January 2014
High-Profile Focus: Forecast 2014
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Assisted Living Under Mass. Ch 40B Not Quite There, By Brian D. Jones The aging population has created an ever-growing need for specialized housing for seniors. Those individuals who no longer want to or are able to care for a personal residence often choose to move to an assisted living residence. Assisted living residences are Brian Jones able to provide care to people who are having difficulty living independently, but do not need the daily nursing services provided in a nursing home. These projects are typically welcomed into a community because of the low impacts and added revenues from property taxes. The projects themselves generate little traffic, and the traffic that is generated is traditionally off-peak. Also, the assisted living residences do not add children to the school system. The developments are also seen as a community asset, allowing seniors to stay within the town they currently reside. However, even projects that are popular and fill a need must comply with local zoning – or do they? The Comprehensive Permit Law, also known as Chapter 40B, was created to help address the shortage of affordable
housing units throughout the commonwealth of Massachusetts. This statute encourages affordable housing development by granting the developer the right to exceed local zoning and wetland restrictions in return for building affordable housing. This statute also applies to assisted living residences in order to expand the affordable housing options for seniors. Although many assisted living developers find that the 20% to 25% affordable unit requirement does not meet their development model, some developers are seeing the untapped potential that lies in the 40B pathway. Take for example a developer that has identified a market for an assisted living residence. They have located an appropriate building site within that market but are unable to pursue the project because the use is not allowed within the zoning district, or the dimensional requirements are too restrictive to allow proper siting of the building. The developer may then try to re-zone the property, but this is a time-consuming and uncertain process. Alternatively, the developer may pursue the project under the Comprehensive Permit Law and inject some flexibility into the zoning requirements. This allows the developer to choose the right site, not based on a Zoning Bylaw that may be Continued on page 21
But We Keep on Swinging by Mike Kolakowski The numbers are in, and it seems to everyone at KBE Building Corporation that our economy and industry have passed through the worst of the recession and crept into a slow and sustainable recovery. We all know that the construction market was one of the industries Mike Kolakowski hardest-hit by the recession. Our industry’s nationwide unemployment spiked upwards of 25% at the worst moments, and many projects have languished on drawing boards. Economists are predicting an uneven recovery for construction in 2014 and beyond. The construction market segments that took the biggest nosedives, such as housing and institutional building, are coming back in a big way next year. Multifamily residences and housing facilities will drive 2014 growth, which bodes well for commercial construction companies. Although demand for rental properties soared following the housing collapse, experts predict that single-family home construction will take much longer to catch up, causing residential builders continued heartburn.
One explanation for the swinging 2014 forecast is the simple fact that numbers got so low in previous years. Economists say that while construction starts will rise in 2014, the depth of the recovery lies in institutional building. McGraw Hill Construction (MHC) forecasts that 2014 will see the end of a three-year decline in institutional building with a modest 2% gain. Of the sectors that make up institutional building, educational facilities show the greatest potential. Educational buildings are predicted by MHC to come back from a negative 3.4% in 2013 to a positive 3% in 2014. That’s great news for construction companies who know how to work with campuses on asset reinvestment programs – comprehensive facilities upgrade, maintenance, and improvement programs. Our 2014 contracts support that forecast. Asset reinvestment isn’t glamorous, but these facilities maintenance programs have given KBE Building Corporation a way to maintain relationships with our education sector clients during the lean years when there was little money for new building. If the forecasts turn out to be true, KBE and other construction companies who turned to maintenance and facilities management during the recession are ideally positioned to take the lead on any new building projects. Continued on page 46
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