A mixed-use development that includes senior housing will no longer require the lessee to be 55 years or older, just the occupant.
At an Aug. 26 meeting, the Dunwoody Development Authority – a body which issues tax breaks for real estate projects – approved changes to the “Memorandum of Understanding” for a development at 84 Perimeter Center East at the intersection of Ashford-Dunwoody Road. The project is expected to include about 225 age-restricted rental housing units and 43,000 square feet of retail and commercial space.
The authority initially approved the MOU, which begins the process of issuing funds, at a May 20 meeting. The estimated value of the offered tax break is $7 million over 10 years.
This project has not been without controversy. Both Dunwoody City Council members and authority members expressed concern over the age-restricted nature of the apartments and how that would be enforced.
According to the federal Fair Housing Act, one of two conditions must be met for age-restricted housing that is not assisted living. Either all occupants must be over the age of 62, or 80% of the occupied units have to have someone over the age of 55 living in them. Those occupants could have a younger spouse, child or grandchild also living in the unit. The other 20% of occupied units can be filled with residents of any age.
When the MOU was initially approved, it stipulated that the apartment would not count as “age-restricted” unless the person whose name was on the lease was over 55 years old. If at least 80% of the occupied units in the property are not leased by someone 55 years or older, then the tax abatement could be withdrawn.
At the Aug. 26 meeting, John DiGiovanni – a representative of property owner JSJ Perimeter LLC – asked the authority to change language in the MOU so that only the occupant of the apartment had to be 55 or older. He noted that the Fair Housing Act uses the word occupant, not lessee, and said the development team is having ongoing negotiations with a senior housing group who worry the stipulation would reduce the amount of people who could actually live in the apartments.
“The point they were making from a business standpoint is that the occupant who is 55 and older is not always the lessee,” DiGiovanni said. “Sometimes it’s children or grandchildren that lease it for them. Sometimes the 55 and older person, their spouse is not 55 and older.”
DiGiovanni also asked to extend the outside closing date for the property. The original MOU required the developer close its bond transaction by Dec. 31, 2021.
“Things are taking a little longer, with the health conditions and COVID and what have you,” he said. “We’re just now getting to the finish line with the senior housing developer, so we just don’t think we can make an end of year closing.”
Most authority members said while they were originally skeptical of the change, they had come around to it. According to Economic Development Director Michael Starling, if the property is sold, it would still require age-restricted housing. The new owners would have to go before the City Council for any changes.
One authority member, Susan Mitchell, voted against the changes. She said she was worried about enforcement of the age-restricted stipulation and thinks the MOU has “more teeth” if the lessee has to be 55 years or older.
“This makes me very uncomfortable,” she said.
DiGiovaanni said there are mechanisms in the zoning conditions and the Fair Housing Act to ensure that the apartments stay age-restricted.
“We have to do an audit – I think it’s every year or every two years – and the city has requested under the zoning conditions that we supply them with that same audit,” he said. “It’s a check and balance that’s in the Fair Housing Act and duplicated by the zoning condition.”
DiGiovanni said he could not name the senior housing group yet, but that it is a “substantial senior housing developer.” He said the developer hopes to have a contract signed with the senior housing group in the next few weeks.
Correction: this article has been updated to include Michael Starling’s correct title, economic development director.