Converting suburban houses into group homes – but they cannot look like group homes

Multiple suburbs in the Chicago region allow for the conversion of suburban single-family houses into group homes for seniors or adults with disabilities. However, they generally agree that the conversion cannot alter the appearance of the home:

Photo by Dave Frisch on Pexels.com

A 2021 Northwest Municipal Conference survey of its members identified 14 suburbs permitting group homes for particular populations, largely those with disabilities.

However, the conversion of homes into assisted living centers for seniors is becoming increasingly prevalent. Schaumburg has seen two proposals in the past year alone. There are also online seminars offered to entrepreneurs looking to flip homes and turn them into assisted living centers, aimed at the nation’s aging population.

Regulations vary in towns that allow such conversions. Some require approval from a village board or city council, while other towns don’t require such approval because these uses are already allowed in its residential code. But all enforce rules against external changes to the houses that would identify them as group homes…

“You’ll be driving down a neighborhood and never know we’re there apart from a van picking people up or dropping them off,” said Little City Foundation CEO Rich Bobby…

While the intention of the homes is to blend in, a degree of engagement with neighbors is sought in advance to paint an accurate picture of those who are going to live there.

A common suburban story regarding proposed changes to houses might go like this: neighbors get wind of a possible change in a subdivision or residential area. They express concerns about such changes altering the character of the community. Perhaps there might be increased traffic, noise, and lights? They share that they moved into this location because it was a quiet, residential space. Changes to that format threaten their day-to-day experiences and their property values.

But what if the changes to that house or residence were minimal in nature? Or, as the regulations above suggest, the exterior of the home does not look any different and there is not a noticeable change in day-to-day life around the home? Would this allay all the concerns?

From this article, it sounds like concerns have been at a minimum thus far. The number of conversions is small. Perhaps there is a tipping point where multiple proposals in the same neighborhood or on the same straight might draw more attention. But if neighbors do not see significant changes on the outside, they might not have many issues.

Given the needs of the suburban population, I suspect more suburbs will face this particular issue in the coming years. Building large facilities can be difficult and costly. If converting homes to group homes can help serve residents and neighbors are okay with it, perhaps this will happen in a lot of places.

(This reminds of a 2013 book looking at affordable housing built in New Jersey where one of the goals was to design the multi-family housing units in a way that people passing by would not identify them as affordable housing. With some design work, this was largely accomplished and relatively few neighbors opposed the project.)

Demographics suggest don’t invest in McMansions; invest in group homes

Looking at the demographic trends in the United States, one analyst suggests investors shouldn’t look to McMansions but rather group homes:

A large majority of older Americans want to remain in their homes, and more importantly, in their communities. The homes they raised their families in might not suit their purposes any longer, so what are their options? In 2005 (before the housing crises) a survey was taken by AARP of adults over the age of 50, and they reported that the homes they currently lived in wouldn’t accommodate them “very well” as they aged. So these seniors have a push-pull of wanting to “age in place” but their homes aren’t suitable for them to remain independent.

Seniors in the early stage of making a housing transition will remain in owner-occupied or rental housing and live independently. Only about 4.7 percent live in a group home and 7-10 percent live in a senior facility.

I see group homes as an area of opportunity. Group homes could become the answer for many seniors. I have been preaching for the last year or two that new homeowners aren’t looking for McMansions. New buyers (Echo Boomers and younger) want something simpler that gives them more flexibility. So what will happen to these McMansions? Group homes could be perfect. Many of these homes were built with private baths attached to each bedroom, large kitchens and great rooms. These homes can be adapted for disabilities by adding lifts and rails in bathrooms, for example. Then these homes can operate very well as group homes. This can give seniors the option to stay within their community, but not be isolated. Not to mention it’s a cash cow for investors, I’ve seen these kind of properties create a 100% positive cash flow (this would include covering the debt service).

As seniors make the enevitable change they will release much more housing than they absorb, but it will be absorbed by newly formed households. For example, between 2000 and 2010, people who began the decade age 55+ moved out of 10.5 million housing units. Most of these were owner-occupied dwellings. During the same period households grew (under the age of 55) by 21.8 million. Thus leaving about 11.2 million new households needing housing. Take into consideration that forty percent of this time was during a major recession where we saw much slower household formation.

I can see two quick issues with group homes. First, some of these places today are very expensive as they can require residents to buy a unit and pay extra fees on top of this. Second, communities would have to approve the zoning necessary for these homes.

This reminds me of Kate Bollick’s Atlantic cover story “All the Single Ladies.” She ends the story by discussing a “dormitory” for women in Amsterdam that helps provide community while giving adults some individual space. Bollick suggests this sort of living space could be the wave of the future but I think it might take some time to catch on in the United States.