Urban settings offer mass appeal for a number of reasons, but senior housing developers say the biggest reason to go to the city is cost savings.

Though urban environments present unique challenges for infill senior housing projects, they also offer opportunities for developers to offset costs in ways suburban locations might not, which some say can translate into huge savings depending on the scope and size of the project.

Developing in an urban area is largely a “balancing act,” says Cynthia Shonaiya, AIA, LEED AP, and principal at Hord Coplan Macht, a Baltimore architectural firm.

Since urban sites tend to be tighter fits and attract higher rents than suburban senior living communities, building “vertically” rather than horizontally can save developers on land costs, Shonaiya says, however, accommodating for something like underground parking and meeting certain building regulations for multi-story development also have implications for cost.

“You have to be able to offset what could be more expensive from the benefits that you receive from being in that particular location,” she says.

A development that is centrally located or walkable to a metro area that already offers restaurants, retail and entertainment, can enable senior living providers to scale back the amenities they plan to offer in their communities, says John McIlwain, senior resident fellow at the Urban Land Institute and J. Ronald Terwilliger Chair for Housing.

“There are definitely offsets,” says McIlwain. “For example, you don’t necessarily have to build as many amenities into your property. You can build off of the existing amenities in the neighborhood.”

Less amenities can also mean less staff and cutting back on transportation services if the community is located within or near a walkable area, he adds.

Though an urban development might attract higher rents than one would if building in a more suburban locale, cost per land on a “horizontal” structure can exceed some of those expenses, especially when considering the number of units that can be entitled, as well as the added costs of utilities and infrastructure, says Glen Tipton, FAIA, principal at Hord Coplan Macht.

Baby boomers are already showing an increasing interest in migrating toward urban dwellings, according to a 2014 report recently released by the Urban Land Institute and PwC. The “Emerging Trends in Real Estate” report listed senior housing as the second best investment prospect in 2014, just behind infill and intown housing.

“There’s a greater interest in urban living and multigenerational living—nothing isolated,” McIlwain says.

Communities don’t have to be strictly “urban,” but can also be suburban areas that have a semi-urbanized appeal to reap similar benefits.

Baltimore-based developer The Shelter Group, with its senior housing affiliate Brightview Senior Living, is not necessarily focused on urban sites for its developments, but rather convenience and proximity to amenities and walkability, says David Carliner, executive vice president of Shelter Development.

The company oversees nearly 30 senior communities in eight states, has a handful already under construction and about 15 more projects in the pipeline. The communities include independent living, assisted living and memory care.

The Shelter Group typically develops and operates its communities in clusters mostly on the East Coast near metros like Boston, Philadelphia, the tri-state area of New York, New Jersey and Connecticut, as well as in Northern Virginia and Washington, D.C.

Currently, the company is in the planning phase for a senior living community located within walking distance to Maryland’s Rockville Town Center, a mixed-use hub less than 20 miles northwest of the nation’s capital that offers retail shopping, coffee shops, restaurants and other entertainment opportunities.

Project plans call for the Rockville Town Center development to provide a combination of independent living, assisted living and memory care, in what Carliner calls a “dynamite” location that is “catty corner” to the Town Center shops.

Despite the proximity to mixed-use retail, Carliner says the Rockville community will provide a “full-range” of amenities inside of its building, including dining facilities, a pub, libraries, beauty shop and movie theater.

The development also plans to include a retail component available to residents not living within the community.

“Our focus is creating an environment for our residents and making it convenient and accessible for their children who are going to be visiting,” Carliner says.

As the nation’s population ages and the Baby Boomers grow closer to being prospective residents themselves and migrate towards urban settings, reaching out to this age cohort and appealing to their preferences may spur more interest in urban senior living development, suggests Tipton of Hord Coplan Macht, whose firm is the architect for The Shelter Group’s Rockville project.

“With tremendous growth in the number of seniors, [urban development] is not going to be the end of the traditional retirement community that exists today,” says Tipton. “It’s just going to be one of the many options available to people. Eventually, you’re going to have to come up with newer, more cost-effective options.”

Written by Jason Oliva