c a l l e a d e r s , e t c . , have been too few i n number to accommodate the large numbers of e l d e r -l y people. The f a m i l y , which i s s t i l l one of our major s o c i a l i n s t i t u t i o n s , has been undergoing considerable changes i n u r b a n - i n d u s t r i a l s o c i e t i e s . At the moment i t i s i n a t r a n s i t i o n a l s t a t e going from the extended type to the small two-generation f a m i l y . In Canada, as i n most u r b a n - i n d u s t r i a l n a t i o n s , there i s a trend towards two-generation f a m i l i e s i n which ascribed statuses of age and sex are over r u l e d by q u a l i t i e s such as education and general a b i l i t y . This i s i n co n t r a s t to the extended f a m i l y system found i n coun-t r i e s such as In d i a and China where i n d i v i d u a l s i n the fa m i l y are assigned status p o s i t i o n s i n accordance w i t h t h e i r age. In Western s o c i e t i e s , the fa m i l y attempts to prepare the c h i l d r e n f o r p a r t i c i p a t i o n i n the l a r g e r s o c i e t y whereas i n the extended f a m i l y system the c h i l d i s conditioned f o r h i s r o l e i n the fa m i l y o r g a n i z a t i o n . In Canada i t i s expected that the c h i l d r e n i n the fa m i l y w i l l even-t u a l l y leave the p a r e n t a l home and set up t h e i r own households on reaching s o c i a l m aturity and economic independence. Parents u s u a l l y do not make any - 17 -c l a i m on t h e i r c h i l d r e n to support them i n l a t e r l i f e . In the days of m u l t i - g e n e r a t i o n f a m i l i e s , the f a m i l y head used to i n v o l v e the f u n c t i o n a l r o l e of d i r e c t i n g the whole f a m i l y and c o n t r o l l i n g i t s d e s t i n y — t h i s was a p o s i t i o n of considerable s t a t u s . Today, when the c h i l d r e n leave home to set up t h e i r own family u n i t s , the f a m i l y head experiences a loss i n s t a t u s . This "empty-nest" phase of the f a m i l y l i f e c y c l e has been aggravated by a trend towards e a r l i e r marriages. T h i s , combined w i t h fewer c h i l d r e n and a longer l i f e expectancy, has r e s u l t e d i n the lengthening of the l i f e men and women can expect to l i v e beyond the marriage of t h e i r l a s t c h i l d . A f u r t h e r l o s s i n status has been experienced by the e l d e r l y i n u r b a n - i n d u s t r i a l s o c i e t y w i t h regard to t h e i r r o l e as "guardians of t r a d i -t i o n " . P r i o r to the extensive use of w r i t t e n language and communications media, the younger generation looked to i t s e l d e r s f o r i n s t r u c t i o n on what was proper, what was to be done, and what was to be b e l i e v e d . The o l d e s t generation, by v i r t u e of i t s experience was i n a p o s i t i o n to pass on o r a l l y the t r a d i t i o n s of a s o c i e t y to the younger generations. This f u n c t i o n i n modern Western s o c i e t i e s has g r a d u a l l y been eroded away and d i s p l a c e d by other inform a t i o n dispensing systems such as t e l e v i s i o n , l i t e r a t u r e , e t c . The young are no longer so dependent on t h e i r e l d e r s f o r guidance on matters of t r a d i t i o n and i n t e r p r e t a t i o n of the nature and character of the s o c i e t y i n which they l i v e . C. PROBLEMS OF RETIREMENT Compulsory retirement i n the o l d e r , predominantly r u r a l s o c i e t i e s tended not to be a problem. With the m u l t i - g e n e r a t i o n f a m i l y u n i t , the o l d e r people remained as long as they l i v e d i n the u n i t . An o l d man, f o r - 18 -example, would work on the farm f o r as long as he was p h y s i c a l l y a b l e . S i m i l a r l y , anyone working f o r h i m s e l f was i n a p o s i t i o n to continue working f o r as long as he pleased. In our s o c i e t y , however, most working people are i n the employ of others and are faced w i t h an imposed retirement age which bears l i t t l e r e l a t i o n to whether or not the person i s able to con-t i n u e working. Apart from the economic n e c e s s i t y to work, a t y p i c a l person derives other b e n e f i t s from h i s employment which he must u s u a l l y give up upon r e t i r e m e n t . As mentioned e a r l i e r , our s o c i e t y i s p a r t i c u l a r l y a c t i v i t y o r i e n -tated p l a c i n g a premium on the c h a r a c t e r i s t i c s of the young. The value of an i n d i v i d u a l i s o f t e n l a r g e l y determined and judged by what i s f e l t to be ' h i s c o n t r i b u t i o n i n doing important t h i n g s . Very o f t e n the status p o s i t i o n of a man and h i s f a m i l y as w e l l as h i s place i n s o c i e t y , i s determined by the k i n d of work he does. A working person, t h e r e f o r e , when reaching r e t i r e -ment age i s faced w i t h a l o s s of p r e s t i g e i n h i s s o c i a l p o s i t i o n . In addi-t i o n to t h i s , one of the values of our s o c i e t y i s that of preserving the l i v e s of i t s members. So that you have the s i t u a t i o n i n which a c u l t u r e which enables a longer l i f e a l s o decrees that people must accept a l o s s i n s t a t u s over t h i s longer retirement p e r i o d . Besides the d e s i r e to continue working i n order to maintain h i s p o s i t i o n i n s o c i e t y , a working person very o f t e n i s faced w i t h being cut o f f from many of h i s f r i e n d s and other work a s s o c i a t e s . A sudden r e d u c t i o n i n the everyday face to face r e l a t i o n s h i p s w i t h other people coupled w i t h increased l e i s u r e time, can have a profound emotional e f f e c t upon a r e t i r e d person. A f u r t h e r prospect f a c i n g the r e t i r e d i s a drop i n income e i t h e r i n - 1 9 -money or real terms through inflation. This very often means a reduction in one's scale of living and possibly a change in living arrangements to a less expensive home and neighbourhood. The proximity of one's place of work now becomes unimportant and is a further incentive for a retired person to seek another home. Another problem usually associated with the advent of retirement is the increase in leisure time of the lack of work substitutes. A person recently retired must now find ways in which to occupy those hours previously devoted to gainful employment. This would be another factor rendering his existing living arrangements inadequate—he might now be tempted to move to a location closer to some leisure time activity or work substitute. In short then, retirement can be a traumatic experience requiring considerable adjustment on the part of recently retired people. It alters their lives, lowers their prestige, lessens their income, cuts them off from the friendships and associations formed at work, and leaves them with the problem of finding meaningful work substitutes. Consequently, retirement by its very nature in Western societies, creates b u i l t - i n pressures on the elderly man to change not only his type of housing but its location as well. This chapter has dealt only generally with the problems facing the elderly. Chapter IV deals more specifically with the housing needs and preferences of the elderly. - 20 -References M a t e r i a l f o r t h i s chapter was obtained from the f o l l o w i n g references: Joseph T. Drake; The Aged i n American S o c i e t y , The Ronald Press Co., New York, 1958. Jeanne G. G i l b e r t ; Understanding Old Age, The Ronald Press Co., New York, 1952. Betty Ingleby and Margaret Yorath; L i v i n g With Old Age, Robert Hale, London, 1966. Elon H. Moore; The Nature of Retirement, MacMillan Co., New York, 1959. T a l c o t t Parsons; "The C u l t u r a l Background of Today's Aged", i n P o l i t i c s of Age, e d i t e d by Wilma Donahue and C l a r k T i b b i t t s , U n i v e r s i t y of Michigan, Ann Arbor, 1962. Peter Townsend; The Family L i f e of Old People, Routledge and Kegan P a u l , London, 1957. CHAPTER I I I MARKET ANALYSIS In t h i s chapter the housing market g e n e r a l l y and the market f o r retirement housing s p e c i f i c a l l y , i n M e t r o p o l i t a n Vancouver w i l l be examined i n an attempt to e s t a b l i s h the extent and nature of housing demand and supply. Where p o s s i b l e , we w i l l t r y to gauge the impact our proposed accom-modation w i l l have on t h i s market. This accommodation, as described l a t e r w i l l c o n s i s t of 160 s i n g l e detached houses, 60 f o u r p l e x u n i t s , and 40 walk-up apartment u n i t s . Before c o n s i d e r i n g aspects of demand and supply, we must define what we mean by the market. From how f a r a f i e l d i s our v i l l a g e l i k e l y to draw res idents ? In Chapter IV i t i s decided that our community development i s to be located i n such an area as to appeal to people wishing to be c l o s e to f r i e n d s and r e l a t i v e s as w e l l as places of present and prospective employment. This i s not to be a retirement v i l l a g e founded on some r e c r e a t i o n a l feature away from the busy me t r o p o l i t a n area. With these c o n s i d e r a t i o n s i n mind, we can expect that the m a j o r i t y of people u l t i m a t e l y a t t r a c t e d to our v i l l a g e w i l l be those p r e s e n t l y r e s i d i n g i n the Greater Vancouver area. The people to whom we are appealing w i l l t y p i c a l l y be f i f t y - f i v e years of age and over, married or s i n g l e , of middle to upper income, and e i t h e r r e t i r e d or c l o s e to r e t i r e m e n t . - 22 -A. DEMAND ASPECTS OF THE MARKET In t r y i n g to e s t a b l i s h the nature and extent of the demand f o r our p r o s p e c t i v e v i l l a g e f a c i l i t i e s , we w i l l consider c h a r a c t e r i s t i c s and trends of the p o p u l a t i o n w i t h regard to s i z e , geographical d i s t r i b u t i o n , sex, m a r i t a l s t a t u s , households, d w e l l i n g s , f a m i l i e s , incomes, and expenditure p a t t e r n s . 1. Population Size and Geographical D i s t r i b u t i o n To begin w i t h , a few general observations on the population of Canada. Census data r e v e a l s that i n 1966 Canada's pop u l a t i o n t o t a l e d twenty m i l l i o n people. Of these, about three m i l l i o n or 15 per cent, were people f i f t y - f i v e years of age or o l d e r . For the want of a b e t t e r word, we w i l l r e f e r to per-sons over f i f t y - f i v e years of age as " e l d e r l y " . This r a t i o of e l d e r l y to t o t a l p o p u l a t i o n was about the same as e x i s t e d i n 1961. In the f i v e years 1961 to 1966, the e l d e r l y increased from 2.7 m i l l i o n to 3.0 m i l l i o n — o r a 12 per cent i n c r e a s e . P r o j e c t i o n s by the Economic Co u n c i l of Canada i n d i c a t e that the e l d e r l y w i l l number 3.8 m i l l i o n by 1976 and c o n s t i t u t e about 16 per cent of the t o t a l p o p u l a t i o n . ^ The point of a l l t h i s i s that the e l d e r l y account f o r a s i g n i f i c a n t number of the t o t a l p o p u l a t i o n and are l i k e l y to continue to do so i n the years ahead. Table A-I i n the Appendix shows the d i s t r i b u t i o n of p o p u l a t i o n by major m e t r o p o l i t a n areas of the country. While Montreal i n 1966 had the l a r g e s t number of e l d e r l y persons, V i c t o r i a had the highest number of e l -d e r l y per thousand po p u l a t i o n i n Canada. V i c t o r i a had 24 per cent of i t s i n h a b i t a n t s i n the over 55 year age group followed by Vancouver (19 per cent) Winnipeg (17 per c e n t ) , Toronto (15 per c e n t ) , Montreal (14 per cent) and - 23 -Ottawa (13 per c e n t ) . From Table I below can be seen the changes i n the e l d e r l y p o p u l a t i o n f o r the va r i o u s m e t r o p o l i t a n areas between 1961 and 1966. Greater Vancouver's e l d e r l y p o p u l a t i o n increased at a r a t e s l i g h t l y below the n a t i o n a l average. TABLE I POPULATION FIFTY-FIVE YEARS OF AGE AND OVER BY METROPOLITAN AREAS 1961 AND 1966 (Population i n Thousands) Canada Vancouver V i c t o r i a Ottawa Montreal Toronto Winnipeg 1966 3019.2 168.4 41.5 64.7 330.8 329.9 88.2 1961 2680.6 150.7 37.2 55.3 282.9 285.3 78.9 Increase 338.7 17.7 . 4.3 9.4 47.9 44.6 9.3 % Increase 12% 11% 12% 17% 17% 15% 11% Source: D.B.S. Census Population p r o j e c t i o n s f o r the m u n i c i p a l i t i e s of Greater Vancouver are given i n Table A - I I i n the Appendix. I t i s evident from t h i s t a b l e that very l i t t l e growth i s expected i n the c e n t r a l urban area and that the main growth w i l l probably occur i n the o u t l y i n g areas, p r i n c i p a l l y Surrey, Delta and the U n i v e r s i t y Endowment Lands. By 1976 the t o t a l p o p u l a t i o n of M e t r o p o l i t a n Vancouver i s estimated to increase from 892,000 i n 1966 to 1,186,000—an increase of 33 per cent. Increases i n D e l t a , Surrey and the U n i v e r s i t y Endowment Lands are proj e c t e d to be 92 per cent, 107 per cent and 400 per cent - 24 -r e s p e c t i v e l y over t h i s p e r i o d . In M e t r o p o l i t a n Vancouver approximately 168,000 of the t o t a l popu-l a t i o n of 892,000 were over f i f t y - f i v e years of age i n 1966. Expressed another way, about 190 of every 1,000 persons were e l d e r l y according to our d e f i n i t i o n . Table I I gives a breakdown of the e l d e r l y population f o r the m e t r o p o l i t a n Census areas of Vancouver. A feature of t h i s t a b l e i s the r e l a t i v e l y l a r ge p r o p o r t i o n of e l d e r l y l i v i n g i n White Rock—47 per cent of the t o t a l p o p u l a t i o n . The c l o s e s t p r o p o r t i o n to t h i s i s 24 per cent i n Vancouver c i t y followed by New Westminster w i t h 22 per cent. The remaining areas have e l d e r l y i n h a b i t a n t s ranging from 8 per cent to 19 per cent of t o t a l p o p u l a t i o n . U n f o r t u n a t e l y , p r o j e c t i o n s f o r e l d e r l y p o p u l a t i o n growth are u n a v a i l -able s p e c i f i c a l l y f o r M e t r o p o l i t a n Vancouver. As a rough i n d i c a t i o n , i t might be u s e f u l to use p r o j e c t i o n s made by the Economic Co u n c i l of Canada f o r the whole of Canada. They expect a 27 per cent increase i n the e l d e r l y p o p u l a t i o n over the ten-year period 1966 to 1976. Applying t h i s percentage to the Greater Vancouver e l d e r l y p o p u l a t i o n i n 1966, we can expect a t o t a l of 214,000 e l d e r l y persons by 1976. This f i g u r e , n a t u r a l l y , assumes an increase i n e l d e r l y matching the n a t i o n a l average i n c r e a s e . 2. Sex and M a r i t a l Status C h a r a c t e r i s t i c s of the P o p u l a t i o n Table I I I shows the composition of the e l d e r l y p o p u l a t i o n by m a r i t a l status and sex f o r Canada and M e t r o p o l i t a n Vancouver i n 1966. The d i s t r i -b u t i o n i n Vancouver does not appear to d i f f e r s i g n i f i c a n t l y from that of the country as a whole. Married persons c o n s t i t u t e by f a r the l a r g e s t segment of the e l d e r l y p o p u l a t i o n (62.3 per cent) followed by the widowed group - 25 -TABLE I I POPULATION FIFTY-FIVE YEARS OF AGE AND OVER FOR CENSUS METROPOLITAN AREAS OF VANCOUVER 1966 (Population i n Thousands) Male Female T o t a l E l d e r l y Popultn ' i . T o t a l Popultn. Percent of T o t a l Popultn. Metro Vancouver 80.5 87.8 168.4 892.3 19% Vancouver C i t y 46.4 51.0 97.4 410.4 24% Burnaby 8.0 8.7 16.7 112.0 15% Coquitlam 2.5 2.6 5.1 40.9 12% D e l t a 1.3 1.2 2.5 20.7 12% Fraser M i l l s *- - - .2 12% New Westminster 3.8 4.5 8.3 38.0 22% North Vane. C i t y 2.1 2.5 4.6 26.9 17% North Vane. Munc. 2.2 2.4 4.6 48.1 10% Port Coquitlam 0.6 0.6 1.2 11.1 10% Port Moody 0.3 0.3 0.6 7.0 8% Richmond 2.6 2.5 5.1 50.5 10% Surrey 6.2 5.8 12.0 81.8 15% Univ. End. Lands 0.2 0.2 0.4 3.0 16% West Vancouver 2.6 3.3 5.9 32.0 19% White Rock 1.6 2.0 3.6 7.8 47% •J Unorganized - - .1 .7 17% Indian Reserves - - .1 1.3 9% *Amount i n s i g n i f i c a n t Source.: D.B.S. Census. - 26 -TABLE I I I POPULATION FIFTY-FIVE YEARS OF AGE AND OVER BY MARITAL STATUS AND SEX IN METROPOLITAN VANCOUVER AND CANADA 1966 (Population i n Thousands) Popu l a t i o n Canada Percent of T o t a l P o p u l a t i o n Metro Vancouver Percent of T o t a l T 319.5 10.7% 16.6 9.8% S i n g l e M 158.2 5.3 9.9 5.9 F 161.3 5.4 6.7 3.9 T 1,955.8 64.8 104.8 62.3 Married M 1,122.2 37.2 60.0 35.7 F 833.6 27.6 44.8 26.6 T .727.9 24.0 44.5 26.4 Widowed M 171.7 5.7 9.4 5.6 F 556.2 18.3 35.1 20.8 T 16.1 .5 2.5 1.5 Divorced M 8.0 .2 1.1 .7 F 8.1 .3 1.4 .8 T o t a l 3,019.3 100.0 168.4 100.0 Source: D.B.S. Census - 27 -(26.4 per c e n t ) . A noteworthy fe a t u r e revealed by t h i s t a b l e i s the r e l a t i v e l y h i g h p r o p o r t i o n of widowed females. This i s a demographic feature of most urban populations i n North America. This d i s p a r i t y i n numbers between widowed males and females i s p a r t l y a t t r i b u t a b l e to the lower l i f e expectancy of males. In M e t r o p o l i t a n Vancouver there were 35,000 widowed females l i v i n g i n 1966. 3. Household, Dwelling and Family C h a r a c t e r i s t i c s of the Population We w i l l use d e f i n i t i o n s of household, d w e l l i n g and f a m i l y as set out by the Dominion Bureau of S t a t i s t i c s . A household c o n s i s t s of a person or a group of persons occupying one d w e l l i n g . A dwe11ing i s a s t r u c t u r a l l y separate set of l i v i n g quarters w i t h a p r i v a t e entrance e i t h e r from outside the b u i l d i n g or from a common h a l l i n s i d e ; the entrance must not be through anyone e l s e ' s l i v i n g q u a r t e r s . A f a m i l y c o n s i s t s of a husband and w i f e (with or without c h i l d r e n who have never married) or a parent w i t h one or more c h i l d r e n never married, l i v i n g together i n the same d w e l l i n g . In 1966 there were 5.2 m i l l i o n f a m i l y and non-family households i n Canada. P r o j e c t i o n s by the Economic C o u n c i l of Canada i n d i c a t e that t h i s number w i l l increase to 6.8 m i l l i o n households by 1976. This means an average annual increase of 155,600 households. I t i s expected that about 93 per cent of t h i s annual increase w i l l be a t t r i b u t a b l e to f a m i l y forma-t i o n w h i l e the remainder w i l l be due to households set up by unattached i n d i v i d u a l s . In the Greater Vancouver area there were 272,000 households i n 1966. - 28 -Of t h i s t o t a l 212,000 (78 per cent) were f a m i l i e s w h i l e the remainder were unattached i n d i v i d u a l s . These f i g u r e s suggest that there are a greater p r o p o r t i o n of non-family households i n M e t r o p o l i t a n Vancouver than i n the country as a whole—83 per cent of households i n Canada were f a m i l y house-ho l d s . Of the 272,000 dwellings i n M e t r o p o l i t a n Vancouver i n 1966, 63 per cent were owner occupied w h i l e 37 per cent were tenant occupied. Informa-t i o n c l a s s i f y i n g households by age of head i n Greater Vancouver was not a v a i l a b l e ; only data f o r f a m i l i e s c l a s s i f i e d by age could be found. Table IV below shows the number of f a m i l i e s by age of head i n M e t r o p o l i t a n Van-couver . TABLE IV FAMILY HOUSEHOLDS BY AGE OF HEAD FOR METROPOLITAN VANCOUVER 1966 Age of Head Number of F a m i l i e s Percent of T o t a l Less than 55 150,396 71% 55 - 64 31,663 15 65 - 69 10,031 5 70 and over 19,711 9 T o t a l 211,801 100 Source: D.B.S. Census - 29 -From t h i s t a b l e i s i s evident that there were a t o t a l of 61,405 e l d e r l y f a m i l i e s i n 1966-- i . e . 29 per cent of the t o t a l number of f a m i l i e s i n the area. Table V shows the d i s t r i b u t i o n of e l d e r l y f a m i l i e s by m u n i c i p a l i t i e s of Greater Vancouver i n 1966. This t a b l e shows the high p r o p o r t i o n of e l d e r l y f a m i l i e s l i v i n g i n White Rock (58 per cent) followed by Delta (42 per cent) and Vancouver c i t y (33 per c e n t ) . The other m u n i c i p a l i t i e s a l l had proportions equal to or below the m e t r o p o l i t a n average of 29 per cent. 4. Income and Expenditure C h a r a c t e r i s t i c s of the Population Table A - I I I i n the Appendix shows the percentage d i s t r i b u t i o n of f a m i l i e s and unattached i n d i v i d u a l s by income groups f o r Canada i n 1965. I t i s apparent that both average and median incomes f o r those age groups over f i f t y - f i v e years are below those f o r a l l age groups. The average i n -come of $6,221 f o r f a m i l i e s i n the 55 to 64 (pre-retirement) age group i s , however, not much lower than the average f o r a l l groups of $6,526. On the other hand, the average income of'the group 65 and over of $4,259, i s con-s i d e r a b l y lower than the n a t i o n a l average--in f a c t i t i s lower than any other age group. In the case of unattached i n d i v i d u a l s , the average income f o r a l l age groups i s only $2,873 w i t h that of the 55 to 64 age group about the same at $2,877 but w i t h the 65 and over group s i g n i f i c a n t l y lower at $1,722. Income data s p e c i f i c a l l y f o r the Vancouver area were, u n f o r t u n a t e l y , not a v a i l a b l e . However, a rough i n d i c a t i o n of the d i s t r i b u t i o n of wealth i n Vancouver i s given by Figure 1 below which shows the percentage d i s t r i b u t i o n by expenditure group i n 1964. This i n f o r m a t i o n i s taken from a Dominion - 30 -TABLE V " NUMBER OF FAMILIES WITH AGE OF HEAD EXCEEDING FIFTY-FIVE YEARS OF AGE IN CENSUS METROPOLITAN AREAS OF VANCOUVER 1966 . Famil-ies Percent T o t a l F a m i l i e s w i t h head over 55 years of T o t a l M e t r o p o l i t a n Vancouver 217,329 61,405 29% Vancouver c i t y 99,429 33,340 33 U n i v e r s i t y End. Lands 760 209 27 Burnaby 28,338 6,732 24 West Vancouver 8,241 2,414 29 North Vane, c i t y 6,954 1.817 26 North Vane. munc. 11,806 1,913 6 Richmond 12,170 2,255 16 New Westminster 9,093 1,458 16 Coquitlam 8,873 1,385 15 Unorganized 169 53 32 Port Moody 1,698 253 15 Port Coquitlam 2,626 479 18 Fraser M i l l s 42 8 19 Surrey 19,801 5,097 26 White Rock 2,166 1,265 58 Del t a 4,930 2,049 42 Indian Reserves 233 68 29 Source: D.B.S. Census. - 31 -F I G U R E 1 PERCENTAGE DISTRIBUTION OF FAMILIES AND INDIVIDUALS BY EXPENDITURE GROUP, VANCOUVER 1964 S O U R C E : . D . B . S . U R B A N F A M I L Y E X P E N D I T U R E , 1 9 6 4 . - 32 -Bureau of S t a t i s t i c s study i n which eleven c i t i e s were sampled--Vancouver 2 being one of the eleven. Drawing f u r t h e r from t h i s study, we can examine the expenditure patterns of d i f f e r e n t age groups. Although these data are from a sampling of eleven c i t i e s , we have no reason to b e l i e v e that Vancouver's patterns should d i f f e r s i g n i f i c a n t l y from that of other c i t i e s . F igure A - l i n the Appendix i n d i c a t e s the percentage d i s t r i b u t i o n of a l l f a m i l i e s and i n d i v i d u a l s by age of head c l a s s i f i e d by s i z e of t o t a l expenditure. This graphic p r e s e n t a t i o n r e v e a l s the s h i f t from a r a t h e r even d i s t r i b u t i o n of expenditure i n the 55 to 59 year age group to a d i s t r i -b u t i o n skewed p r o g r e s s i v e l y to the l e f t f o r each successive age group. This po i n t i s a l s o brought out i n Table VI i n which i t can be seen that the highest t o t a l expenditure i s i n the 45 to 54 age group and becomes l e s s w i t h each successive age group. TABLE VI TOTAL EXPENDITURE BY AGE OF HEAD: ALL FAMILIES AND INDIVIDUALS, ELEVEN CITIES 1964 (Amounts i n $1,000's) Under 25 35 45 55 60 65 70 75 A l l 25 to to to to to to to and Classes Years 34 44 54 59 64 69 74 Over T o t a l Expenditure 6.4 4.6 6.6 7.4 7.7 6.7 5.8 4.2 4.2 3.1 Expenditure on S h e l t e r 1.1 0.8 1.1 1.2 1.2 1.0 0.9 0.8 0.8 0.9 % of t o t a l 16.8% 16.6 17.4'"' 16.3 15.3 15.5 16.1 19.7 19.2 27.8 Source: D.B.S. Urban Family Expenditure 1964. - 33 -This t a b l e a l s o r e v e a l s that age groups 65 and up, spend a greater percentage of t h e i r t o t a l expenditure on s h e l t e r than any other age group. Table A-IV i n the Appendix compares expenditure c h a r a c t e r i s t i c s f o r s p e c i f i c items f o r d i f f e r e n t f a m i l y s i z e s w i t h age of head over f i f t y - f i v e y e ars. This i s a l s o shown i n Figure 2 below. I t i s i n t e r e s t i n g to note the r e l a t i v e l y l a r g e percentage of t o t a l expenditure on s h e l t e r of s i n g l e -u n i t spenders as opposed to other f a m i l y types i . e . 25.7 per cent as com-pared to 17.9 per cent f o r f a m i l i e s of two or more. The percentage d i s t r i b u t i o n of d i f f e r e n t age groups by tenure from the same sample i s given i n Table V I I below. TABLE V I I PERCENTAGE DISTRIBUTION BY TENURE AND AGE GROUP •ELEVEN CITIES 1964 55-59 years 60-64 years 65-69 years 70-74 years 75 years and over Percent Owning 61 56 52 51 50 Percent Renting 39 44 48 49 50 T o t a l 100 100 100 100 100 Source: D.B.S. Urban Family Expenditure 1964. The percent owning t h e i r d w e l l i n g f o r a l l age groups i s 45--thus show a tendency f o r the e l d e r l y to own t h e i r s h e l t e r i n t h i s sample. We w i l l now consider the supply s i d e of the market. - 34 -F I G U R E 2 A V E R A G E A N N U A L E X P E N D I T U R E S F O R A L L F A M I L I E S AND INDIVIDUALS WITH H E A D O V E R 55 Y E A R S O F A G E B Y T Y P E S O F E X P E N D I T U R E : E L E V E N CIT IES 1964 S A M P L E S I Z E : 6 3 1 P E R C E N T A G E O F T O T A L E X P E N D I T U R E M E D I C A L C A R E S O U R C E : D . B . S . U R B A N F A M IL Y E X P E N D I T U R E S , 1964 - 3 5 -B . SUPPLY ASPECTS OF THE MARKET In c o n s i d e r i n g the supply s i t u a t i o n i n the housing market, we are concerned p r i m a r i l y w i t h that type of s h e l t e r against which our proposed v i l l a g e accommodation w i l l be competing. We are, thus, i n t e r e s t e d i n a l l e x i s t i n g housing, and expected changes i n i t , that w i l l appeal to the middl and upper income e l d e r l y . This would i n c l u d e many of the e x i s t i n g stock of s i n g l e f a m i l y d w e l l i n g s , medium to upper rent h i g h - r i s e apartment u n i t s , and most new s i n g l e f a m i l y d w e llings p r e s e n t l y being added to the housing stock each year. The general supply s i t u a t i o n w i l l , however, a l s o be examined as i t does i n d i r e c t l y a f f e c t the type of s h e l t e r i n which we are i n t e r e s t e d . 1. The Housing Stock The t y p i c a l s i n g l e f a m i l y home (three bedrooms) before 1950 was q u i t s m a l l , about 1,000 square f e e t . This t y p i c a l s i z e has increased to between 3 1,200 and 1,300 square f e e t . Table V I I I shows the number of occupied dwellings i n M e t r o p o l i t a n Vancouver i n 1966 by s t r u c t u r a l types and tenure. This t o t a l of 272,000 dwellings i s expected to increase to 312,000 by 1971. I t i s i n t e r e s t i n g to note the great increase i n number of apartment u n i t s b u i l t compared to other types of d w e l l i n g between 1961 and 1966. This i s accompanied by an increase i n the pr o p o r t i o n of r e s i d e n t s r e n t i n g as opposed to owning--in 1961, 70 per cent of occupied u n i t s were owned, i n 1966 t h i s had changed to 63 per cent owning. Table IX shows the changes i n the p r o p o r t i o n of d i f f e r e n t s t r u c t u r e - 36 -TABLE V I I I OCCUPIED DWELLINGS BY STRUCTURAL TYPE AND TENURE METROPOLITAN VANCOUVER 1961 AND 1966 Percent Type 1961 1966 Change T o t a l dwellings 228,596 271,956 + 19 Sin g l e detached 171,620 182,575 + 6 Si n g l e attached 8,843 8,800 - 1 Apartment 47,630 79,802 + 68 Mobile 503 779 + 5 Owned 159,414 171,395 + 7 Rented 69,182 100,561 + 45 Source: D.B.S. Census TABLE IX STRUCTURE TYPE AS A PERCENTAGE OF TOTAL HOUSING STOCK METROPOLITAN VANCOUVER 1951, 1961, 1966 AND ESTIMATED FOR 1971 Percent S t r u c t u r e Type 1951 1961 1966 Estimated 1971 S i n g l e detached 74.6 75.2 67.3 69.0 S i n g l e attached 4.2 3.8 3.3 3.6 Apartments 24.2 20.8 29.1 27.2 Other - 0.2 0.3 0.2 T o t a l 100.0 100.0 100.0 100.0 Source: D.B.S. and Urban Renewal Study. - 37 -types i n the t o t a l housing stock f o r s e l e c t e d years w i t h a p r o j e c t i o n f o r 1971. I t can be seen that the r e l a t i v e increase i n p r o p o r t i o n of apartment a d d i t i o n s to the housing stock from 1961 to 1966 i s expected to be followed by a swing to s i n g l e f a m i l y housing u n i t s i n the years 1966 to 1971. The s t a r t of t h i s change i n emphasis i s evidenced i n Figure 3 which gives the number of completions of s i n g l e and m u l t i p l e u n i t s from 1958 through 1967. The number of a d d i t i o n s to the housing stock i n the d i f f e r e n t muni-c i p a l i t i e s i s shown i n Table A-V i n the Appendix. In 1967, Vancouver c i t y had the l a r g e s t number of apartment u n i t s added to i t s stock w i t h about 3,000 u n i t s . D e l t a w i t h 980 u n i t s had the l a r g e s t number of s i n g l e f a m ily d w ellings completed i n that year followed by Surrey w i t h 700 u n i t s . The t o t a l e x i s t i n g housing stock i n the d i f f e r e n t m u n i c i p a l i t i e s i n 1966 i s shown i n Table A-VI i n the Appendix. In December 1967, M e t r o p o l i t a n Vancouver's stock of s e l f - c o n t a i n e d r e n t a l accommodation was estimated to be about 81,000 u n i t s and i n 1968 t h i s f i g u r e was thought to be about 92,000 u n i t s . Average vacancy rates i n June 1968 were 1.3 per cent, s l i g h t l y higher than the 1.0 per cent average recorded 4 twelve months e a r l i e r . Table A-VII i n the Appendix shows the d i s t r i b u t i o n of apartments by area and type i n M e t r o p o l i t a n Vancouver. 2. S h e l t e r Costs C o n s t r u c t i o n costs of s i n g l e f a m i l y dwellings have been s t e a d i l y r i s i n g over the past few years w i t h a p a r t i c u l a r l y l a rge increase i n 1967. Table X gives an i n d i c a t i o n of c o n s t r u c t i o n cost changes i n Greater Vancouver since 1958. Over t h i s period the s i t u a t i o n has been aggravated f o r the con-sumer by the large increments i n the cost of vacant land. - 38 -F I G U R E 3 NEW R E S I D E N T I A L C O N S T R U C T I O N C O M P L E T I O N S M E T R O P O L I T A N V A N C O U V E R 1958 T O 1967 13000 - -12000 10000 - -C O M P L E T I O N S 1 h 1958 19S9 I I 1964 196S S O U R C E 1960 1961 1962 1963 D . B . S . N E W R E S I D E N T I A L C O N S T R U C T I O N 1966 1967 L E G E N D : T O T A L C O M P L E T I O N S A P A R T M E N T S A N D R O W H O U S I N G S I N G L E D E T A C H E D A N D S E M I D E T A C H E D - 39 -TABLE X CONSTRUCTION COSTS METROPOLITAN VANCOUVER 1958 TO 1968 *Cost Index Cost per Square Foot f o r Standard Bungalow Index (1963=100) Annual Change 1,200 Sq.Ft. 1,400 Sq.Ft. 1958 102.4 10.72 10.54 1959 105.4 +2.9 10.92 .10.70 1960 103.8 -1.5 10.94 10.74 1961 97.6 -6.0 10.36 10.08 1962 100.2 +2.7 10.47 10.16 1963 100.0 -0.2 10.45 10.16 1964 104.3 +4.3 10.60 10.25 1965 107.3 +3.9 10.90 10.60 1966 113.2 +5.5 11.67 11.45 1967 116.8 +3.2 12.49 12.25 **1968 128.1 +9.7 13.55 13.28 *A weighted index f o r r e s i d e n t i a l c o n s t r u c t i o n which allows f o r both m a t e r i a l s and labour. **Cost of a 1,300 square foot bungalow i n 1968 estimated at $13.29 per sq. f t . Source: Concosts S e r v i c e s . - 40 -In the r e n t a l market, we have a breakdown of rents f o r various types of apartments i n d i f f e r e n t areas shown i n Table X I . The rents shown are f o r an apartment on the t h i r d f l o o r of an apartment b u i l d i n g b u i l t a f t e r 1960, of average s i z e and q u a l i t y and wi t h no s p e c i a l premium f o r o r i e n -t a t i o n or view. Parking i n the open i s assumed. Because these rents r e f e r to s u i t e s of "average s i z e and q u a l i t y " f o r a given area, i t i s d i f f i c u l t to compare rents i n d i f f e r e n t areas. A higher grade of accommodation i s covered, f o r example, i n K e r r i s d a l e than i n Marpole. Property tax i s another component of housing costs that has been r i s i n g s t e a d i l y over the years v a r y i n g s i g n i f i c a n t l y between d i f f e r e n t m u n i c i p a l i t i e s . A $20,000 house i n 1968 would cost an owner between $445 ( i n Delta) and $567 ( i n Port Coquitlam) per year."* C. SUMMARY OF DEMAND AND SUPPLY ASPECTS OF THE MARKET What conclusions may now be drawn from a l l the information j u s t presented—what are the prospects f o r our proposed v i l l a g e ? The development might be p e r f e c t l y designed, financed, e t c . but i f the demand f o r i t s f a c i -l i t i e s i s weak or non-ex i s t e n t , i t w i l l f a i l . I t i s evident from the data that the e l d e r l y , when defined to be persons 55 years of age and over, c o n s t i t u t e a large p r o p o r t i o n of the popu-l a t i o n i n both Canada and M e t r o p o l i t a n Vancouver. This p r o p o r t i o n i s expected to be maintained and even increased s l i g h t l y over the next decade or so. While t h i s growth i n e l d e r l y p o p u l a t i o n does not by i t s e l f help p r e d i c t demand, i t i s , n e v e r t h e l e s s , r e l e v a n t i n that i t does give an i n d i c a t i o n that present demand w i l l probably be maintained and p o s s i b l y increased w i t h the i n c r e a s i n g number of e l d e r l y — a l l other things remaining equal. - 41 -TABLE XI APARTMENT RENTS IN METROPOLITAN VANCOUVER AUGUST 1968 Approximate Monthly Rents Bachelor Vancouver West End South Granville-Oak K i t s i l a n o K e r r i s d a l e Marpole East Hastings Main S t r e e t Burnaby New Westminster North Vancouver West Vancouver Richmond Surrey White Rock D e l t a Coquitlam Port Coquitlam Port Moody -frame • h i g h - r i s e -frame - h i g h - r i s e -frame - h i g h - r i s e -frame - h i g h - r i s e -frame - h i g h - r i s e 95 105 95 105 95 105 95 107 95 90 90 105 95 100 100 105 100 90 One-Bedroom $ 110 125 120 135 115 130 130 145 115 105 105 125 115 125 130 130 125 115 125 130 115 110 115 Two-Bedroom $ 145 180 165 175 155 175 180 200 155 145 145 150 150 155 170 180 165 145 150 165 145 135 140 Source: Real E s t a t e Trends i n M e t r o p o l i t a n Vancouver 1968. - 42 -Although Greater Vancouver does not have the l a r g e s t number of e l d e r l y , i t does have more e l d e r l y per 1,000 (about 190 persons) than any other m e t r o p o l i t a n area i n Canada w i t h the exception of V i c t o r i a which has about 240 e l d e r l y per 1,000 t o t a l p o p u l a t i o n . In M e t r o p o l i t a n Vancouver i t i s expected that the bulk of t o t a l p o p u l a t i o n growth w i l l take place i n the o u t l y i n g areas w i t h very slow increases i n the o l d e r c e n t r a l d i s t r i c t s of the m e t r o p o l i t a n r e g i o n . I t would be wrong to conclude from t h i s that the greatest increase i n e l d e r l y p o p u l a t i o n w i l l be i n these o u t l y i n g areas. Changes i n the age composition of the p o p u l a t i o n i n d i f f e r e n t areas could take place independently of changes i n t o t a l p o p u l a t i o n of d i f f e r e n t areas. The s h i f t i n p r o p o r t i o n of e l d e r l y l i v i n g i n the d i f f e r e n t m u n i c i p a l i t i e s between 1961 and 1966 was very s l i g h t as i s shown i n Table A-VIII i n the Appendix. The greatest change was a drop i n the r e l a t i v e p r o p o r t i o n of e l d e r l y i n Vancouver c i t y from 60.1 per cent of t o t a l e l d e r l y p o p u l a t i o n i n 1961 to 57.9 per cent i n 1966. I t i s i n t e r e s t i n g to note the l a r g e p r o p o r t i o n of the population i n White Rock f a l l i n g under our c l a s s i f i c a t i o n of e l d e r l y . Does t h i s mean that demand f o r retirement housing i s n e c e s s a r i l y strongest i n t h i s area? I t would seem that White Rock does have a t t r i b u t e s appealing to the e l d e r l y . However, the merits or d i s m e r i t s of White Rock as an i d e a l l o c a t i o n f o r our v i l l a g e need not concern us here as t h i s aspect w i l l be considered i n more depth i n a l a t e r chapter. In Greater Vancouver, as w e l l as i n the n a t i o n as a whole, i t appears that the t y p i c a l person f i f t y - f i v e years of age or over i s most l i k e l y to be married w i t h widowed people forming the next most populous group. What s i g n i f i c a n c e does t h i s p o i n t have as f a r as we're concerned? When considered - 43 -together w i t h the f a c t that the great m a j o r i t y of e l d e r l y households are f a m i l y households, i t would appear that t h i s i s the segment of the population from which we can expect to s o l i c i t the greatest demand. The s i n g l e f a m i l y cottages i n our v i l l a g e are most l i k e l y to appeal to t h i s group. The apartment u n i t s would probably appeal more to the widowed and s i n g l e segment of the e l d e r l y p o p u l a t i o n . I t i s these people who c u r r e n t l y account f o r the number of non-family households. The r e l a t i v e l y l a r ge p r o p o r t i o n of widowed females i s an aspect of the prospective demand to be borne i n mind when c o n s i d e r i n g questions of design and l o c a t i o n of the v i l l a g e . With regard to e l d e r l y households, there are three p o s s i b l e sources of household formation. These are: 1. Net f a m i l y formation 2. Net "undoubling" ( r e d u c t i o n i n the numbers of f a m i l i e s l i v i n g i n shared accommodation) 3. Net non-family household formation Expected r a t e s of household formation i n M e t r o p o l i t a n Vancouver are not a v a i l a b l e but by u s i n g f o r e c a s t s of the Economic C o u n c i l of Canada f o r the n a t i o n , we can estimate roughly the expected r a t e of household increase f o r the next few y e a r s . This i s a c r i t i c a l f i g u r e because i t i s t h i s human a c t i v i t y that l a r g e l y determines demand f o r housing. Ignoring e l d e r l y households f o r the moment, i f we assume that the total.number of households i n Greater Vancouver continues to c o n s t i t u t e 5.2 per cent of t o t a l households i n Canada (a conservative estimate i n view of the f a c t that t o t a l p o p u l a t i o n i n Vancouver i s expected to grow at a f a s t e r r a t e than the n a t i o n a l average), we can expect the number of households to increase from approximately 272,000 i n 1966 to 352,000 i n 1976—an annual - 44 -average increase of 8,000 households per year. Disregarding the tendency fo r some new households to "double up", there should be approximately 8,000 households seeking s h e l t e r each year f o r the next ten ye a r s . Lack of data prevent us t r y i n g to estimate how many of these 8,000 w i l l comprise e l d e r l y households. We do know that i n 1966, 27 per cent of f a m i l i e s i n M e t r o p o l i t a n Vancouver were e l d e r l y and a l s o that 93 per cent of new house-holds are expected to be f a m i l y households—we can now make the f o l l o w i n g c a l c u l a t i o n ; Forecasted annual average increase i n households 8,000 Family households 93% of 8,000 = 7,440 Non-family households 560 T o t a l 8,000 E l d e r l y f a m i l y households 27% of 7,440 = 2,000 E l d e r l y non-family households 19% of 560 = 106 T o t a l increase i n e l d e r l y households per year 2,106 Now, how i s the c o n s t r u c t i o n i n d u s t r y expected to meet t h i s demand due to household formation? T o t a l new dwellings are expected to increase by about 8,000 u n i t s per year which would seem c o n s i s t e n t w i t h our rough estimate of housing demand. This f i g u r e , however, does not take i n t o account demolitions of e x i s t i n g d w e l l i n g s . Examination of income data i n d i c a t e that the e l d e r l y do not enjoy p a r t i c u l a r l y high incomes i n Canada. Those people 65 years and over, i n p a r t i c u l a r , r e c e i v e incomes considerably below the average. The 55 to 64 age group i s , however, b e t t e r o f f r e c e i v i n g incomes about equal to the n a t i o n a l average. Oh these grounds, i t would seem that the p u b l i c pre-occupation w i t h l o w - r e n t a l housing f o r the e l d e r l y i s j u s t i f i a b l e . The expenditure data i n d i c a t e an i n t e r e s t i n g c h a r a c t e r i s t i c of the - 45 -e l d e r l y i . e . they appear to spend a greater percentage of t h e i r t o t a l expenditure on s h e l t e r than any of the younger age groups. Another i n t e r e s t i n g feature i s the i n d i c a t i o n that people over f i f t y -f i v e years of age tend to be more i n c l i n e d to owning t h e i r d w e l l i n g u n i t s than r e n t i n g . This tendency, however, seems to drop o f f w i t h each succes-s i v e age group above 55 years. I f vacancy r a t e s can be construed as an i n d i c a t o r of imbalances i n supply and demand, the vacancy r a t e i n 1968 i n Greater Vancouver would suggest an u n s a t i s f i e d demand f o r apartment u n i t s . In c o n c l u s i o n then, t h i s market a n a l y s i s does not i n any way solve the problem of measuring any imbalances between supply and demand. I t does, however, give us a more c l e a r understanding of the composition of the mar-k e t . We now have a b e t t e r idea of the number of e l d e r l y and c h a r a c t e r i s t i c s of t h i s group necessary f o r making d e c i s i o n s regarding many aspects of our proposed community development. This a n a l y s i s has given us no cause to doubt the p o s s i b l e drawing power of our v i l l a g e . - 46 -Footnotes ''"Wolfgang M. I I l i n g ; P o p u l a t i o n , Family, Household, and Labour Force  Growth to 1980, S t a f f Study #19, Economic C o u n c i l of Canada, Ottawa, 1967. 2 Dominion Bureau of S t a t i s t i c s ; Urban Family Expenditure 1964, Occasional Paper, Queen's P r i n t e r , Ottawa, 1968. 3 Vancouver Real E s t a t e Board; Real E s t a t e Trends i n M e t r o p o l i t a n  Vancouver, 1968, Vancouver, 1968. 4 I b i d . 5 I b i d . Wolfgang M. T i l i n g ; 0p_. C i t . CHAPTER IV LOCATION ANALYSIS A. FACTORS DETERMINING CHOICE OF LOCATION  1. The Task In t r y i n g to s e l e c t a s u i t a b l e l o c a t i o n f o r our retirement v i l l a g e i t w i l l be necessary to examine the needs and preferences of the e l d e r l y as r e f l e c t e d i n t h e i r b e h a v i o r a l patterns and i n a t t i t u d e s t u d i e s . This w i l l enable us to develop c e r t a i n c r i t e r i a to be used i n the s e l e c t i o n of both the neighbourhood as w e l l as the p a r t i c u l a r s i t e f o r the development. Our task i s complicated by the f a c t that no s i n g l e set of c r i t e r i a w i l l be a p p l i c a b l e to a l l aged persons. The e l d e r l y phase of the human l i f e c y c l e t y p i c a l l y extends over a period of twenty to t h i r t y years during which time the needs and preferences of a person w i l l change p o s s i b l y more r a p i d l y than any other p e r i o d i n h i s l i f e . There are d i f f e r e n t sub-categories of e l d e r l y households w i t h d i f f e r e n t l i f e s t y l e s each of which i s unique i n many r e s p e c t s . Tasks f o r v a r i ous l i v i n g arrangements, the need f o r companionship, the need f o r community s e r v i c e s , e t c . , are d i f f e r e n t i n type and degree f o r d i f f e r e n t e l d e r l y households and are not n e c e s s a r i l y r e l a t e d to c h a r a c t e r i s -t i c s of the household such as income, age, e t c . I t has been found, however, that the e l d e r l y do possess c e r t a i n common c h a r a c t e r i s t i c s which set them apart from other age groups. Slowing down p h y s i c a l l y coupled w i t h a f i x e d income means that distances to d e s i r e d objects - 48 -becomes f a r more s i g n i f i c a n t . The departure of c h i l d r e n from the household makes the p r o x i m i t y of c h i l d o r i e n t a t e d f a c i l i t i e s unimportant. Place of work and places of a c t i v e amusement are f a r l e s s s i g n i f i c a n t to the e l d e r l y . These, and other c h a r a c t e r i s t i c s can be p o s i t i v e l y i d e n t i f i e d as being unique to the e l d e r l y as a group. We w i l l now examine some of these charac-t e r i s t i c s of the aged as they would a f f e c t our choice of l o c a t i o n . 2. Contact w i t h R e l a t i v e s and Friends Many e l d e r l y households are faced w i t h the problem of maintaining s o c i a l contact w i t h the outside w o r l d — i . e . a problem of l o n l i n e s s . This can be a t t r i b u t e d to a number of f a c t o r s . F i r s t l y , the empty-nest phase of the fa m i l y l i f e c y c l e i s a phenomenon experienced by most o l d e r couples when t h e i r c h i l d r e n marry and leave home to set up t h e i r own f a m i l y u n i t indepen-dent of t h e i r parents. In the past i t was very common f o r the parents to be absorbed i n t o the growing f a m i l y of one of the c h i l d r e n but i n recent years t h i s has been more the exception than the r u l e . This problem i s aggravated by the f a c t that many newly married couples tend to set up home i n f a r d i s t a n t communities. Another f a c t o r c o n t r i b u t i n g to the problem of l o n l i n e s s i s the death of one spouse l e a v i n g a l a r g e companionship gap i n the l i f e of the s u r v i v i n g p a r t n e r . The advent of retirement i s another occurrance which o f t e n means a l o s s i n human co n t a c t . A study by Sebastian De G r a z i a i n the United States i n 1957^ i n d i c a t e d that v i s i t i n g w i t h f r i e n d s and r e l a t i v e s was a r e l a t i v e l y more indulged i n a c t i v i t y f o r the 50 plus age groups than the younger groups. In a s i m i l a r study of l e i s u r e time a c t i v i t i e s conducted by C o r n e l l 2 U n i v e r s i t y i n 1963, showed the three most common a c t i v i t i e s of a sample of - 49 -people aged 65 and over to be watching t e l e v i s i o n , v i s i t i n g and reading., Of the sample of 5,202 e l d e r l y persons, about two t h i r d s were found to have v i s i t e d w i t h someone the previous day. An i n t e r e s t i n g f i n d i n g i n t h i s study was that respondents i n d i c a t e d that t h i s was the a c t i v i t y they enjoyed doing most i n s p i t e of spending more time watching t e l e v i s i o n and r e a d i n g . In i n v e s t i g a t i n g the h a b i t s of the aged w i t h respect to contact w i t h f r i e n d s and r e l a t i v e s , the question a r i s e s whether or not the problem of l o n l i n e s s w i l l be a l l e v i a t e d by l i v i n g quarters s i t u a t e d i n the midst of more densely populated areas. There are some s o c i o l o g i s t s and g e r o n t o l o g i s t s who b e l i e v e very s t r o n g l y that p h y s i c a l i n t e g r a t i o n w i l l a u t o m a t i c a l l y b r i n g about s o c i a l i n t e g r a t i o n . They are convinced that neighbours of d i f f e r e n t ages develop strong s o c i a l r e l a t i o n s and mutual support. They a l s o maintain that such f r i e n d s h i p s maintain "the youthfulness and independence" of the aged.^ This a t t i t u d e advocating balanced communities was shown to be un-r e a l i s t i c i n a study conducted by I r v i n g Rosow i n the Cleveland m e t r o p o l i t a n 4 area i n 1966. This study examined the f r i e n d s h i p h a b i t s of a number of o l d people l i v i n g i n h i g h - r i s e apartments where they c o n s t i t u t e d a m i n o r i t y . I t was found that the e l d e r l y r e s i d e n t s chose t h e i r f r i e n d s from among t h e i r own age group i n s p i t e of l i v i n g i n the midst of a l l age groups. There was very l i t t l e s o c i a l contact between the aged and the younger generations i n the s e ap ar tment s. The r e l a t i v e unimportance of the p r o x i m i t y of younger age groups to the e l d e r l y i s shown i n a study conducted i n 1960 by Robert Wilson where the preferences of the e l d e r l y i n North C a r o l i n a are examined. ~* Asked to rank 12 items i n order of importance " i n making a neighbourhood an i d e a l place to l i v e " , the item considered l e a s t important by the respondents was that - 50 -suggesting the neighbourhood should have a mixture of a l l types of people. These r e v e l a t i o n s do not negate the contention that the pro x i m i t y of r e l a t i v e s i s an important c o n s i d e r a t i o n on the part of ol d e r people i n s e l e c t i n g t h e i r housing arrangements. We have merely i l l u s t r a t e d here that the e l d e r l y do not appear to show any d e s i r e to be surrounded by younger people. They do, however, appear to want to be near people of t h e i r own age group and t h e i r r e l a t i v e s . The question of whether they want to l i v e w i t h t h e i r r e l a t i v e s w i l l be d e a l t w i t h l a t e r . 3. Desire f o r Independence and Pr i v a c y One of the most s a l i e n t f a c t s emerging from st u d i e s of the housing , preferences of o l d e r people, i s the almost u n i v e r s a l d e s i r e f o r continued independence i n l i v i n g arrangements. A p o s s i b l e reason f o r t h i s d e s i r e f o r independence i s given i n a study of o l d age s e c u r i t y r e c i p i e n t s i n Los Angeles County^ i n which i t i s reported t h a t ; "an overwhelming m a j o r i t y of these r e c i p i e n t s l i v i n g w i t h r e l a t i v e s are not p a r t i c u l a r l y happy due to such f a c t o r s as uncongenial r e l a t i v e s , crowded c o n d i t i o n s i n the home, and annoyances of small c h i l d r e n i n the home. There has a l s o been some f e e l i n g by r e c i p i e n t s that they are not wanted, or that they are a burden on t h e i r r e l a t i v e s . " In Beyer's study,^ respondents were asked; "What k i n d of l i v i n g arrangements do you th i n k i s best f o r people over 65?" To o b t a i n the soundest in f o r m a t i o n p o s s i b l e on the degree of independence de s i r e d and on the importance attached to the matter of l o c a t i o n w i t h respect to r e l a t i v e s , a choice of three l i v i n g s i t u a t i o n s were given. The r e s u l t s were as f o l l o w s : - 51 -L i v e by themselves away from r e l a t i v e s L i v e by themselves but near t h e i r r e l a t i v e s L i v e w i t h t h e i r f a m i l i e s 31% 52% 17% A decided preference was shown f o r l i v i n g arrangements i n which r e l a t i v e s were not too c l o s e nor too f a r away. I t i s evident that most o l d e r people s t i l l consider t h e i r home t h e i r c a s t l e i n which they can make t h e i r own d e c i s i o n s and have a great degree of freedom. They p r e f e r l i v i n g s i t u a t i o n s i n which they are able to s e l e c t t h e i r own f r i e n d s and, at the same time, r e g u l a t e the degree of s o c i a l con-t a c t w i t h them. The degree of independence under which an o l d e r person l i v e s i s o f t e n contingent upon the circumstances of the person concerned. For example, i l l h e a l t h might d i c t a t e a higher degree of dependence upon o t h e r s . Wallace g Smith i n h i s study of e l d e r l y housing i n C a l i f o r n i a , demonstrated that e l d e r l y persons w i t h r e l a t i v e l y high incomes l i v e independently of t h e i r c h i l d r e n to a much greater extent than those w i t h low incomes. I t would seem then that one of the more important r e q u i s i t e s of e l d e r l y housing i s one which provides f o r maximum independence and p r i v a c y . This does not mean that the aged are seeking i s o l a t i o n but rather the op p o r t u n i t y to withdraw from outside s o c i a l contact at w i l l and to determine to as great a degree as p o s s i b l e t h e i r d a i l y a c t i v i t i e s . This d e s i r e f o r independence i s not given up u n t i l f r a i l t y or i l l n e s s n e c e s s i t a t e s the s e c u r i t y of s h e l t e r e d care. 4. The Proximity of Community F a c i l i t i e s As w i t h any other adult age group, the e l d e r l y t y p i c a l l y would p r e f e r a housing s i t u a t i o n i n which shopping, t r a n s p o r t a t i o n , s o c i a l , and - 52 -r e c r e a t i o n a l f a c i l i t i e s are c l o s e by. The pr o x i m i t y of neighbourhood f a c i l i t i e s i s , however, p a r t i c u l a r l y c r i t i c a l to the aged who, i n ge n e r a l , tend to lack the m o b i l i t y of younger people. A very necessary requirement f o r the l o c a t i o n of our v i l l a g e would be the ex i s t e n c e of a shopping centre w i t h i n easy walking distance to meet the everyday needs of the v i l l a g e occupants. The shopping f a c i l i t i e s would not have to be too ex t e n s i v e , merely adequate to s a t i s f y the need f o r convenience goods and s e r v i c e s . I t would be expected that s p e c i a l t y goods would be shopped f o r on o c c a s i o n a l shopping expeditions to downtown Van-couver s t o r e s . A very important neighbourhood requirement would be the exi s t e n c e of a p u b l i c t r a n s p o r t a t i o n system enabling easy access to and from the m e t r o p o l i -tan areas. A major highway would be the communication medium l i n k i n g the v i l l a g e w i t h other parts of Greater Vancouver. Without t h i s our v i l l a g e would be i s o l a t e d from the r e s t of the urban community p r o h i b i t i n g easy contact of the e l d e r l y r e s i d e n t s w i t h d e s i r e d people and places i n the Greater Vancouver r e g i o n . In Barker's study of retirement communities i n C a l i f o r n i a , he s t a t e s ; "In v i r t u a l l y every study of the housing preferences of e l d e r l y people, convenient p u b l i c t r a n s p o r t a t i o n was ranked most d e s i r a b l e i n making a 9 neighbourhood a good place to l i v e . " Although people over 55 years of age tend to lack the enthusiasm f o r p a r t i c i p a t i o n i n a c t i v e sports shown by younger people, they do, neverthe-l e s s , g e n e r a l l y have more time f o r engaging i n l e i s u r e a c t i v i t i e s . Much of t h e i r l e i s u r e time might be taken up w i t h organized a c t i v i t i e s w i t h i n the v i l l a g e i t s e l f , but there w i l l be many wanting to seek r e c r e a t i o n outside - 53 -the confines of the v i l l a g e . Many retirement communities i n the United States are s p e c i f i c a l l y l ocated near some r e c r e a t i o n a l f e a t u r e such as bathing beaches, l a k e s , e t c . While i t i s not intended that our v i l l a g e i s to be of the h o l i d a y r e s o r t type, p r o x i m i t y of s o c i a l c l u b s , commercial entertainment and other r e c r e a t i o n a l f a c i l i t i e s , can be considered a very d e s i r a b l e neighbourhood f e a t u r e . Community s e r v i c e s such as p o l i c e and f i r e p r o t e c t i o n as w e l l as medical s e r v i c e s are other neighbourhood f a c i l i t i e s which would add con-s i d e r a b l y to the a t t r a c t i v e n e s s of our v i l l a g e . The a v a i l a b i l i t y of medical s e r v i c e s i s p a r t i c u l a r l y important f o r the w e l l being of the v i l l a g e r e s i -dents. Many retirement communities i n the United S t a t e s , w h i l e not having.. medical f a c i l i t i e s i n the v i l l a g e i t s e l f , do arrange to have a doctor to make d a i l y rounds of most of the r e s i d e n t s . This c o n t r i b u t e s considerably to the peace of mind of both the e l d e r l y r e s i d e n t s and t h e i r r e l a t i v e s l i v i n g elsewhere. 5. Proximity of Places of Work and Employment Opportunities Although our proposed development has been given the t i t l e " r e t i r e -ment v i l l a g e " , t h i s i s i n f a c t a misnomer. Many, i f not most, of the people we hope to a t t r a c t to the v i l l a g e w i l l be i n the 55 to 65 year age b r a c k e t — i n t h e i r pre-retirement y e a r s . Many people t a k i n g up residence i n the v i l l a g e w i l l continue to work w i t h a view to t h e i r pending retirement which might s t i l l be a number of years away. In a d d i t i o n to these people, there w i l l be a number of v i l l a g e r s already r e t i r e d seeking work s u b s t i t u t e s e i t h e r i n the neighbourhood or elsewhere i n M e t r o p o l i t a n Vancouver. A v a i l a b l e employment o p p o r t u n i t i e s need - 54 -not only be f o r g a i n f u l employment—many v i l l a g e r s would probably seek jobs i n s o c i a l w e l f a r e o r g a n i z a t i o n s . Barker found that i n one of the l a r g e s t retirement community develop-ments i n C a l i f o r n i a (18,000 people), a s u r p r i s i n g four f i f t h s of the house-holds had at l e a s t one member g a i n f u l l y employed.^ I t would, t h e r e f o r e , seem that easy access to places of work and work o p p o r t u n i t i e s , would be an e s s e n t i a l requirement of our v i l l a g e . 6. Other L o c a t i o n a l Considerations A number of other f a c t o r s , apart from the c h a r a c t e r i s t i c s of the e l d e r l y , w i l l have to be borne i n mind when choosing a l o c a t i o n . One of these would be the a v a i l a b i l i t y of a s u i t a b l e piece of vacant land i n a chosen area w i t h regard to s i z e , p r i c e , and p h y s i c a l c h a r a c t e r i s -t i c s . These p o i n t s w i l l only be considered when s e l e c t i n g a s p e c i f i c t r a c t of land from a number of t r a c t s which meet the main c r i t e r i a . Another c o n s t r a i n t i n s e l e c t i n g the s i t e w i l l be the a t t i t u d e of the l o c a l governing a u t h o r i t y w i t h regard to t h i s type of development. Some m u n i c i p a l i t i e s might consider a retirement v i l l a g e a very d e s i r a b l e a d d i t i o n to the community, adding considerably to i t s tax base. Others, however, might obj e c t to a large i n f l u x of e l d e r l y who might have a tendency to be very a c t i v e i n c i v i c p o l i t i c s forming a strong v o t i n g b l o c k . In any event, the a t t i t u d e of the l o c a l m u n i c i p a l i t y i s l i k e l y to have a profound a f f e c t upon the development and f u n c t i o n i n g of the v i l l a g e . 7. L o c a t i o n a l C h a r a c t e r i s t i c s of United States Retirement Communities Examination of the l o c a t i o n of d i f f e r e n t planned retirement developments - 55 -i n the s t a t e s of F l o r i d a , A r i z o n a , C a l i f o r n i a , Oregon, and Washington, show the m a j o r i t y of them to be s i t u a t e d i n or near major urban areas. There are a number of v i l l a g e s l ocated "away from i t a l l " and these can be c l a s s i f i e d as r e s o r t retirement communities 12 Barker, i n h i s study of 23 retirement v i l l a g e s i n C a l i f o r n i a , makes a strong case f o r the n e c e s s i t y of a me t r o p o l i t a n s e t t i n g to ensure the f i n a n c i a l success of the development. He po i n t s out that those com-munities l o c a t e d away from m e t r o p o l i t a n areas have not been p a r t i c u l a r l y s u c c e s s f u l and a t t r i b u t e s the success of me t r o p o l i t a n o r i e n t a t e d v i l l a g e s to the f o l l o w i n g l o c a t i o n a l f a c t o r s : (1) I t i s c l o s e r to major demand. Barker found that about 90 per cent of r e s i d e n t s i n these v i l l a g e s came from the adjacent metro area. From t h i s can be concluded that the market was e s s e n t i a l l y m e t r o p o l i t a n , not s t a t e or n a t i o n a l . Demand i s insured because the number of p o s s i b l e households is' being maximised. (2) A l a r g e p r o p o r t i o n of v i l l a g e r s continued to work i n the c i t y f o r some time a f t e r t a k i n g up residence i n the community. (3) Most of the r e s i d e n t s had r e l a t i v e s l i v i n g i n the adjacent urban area w i t h whom they had frequent contact. (4) The urban s e t t i n g s a t i s f i e d the d e s i r e to be near shopping, medical, r e c r e a t i o n a l and other f a c i l i t i e s . (5) F a m i l i a r i t y w i t h the r e g i o n . (6) The i s o l a t i o n of the v i l l a g e insured freedom from the noise of the c i t y . This i s borne out by studies conducted by C o r n e l l U n i v e r s i t y which s t r e s s e s the p a r t i c u l a r discomfort that the - 5 6 -e l d e r l y a s s o c i a t e w i t h the noise of c h i l d r e n p l a y i n g and heavy t r a f f i c . ^ These f i n d i n g s of Barker are supported to a l a r g e extent by the c h e c k - l i s t recommended by the N a t i o n a l C o u n c i l on the Aging to be used i n 14 the s e l e c t i o n of retirement housing. L o c a t i o n a l f a c t o r s are itemized below: ( i ) P h y s i c a l C h a r a c t e r i s t i c s of the Immediate Neighbourhood: Not too crowded Not too noisy Well maintained F a i r l y l e v e l t e r r a i n Free of smoke and a i r p o l l u t i o n No heavy t r a f f i c W e ll paved and l i g h t e d s t r e e t s and sidewalks Adequate sewerage and drainage ( i i ) P r o x i m i t y of B a s i c Community Services E f f e c t i v e l y p o l i c e d F i r e S t a t i o n nearby Post o f f i c e nearby P u b l i c t r a n s p o r t a t i o n nearby ( i i i ) P r o x i m i t y of B a s i c Commercial F a c i l i t i e s and Services Shopping Restaurants Laundry Bank ( i v ) P r o x i m i t y of F a c i l i t i e s , Programs, and Opportunities Place of worship P u b l i c departments of r e c r e a t i o n Commercial entertainment S p e c i a l a c t i v i t y programs Employment o p p o r t u n i t i e s Although experience i n the United States i s not n e c e s s a r i l y a p p l i c a b l e to Canada, there i s no reason to b e l i e v e that d i f f e r e n c e s e x i s t i n the needs and preferences of the e l d e r l y between the two c o u n t r i e s . - 57 -8 . Summary of Considerations Stemming from t h i s examination of various f a c t o r s l i k e l y to i n f l u e n c e the choice of the e l d e r l y i n s e l e c t i n g retirement housing, the f o l l o w i n g c r i t e r i a should be used i n the choice of a s i t e f o r the v i l l a g e development; (1) A s i t e f a c i l i t a t i n g contact between the v i l l a g e r e s i d e n t s and t h e i r f r i e n d s and r e l a t i v e s . (2) A s i t e a l l o w i n g reasonably easy access to places of work and employment o p p o r t u n i t i e s . (3) A s i t e conveniently c l o s e to shopping, medical, r e c r e a t i o n , p u b l i c , and i n s t i t u t i o n a l f a c i l i t i e s . ( 4 ) A s i t e l i k e l y to s a t i s f y the d e s i r e s of the e l d e r l y w i t h regard to independent l i v i n g arrangements, p r i v a c y , and quietness. ( 5 ) A s i t e which i s not p r o h i b i t i v e because of p r i c e , a t t i t u d e of l o c a l m u n i c i p a l i t y or topographical f e a t u r e s . We are now armed w i t h a set of c r i t e r i a w i t h which we can go about s e l e c t i n g a s u i t a b l e l o c a t i o n f o r our community development. B. SELECTING A SUITABLE LOCATION 1. Method We have now decided that a m e t r o p o l i t a n s e t t i n g i s to be an e s s e n t i a l f e a t u r e of our v i l l a g e . This retirement community development i s to be aimed at a market of e l d e r l y people w i t h strong m e t r o p o l i t a n t i e s and who wish to maintain these t i e s . This does not mean that a retirement v i l l a g e i s o l a t e d from the c i t y i n time and distance would n e c e s s a r i l y be a bad choice of - 58 -l o c a t i o n . A v i l l a g e s i t u a t e d away from the urban areas near some r e c r e a -t i o n a l f e a t u r e would be a d i f f e r e n t type of v i l l a g e l i k e l y to appeal to a d i f f e r e n t type of person than a v i l l a g e l ocated near a major urban area. One would expect that an i s o l a t e d v i l l a g e would a t t r a c t t r u l y r e t i r e d people--not those about to r e t i r e . People i n these v i l l a g e s would probably be i n a p o s i t i o n to t r a v e l considerable distances to v i s i t f r i e n d s and r e l a t i v e s when they so wished. The problem now i s to f i n d a s u i t a b l e neighbourhood i n the Greater Vancouver area which w i l l meet the c r i t e r i a e s t a b l i s h e d e a r l i e r . I t must be borne i n mind that a vacant piece of land of at l e a s t f i f t y acres i s re q u i r e d f o r our scheme. On c o n s i d e r i n g the d i f f e r e n t m u n i c i p a l areas i n Vancouver, many of the o l d e r , more c e n t r a l d i s t r i c t s exclude themselves from e l i g i b i l i t y f o r a number of reasons. F i r s t l y , i n Vancouver c i t y , Burnaby and New Westminster a vacant s i t e of s u f f i c i e n t s i z e i s j u s t not a v a i l a b l e without the c l e a r i n g of e x i s t i n g s t r u c t u r e s . Secondly, none of these areas can be considered p a r t i c u l a r l y q u i e t , r e l a x i n g neighbourhoods. The p r i c e of land i n these m u n i c i p a l i t i e s would a l s o be p r o h i b i t i v e . On the other hand, there are a number of f a c t o r s f a v ouring these m u n i c i p a l i t i e s but I th i n k these w i l l be outweighed by the q u a l i t i e s of other, more o u t l y i n g r e g i o n s . I t i s probable that there are a number of f e a s i b l e suburban areas i n Greater Vancouver—the question of which i s most l i k e l y to produce the optimum s o l u t i o n would r e q u i r e an exceedingly d e t a i l e d a n a l y s i s of the c h a r a c t e r i s t i c s of each municipal area which I consider beyond the scope of t h i s study. I in t e n d , r a t h e r , to s e l e c t one area and to show how t h i s area meets the c r i t e r i a which we have s e t . Although t h i s w i l l not n e c e s s a r i l y be the i d e a l l o c a l i t y , we should get a c l e a r i n d i c a t i o n that i s s u i t a b l e and - 59 -l i k e l y to prove s u c c e s s f u l . The m u n i c i p a l i t y I have s e l e c t e d to examine i s White Rock C i t y which has already suggested i t s e l f as a l i k e l y l o c a t i o n i n the previous chapter i n which i t was shown that a p a r t i c u l a r l y large percentage of the p o p u l a t i o n l i v i n g there were over 55 years of a g e — a f a r higher percentage than i n any of the other m u n i c i p a l i t i e s . 15 2. C h a r a c t e r i s t i c s of White Rock C i t y The c i t y of White Rock occupies a small p a r c e l of land (1,268 acres) lo c a t e d at the southern edge of Surrey, 30 miles south-west of Vancouver's c e n t r a l business d i s t r i c t (See Figure 4) on Semiahmoo Bay. U n t i l 1957, i t was part of the m u n i c i p a l i t y of Surrey at which time a p l e b i s c i t e r e s u l t e d i n the formation of a separate corporate e n t i t y . The C i t y ' s growth i n the past has been dependent mainly on r e c r e a -t i o n a l a c t i v i t y a t t r i b u t a b l e to the r e l a t i v e l y m i l d c l i m a t e of the area ( i t s annual r a i n f a l l i s about one t h i r d of that of Vancouver c i t y ) and i t s beach f r o n t . I t s emphasis has broadened, however, from a r e s o r t and retirement community to that of a suburban community. The f u n c t i o n of the C i t y was changed conside r a b l y when, i n 1963, the Deas I s l a n d Freeway was completed making White Rock a t t r a c t i v e to people wanting easy downtown access as w e l l as the b e n e f i t s of a r e s o r t area. As a r e s u l t the C i t y became more suburban i n character w i t h an i n f l u x of commuters employed i n Greater Vancouver. The C i t y i s l i n k e d to Greater Vancouver by both the King George High-way, and the Deas Is l a n d Freeway which continues south to S e a t t l e i n the United S t a t e s . In a d d i t i o n to these highways, the Great Northern Railway passes through White Rock l i n k i n g S e a t t l e and Vancouver. The topography of White Rock i s g e n e r a l l y s l o p i n g down away from the - 60 -beach f r o n t forming a c l i f f over 300 feet i n height which a f f o r d s a splendid view across the Georgia S t r a i t . Land use w i t h i n White Rock i s t y p i c a l of a r e s o r t community subject to suburban expansion. There are no i n d u s t r i a l s i t e s or s t r u c t u r e s w i t h i n the c i t y . Table X I I shows the d i s t r i b u t i o n of land by d i f f e r e n t uses. TABLE X I I DISTRIBUTION OF LAND BY TYPE OF USE WHITE ROCK CITY, OCT. 1965 Present use Acres Used Percent of T o t a l Land S i n g l e f a m i l y r e s i d e n t i a l Two-family r e s i d e n t i a l Apartment r e s i d e n t i a l Commercial P u b l i c and I n s t i t u t i o n a l Vacant Road Allowances 433.8 21.1 11.1 39.1 74.2 333.2 355.5 34.5 1.7 0.9 3.0 5.8 26.2 27.9 T o t a l 1,268.0 100.0 Source: LMRPB, White Rock C i t y Study. In 1966 White Rock had four r e t a i l commercial centres a l l of which could be c l a s s e d as neighbourhood c e n t r e s . Each of these provides a wide range of convenience goods and s e r v i c e s but there i s a r e l a t i v e l y low a v a i l a b i l i t y of s p e c i a l t y goods such as f u r n i t u r e , household a p p l i a n c e s , e t c . Table X I I I below shows the t o t a l number and s i z e of commercial - 61 -TABLE X I I I SIZE AND NUMBER OF COMMERCIAL ESTABLISHMENTS BY NEIGHBOURHOOD CENTRES, WHITE ROCK CITY 1965 Commercial Centre R e t a i l F l o o r Space (Sq.Ft.) Other Commercial Fl o o r Space (Sq.Ft.) T o t a l Commercial F l o o r Space (Sq.Ft.) T o t a l Number of Commercial Establishments H i l l t o p 56,400 P a c i f i c Avenue 26,100 Campbell R i v e r 16,950 Marine Drive 43,800 64,000 9,500 25,850 36,000 110,400 35,600 42,800 79,800 71 33 37 48 Source: LMRPB, White Rock C i t y Study establishments i n each of the four neighbourhood centres i n 1965. H i l l t o p centre can be regarded as the town centre as i t i s c e n t r a l l y located on two major s t r e e t s , i s c u r r e n t l y f u l l y s e r v i c e d and i s the s i t e of the l a r g e s t e x i s t i n g concentration of shops. With regard to r e c r e a t i o n a l f a c i l i t i e s , the C i t y i s r e l a t i v e l y w e l l endowed as a r e s u l t of both p r i v a t e and municipal a c t i v i t y . White Rock's r e c r e a t i o n f u n c t i o n has compelled the C i t y ' s a d m i n i s t r a t i o n to provide many f a c i l i t i e s f o r t o u r i s t s . The C i t y has been r e s p o n s i b l e f o r the development and maintenance of the waterfront and beach areas. In a d d i t i o n , parks have been created throughout the c i t y and a p u b l i c l i b r a r y i s i n e x i s t e n c e . P r i v a t e e n t e r p r i s e has been r e s p o n s i b l e f o r many r e c r e a t i o n a l f a c i l i -t i e s such as two bowling a l l e y s , two t h e a t r e s , two dance h a l l s plus various - 62 -other commercial establishments. In a d d i t i o n to these commercial f a c i l i t i e s there are a number of p r i v a t e s o c i a l f a c i l i t i e s such as two s e r v i c e c l u b s ; the Canadian Legion and the Army, Navy and A i r Force Veterans A s s o c i a t i o n . The White Rock Players Club has been op e r a t i v e i n the C i t y f o r a number of years as w e l l as branches o f the Lions Club and the Kiwanis Club. The older r e s i d e n t s of the c i t y are represented by two or g a n i z a t i o n s - - t h e Old Age Pensioners A s s o c i a t i o n and the Senior C i t i z e n s A s s o c i a t i o n . These two groups appear to p a r t i c i p a t e very s t r o n g l y i n l o c a l p o l i t i c s . A number of r e l i g i o u s bodies are a l s o very a c t i v e i n the community--the B a p t i s t Church operating a home f o r the e l d e r l y . As f a r as medical s e r v i c e s are concerned, the C i t y has a h o s p i t a l w i t h an ambulance s e r v i c e a v a i l a b l e . There are a l s o a number of p r a c t i s i n g d o c t o r s , drug dispensers and a denta l c l i n i c . The C i t y i s f u l l y s e r v i c e d w i t h regard to p o l i c e and f i r e p r o t e c t i o n , water and e l e c t r i c i t y , and sewerage. P u b l i c t r a n s p o r t a t i o n to Greater Van-couver areas i s r e a d i l y a v a i l a b l e . 3. White Rock as a S u i t a b l e Location Now, how does White Rock meet the c r i t e r i a that we have set f o r the l o c a t i o n of a retirement v i l l a g e ? Although White Rock i s s i t u a t e d a r e l a t i v e l y long way from c e n t r a l Vancouver, the presence of the Deas Island Freeway provides r e l a t i v e l y quick and easy access to the metropolitan area. E l d e r l y r e s i d e n t s of our v i l l a g e should have very l i t t l e d i f f i c u l t y i n maintaining c l o s e contact w i t h f r i e n d s and r e l a t i v e s s c a t t e r e d throughout Vancouver. The r e l a t i v e l y large number of e l d e r l y already l i v i n g i n White Rock would suggest the p o s s i b i l i t y of many - 63 -new f r i e n d s being drawn from the immediate v i c i n i t y . L i k e w i s e , the presence of the highway makes d a i l y commuting to and from places of work i n Vancouver p o s s i b l e . White Rock i t s e l f does not appear to have an abundance of l o c a l employment o p p o r t u n i t i e s although the r e l a t i v e l y l a r g e number of s o c i a l o r g a n i z a t i o n s i n the area would probably provide many o p p o r t u n i t i e s f o r unpaid s o c i a l work. The shopping f a c i l i t i e s i n White Rock seem to be adequate f o r meeting the everyday needs of the community. There are a number of vacant s i t e s exceeding 50 acres i n area w i t h i n walking distance of these shopping f a c i l i -t i e s . S p e c i a l shopping expeditions downtown would have to be arranged by r e s i d e n t s of the v i l l a g e i n order to acquire shopping and s p e c i a l t y goods not r e a d i l y a v a i l a b l e i n White Rock. The past retirement and r e s o r t f u n c t i o n of the C i t y has ensured adequate r e c r e a t i o n f a c i l i t i e s and s e r v i c e s . The large number of s o c i a l o r g a n i z a t i o n s should encourage p a r t i c i p a t i o n of the v i l l a g e r s i n the a f f a i r s of the community. The e x i s t i n g p u b l i c t r a n s p o r t a t i o n system would f a c i l i t a t e the m o b i l i t y of those not possessing automobiles. Other p u b l i c s e r v i c e s such as p o l i c e and f i r e p r o t e c t i o n and h o s p i t a l f a c i l i t i e s seem adequate. The r e l a t i v e l y l a r ge number of e l d e r l y l i v i n g i n White Rock should provide a neighbourhood atmosphere to the l i k i n g of our prospective v i l l a g e d w e l l e r s . There shouldn't be anything to invade t h e i r p r i v a c y nor prevent t h e i r l i v i n g a l i f e of r e l a t i v e independence. Ease of access to Greater Vancouver areas should obviate any f e e l i n g s of a l i e n a t i o n from people and places w i t h i n Vancouver w i t h which they have grown f a m i l i a r over the y e a r s . The a c t i v e p a r t i c i p a t i o n of the e l d e r l y i n l o c a l a f f a i r s i n White Rock has r e s u l t e d i n a c i t y c o u n c i l sympathetic to the needs and cause of the e l d e r l y . Any a p p l i c a t i o n to c i t y c o u n c i l f o r the development of a - 64 -retirement v i l l a g e w i l l probably be recei v e d favourably. The p r i c e of vacant land i n White Rock should not prove p r o h i b i t i v e . Although the r e l a t i v e l y small area of White Rock reduces the number of f e a s i b l e s i t e s a v a i l a b l e , there are a number of vacant pieces of land which would be s u i t a b l e f o r our use. In summary, then, White Rock i s a community w i t h f a c i l i t i e s and c h a r a c t e r i s t i c s that can be considered conducive to the success of our proposed retirement v i l l a g e . No obvious f a c t o r presents i t s e l f which would cast any doubt on the adequacy of t h i s l o c a t i o n . As stat e d b e f o r e , there are p o s s i b l y b e t t e r l o c a l i t i e s i n M e t r o p o l i t a n Vancouver but one would be hard pressed to prove t h i s i n l i g h t of present knowledge about the h a b i t s and the needs of the e l d e r l y . White Rock meets the r e a d i l y d i s c e r n a b l e requirements of the e l d e r l y . - 64a -FIGURE 4 REGIONAL SETTING OF WHITE ROCK CITY - 64b -FIGURE 5 WHITE ROCK CITY - 65 -Footnotes ^"Sebastian De G r a z i a ; "The Uses of Time", i n Aging and L e i s u r e ; e d i t e d by Robert W. Kleemeier, Oxford U n i v e r s i t y Press,. New York, 1961. 2 Glenn H. Beyer and Margaret E. Woods; L i v i n g and A c t i v i t y Patterns  of the Aged, C o r n e l l U n i v e r s i t y , I t h a c a , New York, 1963. 3 I r v i n g Rosow; S o c i a l I n t e g r a t i o n of the Aged, The Free Press, New York, 1967. 4 I b i d . ^Robert L. Wilson; Urban L i v i n g Q u a l i t i e s from Vantage Point of the  E l d e r l y , U n i v e r s i t y of North C a r o l i n a , 1960. Bureau of P u b l i c A s s i s t a n c e ; Housing Conditions Among Re c i p i e n t s of  Old Age S e c u r i t y L i v i n g i n L.A. County, Unpublished r e p o r t , 1950. ^Glenn H. Beyer and Margaret E. Woods; 0p_. C i t . Wallace Smith; Housing f o r the E l d e r l y i n C a l i f o r n i a , Center f o r Real E s t a t e and Urban Economics, U n i v e r s i t y of C a l i f o r n i a , Berkeley, 1961'. 9 Michael B. Barker; C a l i f o r n i a Retirement Communities, Center f o r Real E s t a t e and Urban Economics, U n i v e r s i t y of C a l i f o r n i a , Berkeley, 1966. l b i d . 11 N a t i o n a l C o u n c i l on the Aging; A N a t i o n a l D i r e c t o r y on Housing f o r  Older People; New York, 1965. 12 Michael B. Barker; 0p_. C i t . 13 M a r i l y n Langford; Community Aspects of Housing the Aged, Center f o r Housing and Environmental S t u d i e s , C o r n e l l U n i v e r s i t y , I t h a c a , New York, 1962, 14 N a t i o n a l C o u n c i l on the Aging; 0p_. C i t . ^ Lower Mainland Regional Planning Board; White Rock C i t y Study, M u n i c i p a l Planning S e r v i c e , Vancouver, J u l y , 1966. and D. M. Grimmer; The Expansion of Urban Fringe Communities, Unpublished master's t h e s i s , U n i v e r s i t y of B r i t i s h Columbia, Vancouver, 1965. CHAPTER V CHARACTERISTICS OF PROPOSED VILLAGE A. SOME PRIMARY CONSIDERATIONS I t i s not the i n t e n t i o n of t h i s study to e s t a b l i s h the optimum s i z e of v i l l a g e or to consider the merits and demerits of various designs w i t h d i f f e r e n t f a c i l i t i e s . Instead, we are concerned w i t h the f e a s i b i l i t y of a v i l l a g e , the c h a r a c t e r i s t i c s of which are gi v e n . We are now faced w i t h the problem of designing a v i l l a g e which can then be used f o r our a n a l y s i s . Although the p h y s i c a l layout of the proposed v i l l a g e i s not p a r t i c u -l a r l y important to t h i s study, i t i s important that the features incorpora-ted i n the proposal package of p h y s i c a l and non-physical f a c i l i t i e s be r e a l i s t i c and w i t h some foundation. For t h i s reason, considerable use has been made of data gathered by Barker on the c h a r a c t e r i s t i c s of retirement communities i n California.''" Table XIV shows the percentage of C a l i f o r n i a retirement communities possessing s e l e c t e d p h y s i c a l and non-physical f e a t u r e s . This t a b l e has been compiled from data r e c e i v e d from 18 r e t i r e -ment community developers i n C a l i f o r n i a . The d e c i s i o n as to which f a c i l i t i e s should be included i n our v i l l a g e would depend to a large extent on the number of poeple the v i l l a g e i s designed to accommodate. C e r t a i n f a c i l i t i e s would not be j u s t i f i e d by the number of v i l l a g e r e s i d e n t s and they would have to r e l y on the outside community f o r those needs. Now, how many people do we expect to be r e s i d e n t i n our v i l l a g e ? - 67 -PERCENTAGE OF CALIFORNIA RETIREMENT COMMUNITIES POSSESSING SELECTED PHYSICAL AND NON-PHYSICAL FEATURES TABLE XIV P h y s i c a l Feature Percent Checking Card Rooms 94 Community A d m i n i s t r a t i o n Centre 94 Party Rooms 94 S h u f f l e Board 94 Dance H a l l 88 Horse Shoe P i t s 88 Swimming Pool 88 Golf Course 82 B i l l i a r d Room 71 Class Rooms 71 Garden P l o t s 71 L i b r a r y 71 P a i n t i n g Studio 71 Sewing Room 71 Bowling Green 65 Ceramic Shop 65 Wood Shop 59 Lapidary 53 Shopping Centre 53 Dark Room 35 Community Post O f f i c e 29 Sauna Baths 29 P h y s i c a l Therapy F a c i l i t i e s 29 C l i n i c on Premises 29 B i c y c l i n g Paths 24 R i d i n g Stables 18 V o l l e y B a l l Courts 18 Tennis Courts 12 A Few Shops Included 6 H o s p i t a l on Premises 6 Non-Physical Features Maintenance of Landscaping Included 82 Organized S o c i a l Program 76 F u l l - t i m e A d m i n i s t r a t i v e S t a f f 71 Intra-Community T r a n s p o r t a t i o n System 59 P u b l i c T r a n s p o r t a t i o n to S i t e 29 Resident Doctor 18 Health Insurance Included 12 Guarded Gate at Main Entrance 6 Source: Michael B. Barker; C a l i f o r n i a Retirement Communities. - 68 -A f i g u r e of 260 housing u n i t s has been set f o r the i n i t i a l development of our v i l l a g e . D.B.S. f i g u r e s f o r 1961, show that the average s i z e of 2 household w i t h head over f i f t y - f i v e years of age to be 2.8. On the other hand, Barker shows that the average s i z e of household of one v i l l a g e w i t h 3 18,000 r e s i d e n t s to be 1.8. These two f i g u r e s can serve only as a rough guide i n h e l p i n g us estimate the number of i n h a b i t a n t s expected i n our v i l l a g e . The l a t t e r f i g u r e of 1.8 i s probably more a p p l i c a b l e i n our case because i t i s more r e p r e s e n t a t i v e of the type of people expected and the type of accommodation to be provided i n our v i l l a g e . Using t h i s f i g u r e , the estimated p o p u l a t i o n of our v i l l a g e at any one time w i l l be about 470 persons. I t would probably be more r e a l i s t i c to expect a po p u l a t i o n any-where from 400 to 600 persons. This number of people would not j u s t i f y the i n c l u s i o n of c e r t a i n f a c i l i t i e s common to many of the l a r g e r communities i n the United S t a t e s . These include g o l f courses, shopping c e n t r e s , churches, medical c l i n i c s , etc.--these f a c i l i t i e s are a l l a v a i l a b l e i n the immediate neighbourhood. We w i l l now go on to describe our proposed v i l l a g e . B. DESCRIPTION OF PROPOSED VILLAGE  1. Housing Units Table XV below shows the d i f f e r e n t types of housing u n i t s to be i n c o r -porated i n the v i l l a g e . As mentioned b e f o r e , t h i s study i s not concerned w i t h f i n d i n g the optimum design of v i l l a g e — w e are t r y i n g here to describe a v i l l a g e which can be considered reasonable i n design. The s e l e c t i o n of d w e l l i n g types as shown here i s j u s t i f i e d f o r a number of reasons. - 69 -TABLE XV HOUSING UNITS TO BE INCORPORATED IN PROPOSED VILLAGE Number of L i v e a b l e Percent of Type of Unit Units Area T o t a l (Sq.Ft.) U n i t s S i n g l e Family Detached Houses Type A (two bedrooms) Type B (two bedrooms) Type C (two bedrooms) T o t a l Fourplexes 15 blocks each w i t h four one bedroom u n i t s Walk-Up Apartments Type A (one bedroom) Type B (two bedroom) T o t a l T o t a l Dwelling Units 60 1,145 60 1,181 40 1,623 160 62 60 980 23 30 850 10 950 40 15 260 100 F i r s t l y , i t would seem l o g i c a l to present prospective r e s i d e n t s w i t h as broad a choice of l i v i n g arrangements as p o s s i b l e . By p r o v i d i n g t h i s c h o i c e , the v i l l a g e w i l l appeal to a l a r g e r market. Secondly, each of these s i x types can be used to measure the demand f o r that type. This would help determine which type of u n i t s to b u i l d i n any f u t u r e a d d i t i o n s to the v i l -l a g e. - 70 -2. P h y s i c a l F a c i l i t i e s The p h y s i c a l f a c i l i t i e s to be included i n the v i l l a g e are itemized i n Table XVI below. With a few exceptions, these are the same types of f a c i l i t i e s found by Barker to be c h a r a c t e r i s t i c of most of the 18 communi-t i e s sampled i n C a l i f o r n i a . When comparing Table XVI w i t h XIV, i t can be seen that a l l of these items (with the exception of the p u t t i n g green) are to be found i n at l e a s t 65 per cent of the communities sampled. In s h o r t , our proposed v i l l a g e can be considered f a i r l y t y p i c a l w i t h regard to p h y s i -c a l f a c i l i t i e s . TABLE XVI PHYSICAL FACILITIES TO BE INCORPORATED IN PROPOSED VILLAGE Item Number D e s c r i p t i o n Community Centre B u i l d i n g 1 T o t a l area of b u i l d i n g to be 6,000 square f e e t . A d m i n i s t r a t i o n O f f i c e s Card and Club Rooms Dance Room and Auditorium Games Room Change Rooms L i b r a r y 2 4 1 1 2 1 B i l l i a r d t a b l e s , s h u f f l e board, e t c . Swimming Pool 1 Outdoor, adjacent to community centre b u i l d i n g Bowling Green P u t t i n g Green Garden P l o t s Parking Areas 1 1 Open Areas and Gardens These areas are to be set aside f o r fu t u r e a d d i t i o n s to the v i l l a g e . They are to be landscaped and traversed w i t h footpaths f o r the b e n e f i t of re s i d e n t s - 71 -3. Non-Physical F a c i l i t i e s The r e l a t i v e l y few items i n t h i s category are shown i n Table XVII below. Once again, these items can be considered t y p i c a l of retirement communities i n C a l i f o r n i a (see Table XIV). Other items such as an i n t r a -community t r a n s p o r t a t i o n system and a r e s i d e n t doctor would not be j u s t i f i e d i n a community of t h i s s i z e . TABLE XVII NON-PHYSICAL FACILITIES TO BE INCORPORATED IN PROPOSED VILLAGE Item D e s c r i p t i o n Maintenance of Landscaping This w i l l not include the s i n g l e f a m i l y detached housing l o t s . Organized S o c i a l Program F u l l - t i m e a d m i n i s t r a t i v e This w i l l c o n s i s t of two people s t a f f . i n i t i a l l y . 4. P h y s i c a l Layout of V i l l a g e Table X V I I I shows the land-use breakdown of the proposed v i l l a g e . The 160 detached housing l o t s are to be 50 f e e t x 100 feet i n s i z e w i t h the roads and sidewalks 30 feet wide. The f i f t e e n f o u r p l e x blocks are to cover 4,000 square f e e t each, w i t h the apartment b u i l d i n g covering 20,000 square f e e t and the community centre b u i l d i n g 6,000 square f e e t . The r e -mainder of the area w i l l be taken up i n parking space, the c e n t r a l - 72 -TABLE XVIII LAND-USE BREAKDOWN OF PROPOSED VILLAGE Percent Approximate Areas of U s e T o t a l Square Feet Acres Area Single-Family Detached Fourplexes Apartments Roads and Sidewalks Recreation Area Park ing Open Space f o r Future Development 800,000 60,000 20,000 144,000 65,000 20,000 452,000 18.4 1.4 0.5 3.3 1.5 0.5 10.4 50.8 3.9 1.3 9.7 4.1 1.3 28.9 T o t a l 1,580,000 36.0 100.0 r e c r e a t i o n a l area, and landscaped open areas. In c o n c l u s i o n then, we now have the e s s e n t i a l s of a retirement v i l l a g e whose f e a s i b i l i t y may now be t e s t e d . While no retirement v i l l a g e can be considered r e a l l y t y p i c a l , t h i s proposed design does incorporate features common to many other v i l l a g e s . Perhaps i t would prove more pro-f i t a b l e to exclude some features and include o t h e r s - - t h i s we don't know. We are t r y i n g to determine the f e a s i b i l i t y of a v i l l a g e the features of which have been borrowed from other v i l l a g e s and which, f o r our purposes, are g i v e n . - 73 -Footnotes Michael B. Barker; California Retirement Communities, University of California, Berkeley, 1966. 2 Dominion Bureau of Statistics: Selected Statistics on the Older  Population of Canada 1961, Ottawa, 1964. Michael B. Barker, 0p_. Cit. CHAPTER VI COST-BENEFIT ANALYSIS OF VILLAGE In t h i s chapter we w i l l attempt to estimate the p r o f i t a b i l i t y of the p r o j e c t . In order to do t h i s , estimates w i l l f i r s t be made of the i n i t i a l c a p i t a l o u t l a y . This w i l l i n v o l v e the cost of the land, the development c o s t s , and the costs of f i n a n c i n g . Where p o s s i b l e , these costs w i l l be based on l o c a l market inform a t i o n gathered from a v a r i e t y of sources. A f t e r e s t a b l i s h i n g the expected c a p i t a l o u t l a y , we w i l l estimate annual o p e r a t i n g expenses and revenues f o r the v i l l a g e . From these estimates of expenses and revenues, pro-forma cash flow statements w i l l be prepared f o r each of the f i r s t ten operating years of the v i l l a g e . This w i l l e n t a i l assumptions being made regarding f i n a n c i n g terms. F i n a l l y , the y i e l d on equity w i l l be c a l c u l a t e d f o r a number of p o s s i b l e s i t u a t i o n s . For our purposes, the y i e l d on equity w i l l be that i n t e r e s t r a t e which equates the i n i t i a l e q u i t y o u t l a y w i t h the present value of the annual income stream plus the present value of the cash r e v e r s i o n at time of r e s a l e . This a n a l y s i s w i l l be done from the eq u i t y i n v e s t o r ' s point of view and, t h e r e f o r e , the r e t u r n on the t o t a l investment w i l l not be considered. I t i s my i n t e n t i o n to formulate a range of eq u i t y y i e l d s under d i f f e r e n t assumptions regarding the cost of f i n a n c i n g , the h o l d i n g p e r i o d , and the r e v e r s i o n v a l u e . In order to make the a n a l y s i s e a s i e r to f o l l o w , many of the a r i t h m e t i c c a l c u l a t i o n s have been assigned to the Appendix to which frequent reference - 75 -i s made. A. BASIC ASSUMPTIONS UNDERLYING THE ANALYSIS 1. T o t a l c o n s t r u c t i o n time w i l l be 9 months, a f t e r which the v i l l a g e w i l l be f u l l y o p e r a t i o n a l . 2. The 160 s i n g l e detached houses w i l l be s o l d immediately upon completion w h i l e the remaining d w e l l i n g u n i t s w i l l be r e t a i n e d and rented out. 3. T o t a l equity c a p i t a l a v a i l a b l e i s $200,000. 4. The m u n i c i p a l i t y w i l l be r e s p o n s i b l e f o r p r o v i d i n g the s e r v i c e s to the l o t s . These w i l l i n c l u d e roads, sidewalks, sewers, stormwater d r a i n s , e t c . The cost of p r o v i d i n g these s e r v i c e s w i l l be recovered by the m u n i c i p a l i t y by means of a l o c a l improvement tax on the v i l l a g e home-owners. The cost w i l l be amortized over 20 years at 1\ per:cent i n t e r e s t . 5. The s i t e i s r e l a t i v e l y f l a t and re q u i r e s l i t t l e c l e a r i n g . 6. The c a p i t a l cost of the r e c r e a t i o n a l f a c i l i t i e s (which includes a l l improvements other than the d w e l l i n g u n i t s ) , w i l l be r e q u i r e d to be recaptured w i t h i n four y e a r s . Part of t h i s cost w i l l be recovered almost immediately upon s a l e of the 160 detached houses. The remaining cost w i l l be recovered from r e n t a l revenues. 7. Use of the r e c r e a t i o n a l f a c i l i t i e s w i l l be r e s t r i c t e d to people who become members of the " c l u b " . I t would, I t h i n k , be reasonable to expect that most people occupying the detached houses as w e l l as most of the tenants would take up membership. The annual membership fee would cover the operating expenses of the r e c r e a t i o n a l f a c i l i t i e s of the v i l l a g e . - 76 -8. The detached houses w i l l c o n s i s t of v a r i a t i o n s of ten b a s i c a r c h i t e c t designed houses. The walk-up apartments, fourplexes and community centre w i l l a l s o be a r c h i t e c t designed. 9. A company w i l l be formed to develop and operate the v i l l a g e . 10. Operating net income before debt s e r v i c e , taxes and recapture i s assumed to be constant over the income p r o j e c t i o n p e r i o d . Increases i n o p e rating expenses w i l l be o f f s e t by increases i n revenue. B. CAPITAL COST OF PROJECT This s e c t i o n w i l l deal w i t h the three t y p i c a l cost components of most property developments i . e . land, development and other costs such as i n t e r i m f i n a n c i n g , p r o f e s s i o n a l f e e s , e t c . Table XIX below, shows the estimate of t o t a l c a p i t a l cost of the p r o j e c t . See Note 1 i n the Appendix f o r d e t a i l s of t h e s e . c o s t s . C. FINANCING NEEDS As w i t h most l a r g e property developments, there are a number of p o s s i b l e ways of f i n a n c i n g a p r o j e c t . These would include f u l l e q u ity c a p i t a l , the use of lease agreements, secured and unsecured debt, and combinations of these. Indeed, many retirement v i l l a g e s i n the United States use a wide v a r i e t y of means, some of which are p a r t i c u l a r l y t a i l o r e d to the nature of a retirement v i l l a g e . An i n t e r e s t i n g example of t h i s i s the requirement i n some v i l l a g e s that tenants pay a lump sum amount i n ad-vance f o r the use of t h e i r d w e l l i n g - u n i t > f o r the remainder of t h e i r l i v e s . Should the tenant l i v e longer than h i s expected l i f e , he w i l l , i n f a c t , be - 77 -TABLE XIX ESTIMATED CAPITAL COST OF VILLAGE Item Number LAND 1. Detached housing l o t s (18.4 acres) 73,600 2. Remaining land (17.6 acres) 70,400 DEVELOPMENT COSTS Hous in g : 3. Detached houses (160 u n i t s ) 2,863,000 4. Fourplexes (60 u n i t s ) 767,000 5. Apartments (40 u n i t s ) 400,000 R e c r e a t i o n a l F a c i l i t i e s : 6. Community Centre B u i l d i n g 90,000 7. F u r n i t u r e f o r d i t t o 3,000 8. B i l l i a r d t a b l e s , s h u f f l e board, e t c . 3,000 9. L i b r a r y equipment 3,000 10. Swimming pool 8,000 11. Bowling green 3,000 12. P u t t i n g green 1,000 13. Landscaping 42,000 14. Footpaths 2,000 15. Garden Equipment 3,000 16. Parking areas 10,000 OTHER COSTS 17. In t e r i m Financing 187,000 18. P r o f e s s i o n a l Fees and Insurance 61,000 19. Property Taxes (9 months) 7,000 20. Promotion Costs 8,000 144,000 4,030,000 168,000 263,000 TOTAL CAPITAL COST 4,605,000 Say $4,600,000 - 78 -l i v i n g those e x t r a years rent f r e e . This arrangement s u i t s many older people who do not have a r e g u l a r income but might have a large sum of money from the s a l e of t h e i r previous r e s i d e n c e . Many of these techniques used by retirement v i l l a g e operators appear to be both f i n a n c i n g and marketing d e v i c e s . While i t would be u s e f u l i n t h i s study to compare these d i f f e r e n t methods of f i n a n c i n g and to determine the optimum method, t h i s would r e q u i r e considerable d e t a i l and i s p o s s i b l y more s u i t e d to a study s p e c i f i c a l l y d e a l i n g w i t h the f i n a n c i n g of retirement v i l l a g e s . Instead, one method has been s e l e c t e d f o r a n a l y s i s and has been already defined by a number of assumptions p r e v i o u s l y s t a t e d . To r e i t e r a t e , the r e l e v a n t assumptions are: 1. The land i s to be bought and developed by the i n v e s t o r and u l t i m a t e v i l l a g e operator. 2. $200,000 Equity c a p i t a l i s a v a i l a b l e . 3. The s i n g l e detached houses are to be s o l d upon completion. 4. The remaining d w e l l i n g u n i t s are to be rented out. We w i l l be d e a l i n g here w i t h two d i s t i n c t types of f i n a n c i n g - - s h o r t -term or i n t e r i m f i n a n c i n g and long-term f i n a n c i n g . A f t e r the s t a r t i n g - u p p e r i o d of 9 months, the short-term debt c a p i t a l w i l l be refunded w i t h long-term debt once the detached houses are s o l d and the v i l l a g e i s o p e r a t i o n a l . 1. Short-Term Needs From our c a l c u l a t i o n s summarized i n Table XIX, we expect to r e q u i r e an i n i t i a l c a p i t a l o u t l a y of $4,600,000. Equity c a p i t a l amounts to $200,000 l e a v i n g a t o t a l of $4,400,000 to be r a i s e d . I t has been assumed that a f i r s t mortgage w i l l be obtainable at 9% - 79 -per cent i n t e r e s t f o r 75 per cent of the cost of land plus improvements. The remaining c a p i t a l requirement w i l l be r a i s e d through what I have termed a second mortgage at 12 per cent i n t e r e s t . This need not be a mortgage per se but could be any form of insecured debt or even e q u i t y r a i s e d through f l o a t i n g a share i s s u e . Whatever means i s employed, I have assumed that t h i s w i l l cost 12 per cent'' and w i l l be refundable a f t e r 9 months. In short then, our short-term c a p i t a l requirements w i l l be as f o l l o w s : E q u ity C a p i t a l 200,000. F i r s t Mortgage @ 9%% 3,200,000. (75% of $4,270,000.) Second Mortgage @ 12% 1,200,000. T o t a l C a p i t a l Requirement $4,600,000. 2. Long-Term Needs In order to determine our long-term requirements, we must f i r s t estimate the expected revenue from the s a l e of the s i n g l e detached houses. This has been done on a cost plus bas.is r a t h e r than u s i n g a u n i t p r i c e d e r i v e d from sales of comparable houses i n the area. The expected revenue from the s a l e of these u n i t s i s given below. See Note 2 i n the Appendix f o r the c a l c u l a t i o n s of these expected revenues. Gross Revenue from Sale of S i n g l e $3,440,000. Detached Houses (160 u n i t s @ $21,500. Less Realtors Fee (about 2%%) 90,000. Estimated Revenue from Sale of Houses $3,350,000. - 80 -I t should be noted here that the c a p i t a l cost of the r e c r e a t i o n f a c i l i t i e s amount to $186,000. (see Note 3 i n Appendix f o r d e t a i l s ) . I t i s intended that t h i s c a p i t a l o u t l a y be recovered w i t h i n four y e a r s . These costs have been charged on a u n i t b a s i s to the detached houses, four-plexes and apartments. Part of t h i s c a p i t a l cost w i l l be recovered immedia-t e l y upon s a l e of the detached houses w h i l e the remaining cost w i l l be recaptured from r e n t a l revenue over four y e a r s . We are now able to estimate our long-term f i n a n c i n g needs: Repayment of short-term debt: F i r s t Mortgage 3,200,000 Second Mortgage 1,200,000 4,400,000 Less Revenue from Sale of houses 3,350,000 Long-term debt c a p i t a l r e q u i r e d $1,050,000 How does t h i s compare w i t h the value of the e n t e r p r i s e — w i l l i t be p o s s i b l e to r a i s e a f i r s t mortgage f o r t h i s amount? The value of the v i l l a g e based on the cost of land plus improvements (which now excludes the cost of the s i n g l e detached houses) i s about $1,400,000. The r e q u i r e d debt c a p i t a l of $1,050,000 would c o n s t i t u t e 75 per cent of t h i s v a l u e . This amount should be a v a i l a b l e on a f i r s t mortgage without having the r e s o r t to any other type of debt instrument. I t must be remembered that from the i n v e s t o r ' s p o i n t of view, the f i r s t mortgage of $1,050,000 would c o n s t i t u t e a f a r greater value of the property than 75 per cent. The cost of the v i l l a g e to the i n v e s t o r i s $4.6 m i l l i o n minus revenue rec e i v e d from the s a l e of the h o u s e s — t h i s amounts to $1,250,000. The mortgage loan i s t h e r e f o r e (^^o'oOO x 1 0 ° ) 8 4 P e r cent of the cost of the property w h i l e the i n v e s t o r ' s e q u i t y of $200,000 i s - 81 -16 per cent of the c o s t . This a n a l y s i s i s concerned w i t h the p r o f i t a b i l i t y of the v i l l a g e from the i n i t i a l i n v e s t o r ' s p o i n t of view. Later on, when we consider changes i n the value of the property over time, we w i l l be t a l k i n g about t h i s cost to the i n v e s t o r of $1,250,000 ra t h e r than the market v a l u e . Having determined the c a p i t a l requirements f o r the development, we w i l l now go on to consider operating revenues and expenses. D. OPERATING EXPENSES AND REVENUES The pro-forma operating statement (Table XXI below) comprises two sources of revenue i e . r e n t a l income and income from membership f e e s . The expected r e n t a l income has been c a l c u l a t e d u s i n g , as a b a s i s , 2 r e n t a l f i g u r e s f o r White Rock f o r 1968. Table XX below shows the t o t a l expected revenue from r e n t a l r e c e i p t s . The rent f i g u r e s used i n t h i s t a b l e must be considered conservative as they do not i n c l u d e any premium a t t r i -b utable to the unique nature of the v i l l a g e . TABLE XX ESTIMATED ANNUAL RENTAL INCOME Type of Uni t Monthly Number Annual Rent of Units Revenue Fourplexes (1 bedroom) $135. 60 97,200. Apartments: Type A (1 bedroom) $130. 30 46,800. Type B (2 bedroom) $155. 10 18,600. Gross Rental Income $162,600. - 82 -TABLE XXI PRO-FORMA ANNUAL OPERATING STATEMENT REVENUES $ Gross Rental Income 162,600. Less Vacancy Allowance (4%) . 6,600. 156,000. Income from Membership Fees (Note 4 i n Appendix) 48,000. Gross Annual Income 204,000. EXPENSES Percent of Gross Rental Income 2. Fourplexes and Apartments: Management (included i n 2 below) J a n i t o r 3.0 E l e c t r i c i t y 1.9 Heat 3.9 C a b l e v i s i o n 1.4 Supplies and Sundries 0.3 Insurance .6 Property Taxes and Water 12.0 Garbage 0.5 Maintenance, Repairs and Replacements 4.9 T o t a l 28.5 Operation of Community Centre B u i l d i n g , F a c i l i t i e s and Grounds Maintenance (Note 4 i n Appendix). 4,800. 3,100. 6,300. 2,300. 500. 1,000. 19,300. 800. 7,900. $46,000. 48,000. 94,000. NET ANNUAL INCOME BEFORE TAXES, DEBT SERVICE AND RECAPTURE $110,000. - 83 -Another source of operating revenue w i l l be from membership f e e s . I t has been assumed that the o p e r a t i o n of the r e c r e a t i o n f a c i l i t i e s w i l l be s e l f - s u p p o r t i n g and that o p erating expenses w i l l be o f f s e t by a fee charged to the users of the f a c i l i t i e s . See Note 4 i n the Appendix f o r c a l c u l a t i o n s of expected operating expenses and revenues f o r the r e c r e a t i o n f a c i l i t i e s . I t i s a n t i c i p a t e d that v i l l a g e r e s i d e n t s w ishing to use the f a c i l i t i e s w i l l be r e q u i r e d to pay $96. per annum i n f e e s . This assumes a membership of 500 people. Should l e s s than t h i s number j o i n the " c l u b " , a higher annual fee would have to be charged to o f f s e t the operating ex-penses . Operating expenses f o r the fourplexes and apartments have been c a l -3 culated u s i n g percentages quoted i n Real E s t a t e Trends f o r frame apartments. Adjustments to these percentages have been made to take i n t o account d i f -ferences l i k e l y to be encountered i n the o p e r a t i o n of the fourplexes which do not have as h i g h a percentage of u n l i v e a b l e f l o o r area as do the apart-ments . A vacancy allowance of about 4 per cent has been used. According to a survey conducted i n June 1968 by the C e n t r a l Mortgage and Housing Cor p o r a t i o n , vacancy r a t e s f o r apartment b u i l d i n g s i n the southern muni-4 c i p a l i t i e s average 2.4 per cent. E. CASH FLOW PROJECTIONS Cash flow p r o j e c t i o n s w i l l now be prepared f o r the f i r s t ten operating years of the v i l l a g e . This must be done i n order to c a l c u l a t e the r a t e of r e t u r n of the p r o j e c t as w e l l as to ensure that the e n t e r p r i s e generates s u f f i c i e n t cash each year to meet annual mortgage payments. Three d i f f e r e n t - 84 -mortgage i n t e r e s t r a t e s have been considered i . e . 8.00 per cent, 8.50 per cent and 9.00 per cent. The mortgage p r i n c i p a l i s $1,050,000 and i s to be amortized over 25 years w i t h equal annual i n s t a l l m e n t s . From the pro-forma operating statement (Table X X I ) , we know that cash flow before income taxes, debt repayment, and recapture w i l l be $110,000 per annum and w i l l remain constant each year. From Table XXII below we see that f o r income tax purposes there w i l l be a net lo s s each year and, hence, no taxes w i l l be payable. The net cash flow before mortgage payments i s , t h e r e f o r e , the annual operating income of $110,000. In t h i s t a b l e i t has been necessary to only c a l c u l a t e ; the i n t e r e s t deduction f o r the 8.00 per cent mortgage. The mortgages at 8.50 per cent and 9.00 per cent would only r e s u l t i n a greater net lo s s f o r ta'x purposes. TABLE XXII DEDUCTIONS FROM OPERATING INCOME FOR INCOME TAX PURPOSES C a p i t a l Cost I n t e r e s t Payable. T o t a l Deductions Allowance^ on Mortgage 8% From Operating Income Year ($l,000's) ($l,000's) " ($l,000*s) 1 130 83 213, 2 117 82 199 3 105 81 186 4 95 80 175 5 85 78 163 6 77 77 154 7 69 75 144 8 62 73 135 9 56 71 127 10 50 69 119 The v i l l a g e b u i l d i n g s are to be of wood frame c o n s t r u c t i o n . Under the Canadian Tax Act , the cost of t h i s type of b u i l d i n g may be charged o f f against income at the r a t e of 10 per cent per annum on a d e c l i n i n g balance. The cost of the b u i l d i n g s i s about $1,300,000. - 85 -Table X X I I I gives the net cash flow to eq u i t y f o r each of the three mortgage i n t e r e s t r a t e s . W i t h i n the range of 8.00 per cent to 9.00 per cent, we see that the cash flow from the p r o j e c t w i l l always be s u f f i c i e n t to i meet mortgage payments. At i n t e r e s t r a t e approximately 9.25 per cent, mortgage payments would equal the net cash flow from operations of $110,000 r e s u l t i n g i n zero cash flow to e q u i t y . TABLE X X I I I NET.CASH FLOW TO EQUITY FOR FIRST TEN YEARS OF OPERATION AT DIFFERENT MORTGAGE1 INTEREST RATES Cash Flow before mortgage payment Mortgage Payments CASH FLOW TO EQUITY 1Mortgage: $1,050,000 25 years i n t e r e s t compounded semi-annually. Mortgage I n t e r e s t Rate 8.00% 8.50% 9.00% 110,000 110,000 110,000 97,756 101,976 106,264 12,244 8,024 3,736 a m o r t i z a t i o n , equal annual payments, F. RATE OF RETURN In the c a p i t a l s t r u c t u r e of our v i l l a g e we have both debt and equity (or r i s k ) c a p i t a l . The i n t e r e s t r a t e or y i e l d on the debt c a p i t a l i s s p e c i -f i c a l l y s t i p u l a t e d i n the mortgage c o n t r a c t . The y i e l d on equity c a p i t a l , however, i s unknown at t h i s stage. The equity y i e l d w i l l be determined by - 86 -the magnitude of p e r i o d i c income and the proceeds of s a l e a f t e r a c e r t a i n h o l d i n g p e r i o d . Any contentions as to the s i z e of these two sources of income can only be s p e c u l a t i v e at t h i s stage. The y i e l d on equity cannot be c a l c u l a t e d u n t i l a f t e r the v i l l a g e has been developed, operated over a span of time, and then s o l d . The y i e l d on equity investment w i l l be the product of three condi-t ions: 1. Net cash flow income to equity a f t e r mortgage payments. 2. Time i n t e r v a l from date of i n i t i a l investment to date of r e v e r s i o n . 3. Amount of cash r e v e r s i o n to e q u i t y . The a c t u a l y i e l d on equity w i l l be that i n t e r e s t r a t e which equals the i n i t i a l e q u i t y o u t l a y w i t h the present values of the net cash flow to equ i t y plus the cash r e v e r s i o n to e q u i t y . We can now determine the prospects of a c e r t a i n e q u i t y y i e l d under d i f f e r e n t assumptions of the above three c o n d i t i o n s . We have already prepared estimates of the net cash flow to equity a f t e r mortgage payments f o r three d i f f e r e n t mortgage (Interest r a t e s ( i . e . 8.00 per cent, 8.50 per cent, and 9.00 per c e n t ) . What remains to be done now i s to c a l c u l a t e the expected equity y i e l d s f o r d i f f e r e n t h o l d i n g periods and d i f f e r e n t r e v e r s i o n v a l u e s . Holding periods of f i v e and ten years have been assumed w i t h r e v e r s i o n values of +25 per cent, no change, and -25 per cent of i n i t i a l c a p i t a l c o s t . (remembering that the i n i t i a l c a p i t a l cost i s taken to be the t o t a l c a p i t a l cost minus the revenue from (sale of houses--t h i s amounts to $1,250,000). These c a l c u l a t i o n s w i l l r e s u l t i n a s e r i e s of 18 d i f f e r e n t e q u i t y y i e l d s f o r three mortgage r a t e s , two h o l d i n g p e r i o d s , and three r e v e r s i o n v a l u e s . A l l three mortgages have the same terms of 25 years, amortized w i t h - 87 -equal annual payments, and w i t h i n t e r e s t compounded semi-annually. Tables XXIV and XXV summarise these c a l c u l a t i o n s , the d e t a i l s of which are contained i n Note 5 of the Appendix. I t i s apparent from t h i s t a b l e that the cost of mortgage c a p i t a l has a s i g n i f i c a n t e f f e c t on the expected y i e l d . The strongest e f f e c t , however, appears to be i n the r e v e r s i o n v a l u e . I t i s i n t e r e s t i n g to note that a 25 per cent decrease i n value would y i e l d almost no r e t u r n under any of the assumptions of mortgage i n t e r e s t r a t e and h o l d i n g p e r i o d . This bears out the f r u i t l e s s n e s s of attempting to measure the p r o f i t a b i l i t y of a p r o j e c t without c o n s i d e r i n g the e n t i r e investment experience from development to eventual s a l e . U n f o r t u n a t e l y , t h i s t a b l e does not enable one to compare the equity y i e l d s f o r d i f f e r e n t h o l d i n g periods f o r an annual r a t e of value change. The same value change has been assumed f o r both the f i v e and ten year h o l d i n g p e r i o d s . When there i s no value change over time however, the h o l d i n g period becomes i n s i g n i f i c a n t as f a r as y i e l d on equity i s concerned. In order to i n v e s t i g a t e f u r t h e r the e f f e c t of r e v e r s i o n value on e q u i t y y i e l d s , three sets of equity y i e l d curves have been derived from Table XXVI below and are shown i n Figures 6, 7 and 8. This a n a l y t i c a l tech-nique has been borrowed from the work of L. W. Ellwood.^ These curves i l l u s t r a t e g r a p h i c a l l y the equity y i e l d to be expected under d i f f e r e n t assumptions of a p p r e c i a t i o n and d e p r e c i a t i o n i n property value at d i f f e r e n t p o ints i n time. Three d i f f e r e n t sets of curves are neces-sary f o r each of the three assumed mortgage i n t e r e s t r a t e s . The formulae used f o r these r e s u l t s are given i n Note 6 of the Appendix. The curves are drawn by p l o t t i n g the points from Table XXVI on the TABLE XXIV SUMMARY OF EQUITY YIELD CALCULATIONS (Amounts i n $1,000's) T o t a l Reversion Cash Reversion Mortgage Inter e s t Rate Holding Period Before S e l l i n g Annual Net Cash Flow A i Annual Mortgage Payments] B Annual Cash Flow to Equity A-B Mortgage Outstanding at Time of Sale D ( S e l l i n g P r i c e ) Value Change +25% . 0 -25% E l E2 ' E 3 to Equity Value Change +25% 0 -25% Ej-D E 2-D E3-D Y i e l d on Equity Value Change +25% 0 -25% 8.00% 5 years 10 years 110.0 97.8 12.2 957.4 845.0 1562.5 1250.0 937.5 595.1 282.6 -29.9 717.5 405.0 92.5 29.0 13.0 - 2 17.0 12.0 1.0 8.50% 5 years 10 years 110.0 102.0 8.0 973.6 857.5 1562.5 1250.0 937.5 588.9 276.4 -36.1 705.0 392.5 80.0 27.0 10.0 16.0 10.0 9.00% 5 years 10 years 110.0 106.3 3.7 978.0 866.1 1562.5 1250.0 937.5 584.5 272.0 -40.5 696.4 383.9 71.4 25.0 8.0 14.0 8.0 See Note i n Appendix f o r d e t a i l s . Y i e l d n e g l i g i b l e or negative. - 89 -TABLE XXV EXPECTED EQUITY YIELDS FOR DIFFERENT MORTGAGE INTEREST RATES, HOLDING PERIODS AND REVERSION VALUES Equity Y i e l d Reversion Value 0 Mortgage I n t e r e s t Rate Holding Period % +25% 8.00 29.0 5 years 8.50 27.0 9.00 25.0 8.00 17.0 10 years 8.50 16.0 9.00 14.0 TABLE XXVI REQUIRED CHANGES IN REVERSION VALUE FOR •25% 13.0 10.0 8.0 12.0 10.0 8.0 1.0 AND MORTGAGE INTEREST RATES Mortgage Equity Required Value Change I n t e r e s t Y i e l d In 5 Years In 10 Yeai Rate % % % 4.00 - 8.5 - 20.8 8.00 - 4.9 - 12.3 8.00% 12.00 - 0.8 - 0.4 16.00 + 4.1 + 16.6 - 20.00 + 9.8 + 40.8 4.00 - 6.3 - 15.6 8.00 - 2.5 - 6.2 8.50% 12.00 + 2.0 + 7.0 16.00 + 7.0 + 25.6 20.00 + 13.4 + 51.0 4.00 - 3.3 - 10.7 8.00 b.o. - 5.8 9.00% 12.00 + 4.6 + 14.3 16.00 + 9.6 + 33.9 20.00 + 15.7 + 62.3 F I G U R E 6 90. P R O S P E C T S F O R Y I E L D ON E Q U I T Y I N V E S T M E N T M O R T G A G E B.00 P E R C E N T I N T E R E S T 25 Y E A R A M O R T I Z A T I O N 84 P E R C E N T O F P R O P E R T Y C O S T $1,050,000 C A P I T A L I Z A T I O N R A T E . 1 1 0 , 0 0 0 1 , 2 5 0 , 0 0 0 0 . 0 8 8 C A P I T A L C O S T O F P R O P E R T Y $ 1 , 2 5 0 , 0 0 0 Y E A R S 0 1 10 C A P I T A L E O U I T Y Y I E L p s -4 40 30 X 2 O < O Ld OC 0. 0. < 20 2 O < o UJ a. LU Q F I G U R E 7 P R O S P E C T S F O R Y I E L D ON E Q U I T Y I N V E S T M E N T 9 1 . M O R T G A G E : 8 . 5 0 P E R C E N T I N T E R E S T 25 Y E A R A M O R T I Z A T I O N 8 4 P E R C E N T O F P R O P E R T Y C O S T . : $ 1 , 0 5 0 , 0 0 0 C A P I T A L I Z A T I O N R A T E = 1 1 0 , 0 0 0 1 , 2 5 0 , 0 0 0 _ - 0 . 0 8 8 C A P I T A L C O S T O F P R O P E R T Y $ 1 , 2 5 0 , 0 0 0 Y E A R S 0 1 60 F I G U R E 8 P R O S P E C T S F O R Y I E L D ON E Q U I T Y I N V E S T M E N T 9 2 . 9 . 0 0 P E R C E N T I N T E R E S T 2 5 Y E A R S - A M O R T I Z A T I O N 8 4 P E R C E N T O F P R O P E R T Y C O S T $ 1 , 0 5 0 , 0 0 0 20 40 50 2 O < z 53 CL LU Q 60 70' - 93 -f i v e and ten year l i n e s and connecting these points w i t h a No. 60 Mechanical Eng i n e e r 1 s Curve. From Figures 6, 7 and 8, one i s able to read o f f almost any expected equity y i e l d f o r any given h o l d i n g period from one to ten years and f o r any given change i n r e v e r s i o n v a l u e . G. CONCLUSION We have now proj e c t e d and analysed the e n t i r e investment experience from development to eventual s a l e . Out of t h i s has come a range of expected ra t e s of r e t u r n under v a r i o u s assumptions which have been made as r e a l i s t i c as p o s s i b l e . I t must be remembered that t h i s a n a l y s i s considers a develop-ment w i t h r i g i d l y defined c h a r a c t e r i s t i c s from design r i g h t through to methods of f i n a n c i n g . N a t u r a l l y , there are a whole array of v a r i a t i o n s on these b a s i c c h a r a c t e r i s t i c s which could be considered. The d e c i s i o n as to whether or not to go ahead w i t h t h i s proposed p r o j e c t would depend upon other investment o p p o r t u n i t i e s a v a i l a b l e to the in v e s t o r and the expected p r o f i t a b i l i t y of these a l t e r n a t i v e s . What we have done here i s present the prospective i n v e s t o r w i t h a range of expected out-comes should c e r t a i n c o n d i t i o n s p r e v a i l . For example, he can see immediately that i f he obtains mortgage money at 9.00 per cent and operates the v i l l a g e f o r .'f.ive years before s e l l i n g i t at c o s t , he should r e a l i s e a r e t u r n on h i s eq u i t y of 8.00, per cent. Obviously he would be unwise to go ahead w i t h the p r o j e c t under these c o n d i t i o n s i f he can earn more on h i s money on another investment opportunity of equal r i s k . This a n a l y s i s does not provide an answer to the i n v e s t o r but rather presents him w i t h a set s6,'f p o s s i b i l i t i e s on which to base h i s f i n a l d e c i s i o n . - 94 -Footnotes ''"These debt i n t e r e s t charges approximate current rates obtainable i n Vancouver f o r c o n s t r u c t i o n loans. Vancouver Real E s t a t e Board; Real Estate Trends i n M e t r o p o l i t a n  Vancouver 1968, Vancouver, 1968. 3 I b i d . 4 l b i d . ^L. W. Ellwood; Ellwood Tables f o r Real Estate A p p r a i s i n g and  F i n a n c i n g , American I n s t i t u t e of Real Estate A p p r a i s e r s , Chicago, 1967. BIBLIOGRAPHY Andresson, Edda. Lo c a l R e c r e a t i o n a l Resources f o r the Aged. Unpublished Master's t h e s i s , U n i v e r s i t y of B r i t i s h Columbia, Vancouver: 1958. Barker, Michael B. C a l i f o r n i a Retirement Communities. Berkeley: U n i v e r s i t y of C a l i f o r n i a , Center f o r Real Estate and Urban Economics, 1966. Bayne, J . R. D. Aging and He a l t h . Ottawa: Canadian Welfare C o u n c i l , 1965. Beyer, Glenn H. Economic Aspects of Housing f o r the Aged. Research Report #4, I t h a c a , New York: Center f o r Housing and Environmental S t u d i e s , 1961. , and F. H. J . N i e r s t r a s z . Housing the Aged i n Western C o u n t r i e s . I t h a c a , New York: C o r n e l l U n i v e r s i t y , Center f o r Housing and Environ-mental S t u d i e s , 1967. , and Margaret E. Woods. L i v i n g and A c t i v i t y Patterns of the Aged. It h a c a , New York: C o r n e l l U n i v e r s i t y , 1963. B i r r e n , James E. (Ed.). Handbook of Aging and the I n d i v i d u a l . Chicago: U n i v e r s i t y of Chicago Press, 1959. Burgess, Ernest W. (Ed.). Aging i n Western S o c i e t i e s — A Comparative Survey. Chicago: U n i v e r s i t y of Chicago Press, 1960. , (Ed.). Retirement V i l l a g e s . Ann Arbor: U n i v e r s i t y of Michigan, 1961. C a p i t a l Region Planning Board of B r i t i s h Columbia. Senior C i t i z e n ' s Housing  i n the C a p i t a l Region. V i c t o r i a : 1962. Carp, Frances Merchant. A Future f o r the Aged. A u s t i n : U n i v e r s i t y of Texas, Hogg Foundation f o r Mental H e a l t h , 1966. Cavan, Ruth Shonk, Ernest W. Burgess, Robert J . Havighurst, and Herbert Goldhammer. Personal Adjustment i n Old Age. Chicago: Science Research A s s o c i a t e s , 1949. C e n t r a l Mortgage and Housing Corporation. NHA Housing f o r Old People. Ottawa: P o r t f o l i o of r e p o r t s . . S i n g l e - E n t e r p r i s e Communities i n Canada. Ottawa: 1953. C i t y of Vancouver. Vancouver's Changing P o p u l a t i o n . Vancouver: Vancouver C i t y Planning Department, June 1964. C l a r k , Samuel D e l b e r t . Urbanism and the Changing Canadian S o c i e t y . Toronto: U n i v e r s i t y of Toronto Press, 1961. - 96 -Clegg, E. T. S i n g l e - E n t e r p r i s e Community of Settlements. Unpublished Master's t h e s i s , U n i v e r s i t y of B r i t i s h Columbia, Vancouver: 1958. Cumming, E l a i n e and W i l l i a m E. Henry. Growing Old: The Process of D i s - engagement . New York: Basic Books Inc., 1961. Dominion Bureau of S t a t i s t i c s . Advance B u l l e t i n , 1966 Census. Ottawa: Queen's P r i n t e r . Dominion Bureau of S t a t i s t i c s . Selected S t a t i s t i c s on the Older Population  of Canada. Catalogue No. 91-507, Ottawa: Queen's P r i n t e r , 1964. Dominion Bureau of S t a t i s t i c s . Urban Family Expenditure 1964. Catalogue No. 62-527, Ottawa: Queen's P r i n t e r , 1968. Donahue, Wilma (Ed.). Housing the Aging. Ann Arbor: U n i v e r s i t y of Michigan Press, 1954. , and Clark T i b b i t t s (Eds.). P o l i t i c s of Age. Ann Arbor: U n i v e r s i t y of Michigan, 1962. Drake, Joseph T. The Aged i n American S o c i e t y . New York: The Ronald Press Co., 1958. Ellwood, L. W. Ellwood Tables f o r Real E s t a t e A p p r a i s i n g and F i n a n c i n g . Chicago: American I n s t i t u t e of Real E s t a t e A p p r a i s e r s , 1967. Frush, James and Benson Eschenbach. The Retirement Residence. S p r i n g f i e l d , I l l i n o i s : Charles C. Thomas P u b l i s h e r , 1968. G i l b e r t , Jeanne G. Understanding Old Age. New York: The Ronald Press Co., 1952. Hansen, P. From (Ed.). Age With a Future. Copenhagen: Munksgaard, 1964. Housing Research Center of C o r n e l l U n i v e r s i t y . Housing Requirements of the  Aged—A Study of Design C r i t e r i a . I t h a c a , New York: New York State D i v i s i o n of Housing, 1958. I l l i n g , Wolfgang M. P o p u l a t i o n , Family, Household and Labour Force Growth  to 1980. S t a f f Study #19, Economic Co u n c i l of Canada, 1967. Ingleby, Betty and Margaret Yorath. L i v i n g w i t h Old Age. London: Robert Hale, 1966. Kleemeier, Robert W. (Ed.). Aging and L e i s u r e : A Research Perspective i n t o  the Meaningful Use of L e i s u r e Time. New York: Oxford U n i v e r s i t y Press, 1961. Langford, M a r i l y n . Community Aspects of Housing the Aged. New York: Center f o r Housing and Environmental S t u d i e s , C o r n e l l U n i v e r s i t y , 1962. - 97 -Lower Mainland Regional Planning Board. White Rock C i t y Study. Vancouver: M u n i c i p a l Planning S e r v i c e , J u l y 1966. Mathiasen, Geneva and Edward H. Noakes. (Eds.). Planning Homes f o r the Aged. New York: F. W. Dodge Corp o r a t i o n , 1959. M i n i s t r y of Housing and Local Government. Some Aspects of Designing f o r Old People. London: 1962. . Grouped F l a t l e t s f o r Old People, A S o c i o l o g i c a l Study. London: 1962. Moore, Elon H. The Nature of Retirement. New York: MacMillan Co., 1959. Musson, Noverre and Helen H e i s i n k v e l d . B u i l d i n g s f o r the E l d e r l y . New York: Reinhold P u b l i s h i n g C o r p o r a t i o n , 1963. N a t i o n a l C o u n c i l on the Aging. B u i l d i n g f o r Older People. New York; 1961. . A N a t i o n a l D i r e c t o r y on Housing f o r Older People 1965. New York: 1965. N i e r s t r a s z , F. H. J . (Ed.). B u i l d i n g f o r the Aged. New York: E l s e v i e r P u b l i s h i n g Co., 1961. Park, Robert. Human Communities: The C i t y and Human Ecology. New York: The Free Press, 1952. Rosow, I r v i n g . Housing and S o c i a l I n t e g r a t i o n of the Aged. Cleveland: Western Reserve U n i v e r s i t y , 1964. . S o c i a l I n t e g r a t i o n of the Aged. New York: The Free Press, 1967. Sheldon, H. D. The Older Population of the United S t a t e s , New York: John Wiley & Sons, 1958. Smith, Wallace. Housing f o r the E l d e r l y i n C a l i f o r n i a . Berkeley: U n i v e r s i t y of C a l i f o r n i a , Center f o r Real Estate and Urban Economics, 1961. Townsend, P e t e r . The Family L i f e of Old People. London: Routledge and Legan P a u l , 1957. Vancouver Housing A s s o c i a t i o n . B u i l d i n g f o r Senior C i t i z e n s . Vancouver: 1957. Wacker, M a r i l y n n . (Ed.). V i c t o r i a P l a z a Apartments. San Antonio: Clegg P u b l i s h i n g Company, 1960. White House Conference on Aging. Aging i n the S t a t e s . Washington, D.C.: U.S. Government P r i n t i n g O f f i c e , 1961. Wil n e r , Daniel M. e t . a l . The Housing Environment and Family L i f e . B a l timore: The John Hopkins Press, 1962. - 98 -Wilson, Robert L. Urban L i v i n g Q u a l i t i e s from Vantage Point of the E l d e r l y . U n i v e r s i t y of North C a r o l i n a , 1960. Zay, N i c o l a s . L i v i n g Arrangements f o r the Aged. Canadian Conference on Aging, Ottawa: The Canadian Welfare C o u n c i l , 1965. 2. A r t i c l e s and P e r i o d i c a l s Bank of Canada. S t a t i s t i c a l Summary, Monthly. Boigon, I r v i n g D. "Accommodating our Senior C i t i z e n s " i n Ontario Housing. V o l . 12, No. 2. Spring 1966. Brooks, L l o y d . "The Forces Shaping Demand f o r Recreation Space i n Canada", i n Resources f o r Tomorrow Conference, Background Papers. V o l . 2, Ottawa: Queen's P r i n t e r , 1961. Bureau of Economics and S t a t i s t i c s . S a l a r y and Wage Rate Survey, B r i t i s h  Columb i a . V i c t o r i a : Annual. Burns, Peter G. "Housing Ottawa's Older C i t i z e n s " , i n Ontario Housing. V o l . 12, No. 2, Spring 1966. C e n t r a l Mortgage and Housing Corporation. Canadian Housing S t a t i s t i c s . Ottawa: Annual. Chadwick, Harry. "Design: B u i l d i n g Types B a s i c Accommodation f o r Old People", i n The A r c h i t e c t s ' J o u r n a l . V o l . 134, No. 10, London: 1961. Cr e r a r , A l i s t a i r D. "Population Density and M u n i c i p a l Development—The Vancouver, B.C. M e t r o p o l i t a n Area", i n Canadian Geographer. No. 9. 1957. Dominion Bureau of S t a t i s t i c s . New R e s i d e n t i a l C o n s t r u c t i o n . Ottawa: Queen's P r i n t e r , Monthly. Hole, V. and P. G. A l l e n . "Dwellings f o r Old People", i n The A r c h i t e c t s '  J o u r n a l . V o l . 135, No. 19, London: 1962. Kassabaum, George E. "Housing f o r the E l d e r l y - - T e c h n i c a l Standards of Design", i n Journal of the American I n s t i t u t e of A r c h i t e c t s . September, 1962. Robinson, I r a M. "Planning f o r Small Communities i n B r i t i s h Columbia", i n Community Planning Review. V o l . 5, No. 1, March 1955. Robinson, J . Lewis. "Population Trends and D i s t r i b u t i o n i n B r i t i s h Columbia", i n Canadian Geographer. No. 4, 1954. - 99 -Rosow, I r v i n g . "The S o c i a l E f f e c t s of the P h y s i c a l Environment", i n Jou r n a l of the American I n s t i t u t e of Planners. V o l . 27, No. 2, May 1961. Vancouver Real Estate Board. Real Estate Trends i n M e t r o p o l i t a n Vancouver. Vancouver: Annual. W i l l s , Margaret. "What do Old People Want", i n The A r c h i t e c t s ' J o u r n a l . June 13, 1957. 3. Unpublished M a t e r i a l Angel, Jerome H, and D o l i n a F. McKinnon. Housing Needs and Preferences  Among Senior C i t i z e n s . Master's Thesis, Vancouver: U n i v e r s i t y of B r i t i s h Columbia, 1957. B a r b e r i e , D. Joan. Housing P r o j e c t f o r the Aged. Master's Thesis, Vancouver: U n i v e r s i t y of B r i t i s h Columbia, 1959. Grimmer, D. M. The Expansion of Urban Fringe Communities. Master's T h e s i s , Vancouver: U n i v e r s i t y of B r i t i s h Columbia, 1965. Hopkins, John T. A R e c r e a t i o n a l Survey i n West Vancouver. Thesis, Vancouver: U n i v e r s i t y of B r i t i s h Columbia, 1950. Sharp, P a t r i c i a L. Housing P r o j e c t s f o r Old People. Master's T h e s i s . Vancouver: U n i v e r s i t y of B r i t i s h Columbia, 1957. A P P E N D I X APPENDIX TO CHAPTER IV TABLE A - l POPULATION BY SEX FOR CENSUS METROPOLITAN AREAS CANADA 1966 (Population i n Thousands) Canada Vancouver V i c t o r i a Ottawa Montreal Toronto Winnipeg T o t a l Popultn. 20,014.9 Male Female 10,054.3 9,960.6 892.3 441.8 450.5 173.5 494.5 2,436.8 2,158.5 84.2 89.3 241.8 252.7 1,202.0 1,234.8 1,066.0 1,092.5 508.8 248.8 260.0 Population 55 Years of Age and Over T o t a l E l d e r l y Male Female 3,019.3 1,460.0 1,559.3 168.4 80.5 87.9 41.6 18.4 23.2 64.7 27.7 37.0 330.8 149.9 180.9 329.9 147.6 182.3 88.2 40.9 47.3 Percent of T o t a l Popultn. 15% 19% 24% 13% 14% 15% 17% Source: D.B.S. Census. - 101 -TABLE A - I I POPULATION PROJECTIONS BY CENSUS METROPOLITAN AREAS OF VANCOUVER 1961 TO 2000 (Population i n Thousands) Area 1976 1981 2000-2010 Vancouver C i t y 425 435 460 Burnaby 156 173 185 New Westminster 40 42 45 Coquitlam 55 63 140 Port Coquitlam 17 20 40 Port Moody 11 12 22 U n i v e r s i t y End. Lands 15 25 34 D.L. 172 2 2 2 Richmond 94 113 150 Fraser M i l l s - - -West Vancouver 40 41 :45 North Vancouver C i t y 35 37 40 North Vancouver Munc. 75 79 85 D e l t a 40 55 140 Surrey 170 ) White Rock 9 )" - 200 570 Indian Reserves 2 3 3 T o t a l 1,186 1,300 1,961 Source: C i t y of Vancouver; Vancouver's Changing P o p u l a t i o n , June 1964. - 102 -TABLE A - I I I PERCENTAGE DISTRIBUTION OF FAMILIES AND OF UNATTACHED INDIVIDUALS BY INCOME GROUPS AND AGE OF HEAD, CANADA 1965 Income Group A l l U n i ts 24 and under 25-34 35-44 45-54 55-64 65 and Over F a m i l i e s : Under $1,000 2.8 2.8 1.7 1.8 2.5 3.3 6.6 $1,000 - 1,499 2.3 2.1 0.5 1.7 2.4 3.0 5.5 1,500 - 1,999 3.8 2.0 1.5 1.6 2.8 3.9 15.2 2,000 - 2,499 4.0 4.9 1.6 2.5 2.7 5.9 11.1 2,500 - 2,999 3.9 4.9 3.3 2.1 2.9 5.6 8.0 3,000 - 3,499 5.0 9.4 4.1 3.3 3.8 6.0 9.4 3,500 - 3,999 5.0 8.5 5.3 4.8 3.7 5.1 5.7 4,000 - 4,499 5.1 6.4 6.0 5.5 3.7 5.4 4.2 4,500 - 4,999 6.0 8.3 7.8 4.7 6.1 5.6 4.9 5,000 - 5,499 7.1 8.1 8.9 8.0 5.9 6.8 4.5 5,500 - 5,999 6.1 6.3 8.0 7.3 5.5 5.2 2.4 6,500 - 6,999 5.7 4.2 6.0 6.7 6.5 5.0 3.4 7,000 - 7.999 9.1 10.8 11.8 10.0 9.4 7.4 3.3 8,000 - 9,999 13.4 10.8 14.3 15.9 16.7 10.2 5.4 10,000 -14,999 10.6 2.4 8.7 12.9 14.3 10.8 5.4 15,000 and over 3.5 0.4 1.1 4.4 5.8 4.3 1.5 Tot a l s 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Average Income 6,536 5,231 ,6,392 7,331 7,465 6,221 4,259 Med i a n Income 5,909 5,042 6,067 6,485 6,699 5,455 3,185 - 103 -TABLE A - I I I (Continued) Income Group A l l U n i t s 24 and Under 25-34 35-44 45-54 55-64 65 and Over Unattached I n d i v i d u a l s Under $1,000 24.4 22.2 8.8 12.6 12..1 26.4 42.6 $1,000 - 1,499 12.9 12.0 2.5 7.0 10.9 11.1 22.3 1,500 - 1,999 7.3 8.2 3.5 3.1 6.8 6.1 10.8 2,000 - 2,499 6.0 5.6 6.9 5.2 5.6 6.7 6.0 2,500 - 2,999 5.4 12.9 8.4 7.0 9.0 7.1 6.2 3,000 - 3,499 7.2 9.2 12.2 8.0 6.3 6.4 4.3 3,500 - 3,999 7.2 8.1 8.2 13.0 9.7 8.7 1.9 4,000 - 4,499 6.2 10.3 7.5 9.6 7.1 6.7 1.1 4,500 - 4,999 4.5 3.9 8.8 6.7 4.6 6.3 1.2 5,000 - 5,499 3.9 3.0 11.0 4.5 5.0 3.3 0.6 5,500 - 5,999 3.6 1.0 8.2 8.3 6.4 1.6 1.2 6,000 - 6,499 2.1 2.8 3.6 1.8 3.9 2.1 -6,500 - 6,999 1.6 0.5 2.5 4.1 2.2 1.3 0.9 7,000 - 7,999 1.0 - 1.9 2.9 2.6 0.8 -8,000 - 9,999 2.2 - 4.0 5.0 4.6 3.1 0.2 10,000 -14,999 1.2 - 2.0 1.1 2.6 1.8 0.4 15,000 and over 0.2 - - - 0.7 0.3 0.3 To t a l s 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Average Income 2,873 2,497 4,084 3,824 3,835 2,877 1,722 Median Income 2,449 2,577 3,969 3,772 3,443 2,477 1,165 - 104 -TABLE A-IV PATTERNS OF EXPENDITURES FOR FAMILIES AND INDIVIDUALS ELEVEN CITIES, 1964 A l l F a m i l i e s and Ind i v idu a 1 s 55-59 60-64 65-69 70-74 75+ Number of F a m i l i e s i n Sample 184 123 107 90 127 Average D o l l a r Expenditure S h e l t e r 1044 926 827 810 873 Rented 314 307 339 331 474 Owned 394 312 296 271 203 Other S h e l t e r 88 94 22 29 22 F u e l , l i g h t , water 248 214 170 180 174 Medical care 241 263 214 212 261 Recreation 199 132 70 93 64 Tra n s p o r t a t i o n 860 521 483 307 161 T o t a l Expenditure 6734 5758 4195 4217 3136 Percentage D i s t r i b u t i o n S h e l t e r 15.5 16.1 19.7 19.2 27.8 Rented 4.7 5.3 8.1 7.8 15.1 Owned 5.9 5.4 7.1 6.4 6.5 Other s h e l t e r 1.3 1.6 0.5 0.7 0.7 F u e l , l i g h t , water 3.7 3.7 4.1 4.3 5.5 Medical care 3.6 4.6 5.1 5.0 8.3 Recreation 3.0 2.3 1.7 2.2 2.0 Tr a n s p o r t a t i o n 12.8 9.0 11.5 7.3 5.1 T o t a l Expenditure 100.0 100.0 100.0 100.0 100.0 TABLE A-V NUMBER OF HOUSING COMPLETIONS BY MUNICIPALITY IN METROPOLITAN VANCOUVER 1962 TO 1967 1962 1963 1964 1965 1966 1967 a b Single M u l t i p l e S i n g l e M u l t i p l e S i n g l e M u l t i p l e S i n g l e M u l t i p l e S i n g l e M u l t i p l e S i n g l e M u l t i p l e Vancouver c i t y 771 1566 770 2801 712 3432 720 5220 929 4808 600 3017 Burnaby 490 483 411 450 354 573 386 520 520 547 476 1035 New Westminster 25 236 30 378 35 440 34 352 49 725 68 774 North Vane. C i t y 85 76 64 69 76 403 71 157 108 460 96 482 North Vane. Munc. 505 19 437 90 371 - 322 34 398 28 376 48 West Vancouver 236 181 243 343 231 411 238 271 308 367 235 253 Fraser M i l l s - - - - - - - - - - - -Coquitlam 476 12 484 6 472 - 529 50 512 112 635 86 Port Coquitlam 90 - 102 - 112 4 196 10 224 - 417 4 Port Moody 42 3 49 104 30 110 48 22 75 205 134 -Richmond 289 - 292 8 566 82 382 - 432 - 486 119 Surrey 339 24 404 16 384 22 488 178 686 98 708 91 White Rock 31 43 37 - 63 17 60 110 58 156 98 2 Del t a 236 12 268 - 210 - 337 - 486 18 978 45 Un i v . End.Land 2 - 4 - 5 - 5 - 6 - 10 -Unorganized Indian Reserves 19 - 10 - 25 - - - 3 - 42 -Metro Vane. 3636 2655 3605 4265 3646 5494 3816 6924 4794 7524 5359 5950 a. S i n g l e - includes s i n g l e detached and semi-detached houses b. M u l t i p l e - includes apartment u n i t s and row housing Source D.B.S. New R e s i d e n t i a l C o n s t r u c t i o n and Real Estate Trends i n M e t r o p o l i t a n Vancouver 1968. - 106 -TABLE A-VI OCCUPIED DWELLINGS BY STRUCTURAL TYPE AND BY TENURE FOR MUNICIPALITIES OF METROPOLITAN VANCOUVER, 1966 (Dwellings i n Thousands) M u n i c i p a l i t y T o t a l Dwellings S t r u c t u r e Type S i n g l e S i n g l e Detached Attached Apartments Mobile Tenure Owned Rented Vancouver C i t y 138.6 74.7 3.8 60.0 0.1 72 .3 66.3 New Westminster 12.3 6.3 0.4 5.6 - 6 .1 6.2 Burnaby 31.6 24.4 1.4 5.7 0.1 23 .0 8.6 North Vane.City 8.3 5.0 0.4 2.8 - 4 .5 3.8 North Vanc.Munc. 12.8 11.9 0.1 0.5 - 11 .0 1.5 West Vancouver 9.7 7.6 0.2 1.9 - 7 .2 2.5 Coquitlam 9.3 8.3 0.2 0.5 0.3 7 .9 1.4 Port Coquitlam 2.9 2.6 0.1 0.2 - 2 .3 0.6 Port Moody 1.9 1.3 0.2 0.3 - 1 .3 0.6 Surrey 22.2 20.1 0.9 1.0 0.2 17 .7 4.5 De l t a 5.4 5.1 0.1 0.1 - 4 .4 1.0 White Rock 3.0 2.4 0.1 0.6 - 2 .2 0.8 Richmond 12.9 11.8 0.6 0.5 - 10 .6 2.3 Metro Vancouver 272.0 182.6 8.8 79.8 0.8 171 .4 100.6 Source: D.B.S. Census - 107 -TABLE A-VII DISTRIBUTION OF APARTMENTS BY AREA AND TYPE METROPOLITAN VANCOUVER, DECEMBER 1967 Apartment Suites Apartment Suites T o t a l Percentage of T o t a l Percentage of Number C i t y T o t a l Number C i t y T o t a l M e t r o p o l i t a n Vancouver 56,531 • • • 100.0 2,595 • • • 100.0 Vancouver 40,158 100.0 71.0 1,794 100.0 69.1 West End 16,144 40.2 28.6 420 23.4 16.2 South Granville-Oak 5,344 13.3 9.4 321 17.9 12.4 K i t s i l a n o 4,256 10.6 7.5 261 14.5 10.0 K e r r i s d a l e 2,893 7.2 5.1 121 6.7 4.7 Marpole 2,892 7.2 5.1 166 9.3 6.4 East Hastings 5,183 12.9 9.2 310 17.3 11.9 Rest of C i t y 3,446 8.6 6.1 195 10.9 7.5 Burnaby 5,205 • • • 9.2 282 • • • 10.9 New Westminster 4,541 • • • 8.1 181 • • • 7.0 North Vancouver 2,999 • • • 5.3 190 • • • 7.3 West Vancouver 1,843 • • • 3.3 51 • • • 2.0 ^Eastern M u n i c i p a l i t i e s 1,082 • • • 1.9 62 • • • 2.4 **Southern M u n i c i p a l i t i e s 575 • • • 1.0 27 • • • 1.4 Type of S u i t e by M u n i c i p a l i t y One- Two- Three-T o t a l 7 Bachelor 7 Bedroom 7 Bedroom 7 Bedroom 7 M e t r o p o l i t a n Vancouver to 100 /o 16.4 /o 62.3 18.1 /o 3.2 Vancouver 100 19.9 66.1 12.9 1.1 West End 100 24.7 65.3 9.5 0.5 South Granville-Oak 100 22.0 65.7 11.6 0.7 K i t s i l a n o 100 13.0 72.2 14.5 0.3 K e r r i s d a l e 100 8.2 63.4 24.6 3.8 Marpole 100 10.8 73.4 15.4 0.4 East Hastings 100 22.9 65.3 10.9 0.9 Rest of C i t y 100 11.3 62.2 22.7 3.8 Burnaby 100 2.8 51.0 33.7 12.4 New Westminster 100 12.9 63.9 20.8 2.4 North Vancouver 100 3.5 48.1 42.2 6.2 West Vancouver 100 13.6 52.4 28.0 6.0 ^Eastern M u n i c i p a l i t i e s 100 3.0 37.0 41.9 18.1 **Southern M u n i c i p a l i t i e s 100 1.7 34.5 35.7 28.1 "Coquitlam, Port Coquitlam and Port Moody ^Richmond, Surrey, White Rock, and D e l t a - 108 -TABLE A-VIII DISTRIBUTION OF POPULATION FIFTY-FIVE YEARS OF AGE AND OVER BY MUNICIPALITIES OF METROPOLITAN VANCOUVER, 1961 AND 1966 M u n i c i p a l i t y T o t a l E l d e r l y Popultn. 1961 Percent of T o t a l T o t a l E l d e r l y Popultn. 1966 Percent of T o t a l M e t r o p o l i t a n Vancouver 150,718 100.0 168,365 100.0 Vancouver c i t y 90,573 60.1 97,464 57.9 Burnaby 14,693 9.8 16,696 9.9 Coquitlam 4,165 ' 2.8 5,065 3.0 D e l t a 1,927 1.3 2,500 1.5 Fraser M i l l s 18 0.1 19 0.1 New Westminster 6,866 4.5 8,315 4.9 North Vane. C i t y 3,955 2.6 4,641 2.8 North Vane. Munc. 3,946 2.6 4,590 2.7 Port Coquitlam 960 0.6 1,157 0.7 Port Moody 482 0.3 581 0.3 Richmond 4,135 2.8 5,078 3.0 Surrey 10,493 6.8 11,987 7.0 U n i v e r s i t y End. Lands 458 0.3 475 0.3 West Vancouver 4,459 3.0 5,944 3.5 White Rock 3,054 2.0 3,624 2.2 Unorganized 425 0.3 113 0.1 Indian Reserves 109 0.1 116 0.1 Source: D.B.S. Census. - 109 -FIGURE A - l P E R C E N T A G E D I STR IBUT ION O F F A M I L I E S A N D IND IV IDUALS B Y E X P E N D I T U R E G R O U P BY A G E O F H E A D : A L L F A M I L I E S A N D I N D I V I D U A L S , E L E V E N C IT I ES , 1 9 6 4 PER CENT - I 5 I 0 — 5 . 0 20 I 5 1 ' AGE OF HEAD -UNDER 25 n 2 5 - 3 4 I 0 nil 20 — . I 5 — . 10 — 5 — 3 5 - 4 4 o f lnnl in 20 -15 —' 10 -- 5 — 0 — I 5 — 10 -• 5 -0 — 20 — I 5 -I 0 4 5 - 5 4 5 5 - 5 9 n 6 0 - 6 4 un X X JL £L U UNDER i 3,000- | 4,000- ] 5,000- ] 6,000- ] 8,000-$2,500 ; 3,499 | 4,499 ; 5,499 | 6,999 ] 9,999 2,500- 3,500- 4,500- 5,500- 7,000- 10,000-2,999 3,999 4,999 5,999 7,999 14,999 TOTAL EXPENDITURE PER CENT . -35 — "30 -25 -.-20 ---I 5 -10 -5 -0 — 40 -35 -.. 30 -25 -20 -1 5 -10 -5 -0 — 50 -45 -40 -35 -30 -25 -20 -• I 5 — ' 1 0 -5 -0 AGE OF HEAD 6 5 - 6 9 G A II n i l 7 0 - 7 4 Infirm n 75 AND OVER n n n n n n 6,000- ! 8,000- ] 15,000+ 6,999 j 9,999 UNDER | 3,000- | 4,000- ] 5,000-12,500 ; 3,4 99 | 4,499 | 5,499 2,500- 3,500-.. 4,500- 5,500- 7,000- 10,000 2,999 3,999 4,999 5,999 7,999 14,999 TOTAL EXPENDITURE APPENDIX TO CHAPTER VI COST-BENEFIT ANALYSIS OF VILLAGE Note 1 C a p i t a l Cost of V i l l a g e Items 1 and 2 (Land) A t o t a l of 36 acres i s r e q u i r e d f o r the v i l l a g e . In order to a r r i v e at a p r i c e per acre f o r vacant land i n the White Rock area, two sources were con s u l t e d . F i r s t l y , e n q u i r i e s d i r e c t e d at two l o c a l r e a l t o r s i n d i c a t e d that $4,000 per acre would be a reasonable expected p r i c e f o r raw acreage i n the area. Secondly, t h i s o p i n i o n was borne out by studying a number of newspaper advertisements f o r l a r g e acreages i n the area. Item 3 (Detached houses) The cost of c o n s t r u c t i n g the s i n g l e detached houses i s by f a r the l a r g e s t cost item of the v i l l a g e . Cost f i g u r e s used here were obtained from the 1968 e d i t i o n of Real E s t a t e Trends i n M e t r o p o l i t a n Vancouver.''" A t y p i c a l house of 1,200 square f e e t i n Vancouver cost $13.55 per sq. f t . to b u i l d i n 1968--a 1,400 sq. f t . house cost $13.28. A l l o w i n g f o r a 6 per cent increase i n c o n s t r u c t i o n c o s t s , these f i g u r e s would read T o t a l land cost: Housing l o t s 18.4 acres @ $4,000. Remaining land 17.6 acres @ $4,000. 73,600. 70,400. $144,000. - I l l -$14.36 and $14.08 r e s p e c t i v e l y f o r 1969. We are concerned here w i t h two s i z e s of house--about 1,200 and 1,400 square f e e t . Although these houses are to be occupied g e n e r a l l y by people over the age of f i f t y - f i v e , very few design features t a i l o r e d to the needs of the e l d e r l y are a n t i c i p a t e d . One f e a t u r e d i f f e r e n t i a t i n g these houses from the t y p i c a l Vancouver house w i l l be the p r o v i s i o n f o r only two bedrooms. Considering the s i z e of the p r o j e c t and the s i m i l a r i t y i n design of the houses, i t would seem reasonable to expect c e r t a i n economies of s c a l e . Bearing these f a c t o r s i n mind, an average r a t e of $14.00 per square foot has been s e l e c t e d f o r e s t i m a t i n g c o n s t r u c t i o n c o s t s . The t o t a l cost i s c a l c u l a t e d as f o l l o w s : Type of House Number of U n i t s Area per Uni t Sq. F t . T o t a l Area Sq.Ft. Cost per Sq.Ft. $ T o t a l Cost $ Type"A 60 1,145 68,700 14.00 961,800 Type B 60 1,181 70,860 14.00 992,204 Type C 40 1,623 64,920 14.00 908,888 T o t a l 160 204,480 2,862,892 T o t a l Cost of Detached Houses Say $2,863,000 Item 4 (Fourplexes) The f o u r p l e x housing u n i t s w i l l be very s i m i l a r i n design to the s i n g l e detached housing u n i t s . They w i l l , however, have a lower w a l l to f l o o r area r a t i o and, as a r e s u l t , a lower cost per square foot would be j u s t i f i e d . $13.00 per square foot has been used. - 112 -T o t a l Cost of Fourplexes 15 blocks x 4 u n i t s x 980 sq. f t . x $13.00 = $767,000. Item 5 (Apartments) Here c o n s t r u c t i o n costs f o r a t y p i c a l frame, walk-up apartment b u i l d i n g i n Vancouver were obtained from Gordon Soules, Land Use Consultants (a Vancouver f i r m d e a l i n g i n land development f e a s i b i l i t y s t u d i e s ) . T o t a l Cost of Apartments 30 (1 bedroom) s u i t e s @ $9,500 285,000 10 (2 bedroom) s u i t e s @ $10,500 105,000 390,000 Say $400,000 Items 6 to 16 (Recreation F a c i l i t i e s ) C o n s t r u c t i o n costs f o r the community centre b u i l d i n g were obtained 2 from Real E s t a t e Trends. Cost of Community Centre B u i l d i n g 6,000 sq. f t . @ $15.00 $90,000 Costs of item 13 (landscaping) and item 16 (Parking areas) were obtained from Gordon Soules, Land Use Consultants. Cost of Landscaping 56,000 square yards @ 0.75 $42,000  Cost of Parking Areas 20,000 square feet @ 0.50 $10,000 The costs of the other r e c r e a t i o n a l f a c i l i t i e s c o n s t i t u t e such a small percentage of the t o t a l cost that a rough estimate has been used. - 113 -Item 17 ( I n t e r i m Financing) The f i n a n c i n g needs over the s t a r t i n g - u p period are d e a l t w i t h more f u l l y under the s e c t i o n on f i n a n c i n g . The i n t e r i m c a p i t a l s t r u c t u r e w i l l be as f o l l o w s : Equity 200,000 F i r s t Mortgage @ 9%% 3,200,000 Second Mortgage @ 12% 1,200,000 T o t a l C a p i t a l Required $4,600,000 I n t e r e s t charges f o r nine months on these two mortgage loans are c a l c u l a t e d on the assumption that the debt money i s advanced i n equal monthly i n s t a l l m e n t s over nine months. A f t e r nine months, when the v i l l a g e i s f u l l y o p e r a t i o n a l , these two loans w i l l be refunded w i t h long-term debt. I n t e r e s t charges amount to the f o l l o w i n g : I n t e r e s t F i r s t Mortgage loan 126,626 Second Mortgage loan 59,985 T o t a l I n t e r i m Financing Charges 186,611 Say $187,000 Item 18 ( P r o f e s s i o n a l Fees and Insurance) These fees are estimated on the f o l l o w i n g b a s i s : A r c h i t e c t ' s and Engineer's Fees (77o of the cost of ten houses, one f o u r p l e x , apartment b u i l d i n g and landscaping) 47,000 Legal Fees (Say ^% of c o n s t r u c t i o n costs) 10,000 Insurance ($1 per $1,000) 4,000 T o t a l P r o f e s s i o n a l Fees and Insurance $61,000 - 114 -Item 19 (Property Taxes) These are c a l c u l a t e d on the m i l l r a t e f o r White Rock f o r 1968 which was 63.1 Taxable Assessed land value f o r 9 months (say cost) = 144,000 x 3/4 = 108,000 M i l l Rate 63.1 Property Taxes Payable $7,000 (rounded) Item 20 (Promotion) This w i l l i n c l u d e extensive a d v e r t i z i n g through the usual media such as t e l e v i s i o n , r a d i o and the press. An amount of $8,000 i s considered adequate to cover these c o s t s . Note 2 Expected Revenue from Sale of Detached Housing Units Note: D i r e c t detached housing costs account f o r about 68% of the t o t a l c a p i t a l cost of the v i l l a g e of $4.6 m i l l i o n . CAPITAL COST OF SINGLE DETACHED HOUSING UNITS Land (18.4; acres) 74,000 Co n s t r u c t i o n 2,863,000 Recreation F a c i l i t i e s - apportioned (See Note 3) 114,000 In t e r i m Financing Charges (68% of $187,000) 127,000 P r o f e s s i o n a l Fees and Insurance (68% of $61,000) 42,000 Property Taxes (9 months) 3,500 Promotion Costs (68% of $8,000) 3,500 TOTAL CAPITAL COST OF 160 DETACHED HOUSING UNITS 3,229,000 To t h i s cost f i g u r e we can now add a few other items which w i l l be included i n the p r i c e of the houses. These items are, i n e f f e c t , p r o f i t s - 115 -accruing to the entrepreneur. C a p i t a l Cost of Houses 3,229,000 Plus : 1. Savings i n Co n s t r u c t i o n Costs 102,000 The number of u n i t s to be b u i l t would give r i s e to c e r t a i n economies of s c a l e which would enable the b u i l d e r to charge a lower p r i c e per u n i t . This saving has been estimated at 0.50<; per square foot or about k"L of t o t a l c o s t . 2. Premium A t t r i b u t a b l e to Uniqueness of V i l l a g e 100,000 The houses i n the v i l l a g e are part of a planned community designed to meet the needs of the e l d e r -l y and would th e r e f o r e warrant a premium. The s i z e of t h i s premium i s d i f f i c u l t to p r e d i c t and would be dependent on demand. A f i g u r e of about 3% of t o t a l cost has been used. 3. Opportunity Cost of Equity C a p i t a l 9,000 ($200,000 @ 6% f o r 9 months) TOTAL EXPECTED REVENUE $3,440,000 Average Unit P r i c e = 3,440,000 = $21,500 per u n i t 160 In order to r e a l i s e an average of $21,500 per u n i t , the 1,200 square foot houses would s e l l f o r about $20,136 and the 1,600 sq. f t . u n i t s f o r about $26,848 per u n i t . These p r i c e s would y i e l d an equal per square foot p r i c e f o r a l l u n i t s . How does an average p r i c e of $21,500 compare w i t h the average p r i c e of new homes of comparable s i z e i n Greater Vancouver? In 1968, new s i n g l e 3 houses of average 1,192 square feet cost an average of $21,833. These f i g u r e s i n c l u d e only those new houses financed under the N a t i o n a l Housing a c t . Although i t i s d i f f i c u l t to make any sound comparisons, i t would seem reasonable to expect an average p r i c e of $21,500 per u n i t or gross revenue - 116 -of $3,440,000 from the s a l e of the 160 housing u n i t s . Note 3 CAPITAL COST OF RECREATION FACILITIES Note: The r e c r e a t i o n f a c i l i t i e s account f o r about 3.8% of the t o t a l c a p i t a l cost of the v i l l a g e Land ( 1 % acres) 4,500 Community Centre B u i l d i n g plus indoor and outdoor f a c i l i t i e s 168,000 In t e r i m Financing (3.8% of $187,000) 7,000 P r o f e s s i o n a l Fees and Insurance (3.8% of $61,000) 3,500 Property Taxes (9 months) 300 Promotion Costs (3.8% of $8,000) 2,300 TOTAL CAPITAL COST OF RECREATION FACILITIES $186,000 (rounded) A l l o c a t i n g t h i s cost on a per housing u n i t b a s i s , we have: $186,000 6 7 1 , — — = $716. per u n i t Part of the t o t a l cost w i l l be recovered upon s a l e of the 160 houses. In order to recapture the remaining cost w i t h i n four years, the f o l l o w i n g amount w i l l have to be added to the monthly r e n t a l on the other d w e l l i n g u n i t s : $716 x 1 x 1 6 1 R -r — = $15. per month per r e n t a l u n i t So t h a t : Costs recoverable on s a l e of detached houses = 160 x 716 114,000 Costs recoverable from r e n t a l revenue = 100 x $15.00 x 48 72,000 TOTAL COST OF RECREATION FACILITIES TO BE RECOVERED WITHIN 186,000 FOUR YEARS - 117 -The operating expenses of the r e c r e a t i o n f a c i l i t i e s w i l l be d e a l t w i t h next. Note 4 OPERATING EXPENSES OF RECREATION FACILITIES Note: These i n c l u d e the operation of the community centre b u i l d i n g as w e l l as the outdoor f a c i l i t i e s . A d m i n i s t r a t i o n : $ Manager 10,000 Female t y p i s t - c l e r k 4,500 S o c i a l Program Co-ordinator 5,000 General O f f i c e Expense 500 E l e c t r i c i t y and Water 1,000 Heat 1,000 Supplies and Sundries 500 Insurance 300 Property taxes (assessed value = $121,000 m i l l r a t e = 71.1) 9,000 B u i l d i n g Maintenance ( 2 % % of cost) 2,200 Pool Maintenance 600 Grounds Maintenance (two gardeners, sup p l i e s and equipment) 12,700 Allowance f o r replacement of f u r n i t u r e and equipment (10% of cost) 700 TOTAL OPERATING EXPENSES 48,000 Assuming a membership of 500 people, the membership fee to cover the o p e r a t i n g expenses w i l l be: 48,000 500 = $96. per annum or _$_8 per month - 118 -Note 5 YIELD ON EQUITY CALCULATIONS We are seeking the i n t e r e s t r a t e , i , which equates the eq u i t y o u t l a y of $200,000 w i t h the present values of the net cash flow to equity plus cash r e v e r s i o n to e q u i t y . OR Fin d i such that P.V. Net Cash Flow P.V. Cash Reversion = . 2 0 Q 0 0 Q to Equity to Equity ' W r i t t e n a l g e b r a i c a l l y , t h i s becomes R a n + S — - = $200,000 d + i ) n Where. R = annual cash flow to e q u i t y . a = 1 - 1.. r, = present value of an annuity of $1 f o r n ( l + i ) • , 1 n p e r i o d s . S = cash r e v e r s i o n to e q u i t y . present value of $1 r e v e r s i o n a f t e r n ye a r s . 1 d + i ) n i n t e r e s t r a t e . Table A-IX below shows the d e r i v a t i o n of the i n t e r e s t r a t e i which v a l i d a t e s the above equation. TABLE A-IX CALCULATIONS FOR DERIVING INTEREST RATE i FOR DIFFERENT MORTGAGE INTEREST RATES, HOLDING PERIODS AND REVERSION VALUES Mortgage I n t e r e s t Holding Rate Period Change i n Property Value % I n t e r e s t Rate i Net Cash Flow to Equity R $ P.V. Annu i t y of $1 n Cash Reversion to Equity S $ P.V. of Revers ion of $1 ( l + i ) n P.V. Income + Reversion Ra + S 1 n (1+ 8.00% 8.50% 9.00% +25 29.0 2.483 595.1 .2799 196.9 5 years 0 13.0 12.2 3.517 282.6 .5428 196.3 -25 _1 - -29.9 - -+25 17.0 4.659 717.5 .2080 206.1 10 years 0 12.0 12.2 5.650 405.0 .3220 199.3 -25 1.0 9.420 92.5 .9058 198.7 +25 27.0 2.583 588.9 .3027 198.9 5 years 0 10.0 8.0 3.791 276.4 .6209 201.9 -25 _1 - -36.1 - -+25 16.0 4.833 705.0 .2267 198.5 10 years 0 10.0 8.0 6.145 392.5 .3855 200.5 -25 -1 - 80.0 - -+25 25.0 2.689 584.5 .3277 201.5 5 years 0 8.0 3.7 3.993 272.0 .6806 199.9 -25 _1 - -40.5 - -+25 14.0 5.216 696.4 .2697 207.1 10 years 0 8.0 3.7 6.710 383.9 .4632 202.6 -25 _1 - 71.4 - -I n t e r e s t Rate N e g l i g i b l e or Negative. - 120 -Note 6 DERIVATION OF EQUITY YIELD CURVES The re q u i r e d value changes at f i v e years and ten years f o r d i f f e r e n t expected e q u i t y y i e l d s have been derived from the f o l l o w i n g formulae. Required Value Change = R - r . n_ — j — x 100 Where: R = C a p i t a l i z a t i o n Rate = 1^250^000 = u * ^ 8 8 r = Y - MC = B a s i c C a p i t a l i z a t i o n Rate > Y = Equity Y i e l d Rate 1,050.000 „ „, M = Mortgage to Value Ratxo = x 250 000 = * 8 4 C = Mortgage C o e f f i c i e n t = Y + P 1_ - f P = F r a c t i o n of Mortgage amortized during income p r o j e c t i o n term f = Annual mortgage requirement per d o l l a r of mortgage money 1 = S i n k i n g Fund Factor - 121 -Footnotes Vancouver Real Estat e Board; Real Estat e Trends i n M e t r o p o l i t a n  Vancouver, 1968, Vancouver, 1968. 2 I b i d . C e n t r a l Mortgage and Housing Corporation; Canadian Housing S t a t i s t i c s  1968, Ottawa, Annual. 

Cite

Citation Scheme:

        

Citations by CSL (citeproc-js)

Usage Statistics

Share

Embed

Customize your widget with the following options, then copy and paste the code below into the HTML of your page to embed this item in your website.
                        
                            <div id="ubcOpenCollectionsWidgetDisplay">
                            <script id="ubcOpenCollectionsWidget"
                            src="{[{embed.src}]}"
                            data-item="{[{embed.item}]}"
                            data-collection="{[{embed.collection}]}"
                            data-metadata="{[{embed.showMetadata}]}"
                            data-width="{[{embed.width}]}"
                            async >
                            </script>
                            </div>
                        
                    
IIIF logo Our image viewer uses the IIIF 2.0 standard. To load this item in other compatible viewers, use this url:
http://iiif.library.ubc.ca/presentation/dsp.831.1-0102319/manifest

Comment

Related Items