Boca meets North Hollywood: seniors finding luxury at home. (Up Front).

There's not a shuffleboard court in sight at The Piedmont, a just-opened apartment complex for seniors in North Hollywood.

There is a game room with billiard tables and a day spa where residents can get facials and massages. There is a clubhouse with a state-of-the-art media room and a tech center with computers and Internet connections.

The Piedmont, developed by Meta Housing Corp., is one of the first luxury apartment complexes for active seniors to open in the San Fernando Valley, and experts agree it won't be the last.

"Once a product shows some successes, everyone wants to get involved," said Glenn L. Carpenter, president and chief executive of FountainGlen Properties LLC, which is building two such complexes in Santa Clarita Valley. "We're seeing more and more people thinking about it, wanting to know more about it or starting to do it."

Luxury apartments geared to independent, active seniors, with rents that can range from about $1,000 up to $1,750, are already a visible part of the landscape in San Diego and Orange County. More recently, developers like Meta, which is about to begin another complex in Burbank, and Fountain Glen have turned their attention north to several greater Valley communities.

Unlike past generations, which saw granny and gramps head for Palm Springs or Boca Raton when they hit their golden years, many seniors today want to stay close to home or near to where their children have settled. That makes areas like Burbank, North Hollywood and Santa Clarita fertile ground for these developments.

"Experts say that the best way to spend your retirement is to age in place," said Allen Martin, director of the Consumer Resource Center at Cal State Northridge. "You should be around family, friends, church or the temple that (is) familiar. Who wants to go find a new hair stylist or mechanic at that time in their life?"

By 2020, baby boomers will have stacked the populations of those over 65 to a whopping 53.7 million, from a current 34.9 million. The upcoming crop of seniors is not nearly as likely to be widowed as were past generations, and they are far more likely to remain independent for a longer period of time. Add to that tax law changes that now make it possible for seniors to sell their homes without incurring tax penalties or having to roll their profits over into another home and a wholesale change in retirement lifestyles is taking place.

Empty-nesters are flying the coop for a hassle-free renter's lifestyle where they can enjoy many of the same amenities they had as homeowners.

"Some national economists that have looked at this think that it can increase apartment demand by as much as 10 percent over the next few years," said Annie Gerard, vice president of the seniors/multi-housing division for National Survey Systems, an Irvine based market research company that specializes in apartment development.

Assisted-living glut

The potential size of the market is attracting a number of developers, as are a number of dynamics that have occurred in the industry in recent years.

The assisted living sector, facilities for seniors that need help with daily chores and grooming, which was the darling of the industry and Wall Street a few short years ago, is now overbuilt.

Other developers who were able to ride a gravy train of federal tax credits to build affordable housing for seniors on restricted incomes during the 1990s, are finding that market has become fiercely competitive. Programs offering the highest levels of tax credits are getting seven and more applications for every dollar of tax credit available. And the cost of filing an application can run to $50,000.

"It's a major beauty contest," said Gerard. "It's totally high stakes gambling. It's so expensive and your chances of getting tax credits on that basis are low."

On the other hand, luxury rentals for seniors at market rate rents is proving a highly successful niche. Unlike the World War II generation, baby boomers, and those that immediately preceded them, are used to a lifestyle marked by considerable disposable income, and they are willing to spend money to maintain it.

"Market rate is getting tons of interest," said Gerard. "We are seeing assisted living guys moving into the independent arena. And there's a great deal of interest from institutional apartment builders. They're recognizing this is an area they cannot afford to overlook."

Meta, among the best-known developers of housing for seniors, often pairs affordable units with market rental units by taking advantage of what available tax credit and bond subsidy programs it can.

While so-called 9 percent tax credits, which can typically subsidize an entire development of affordable housing, are becoming far more difficult to win, another program that offers credits of 4 percent is still widely available.

Under these tax credit programs, a builder gets credits of 9 percent or 4 percent of the "hard costs" of a development for about 10 years. The developer in turn sells those credits for cash -- usually about 75 cents or 80 cents on the dollar -- to funds that then re-sell them to other corporations. The financing raised, along with a low-interest mortgage rate for the balance of the cost of the development will make these projects pencil out at rents that are typically set for those with incomes of less than 60 percent of the area's median income.

Different rates

In North Hollywood, Meta first built Park Plaza with a 9 percent tax credit the company was able to snag. About 80 percent of the rents in the 203-unit complex are set for affordable ranges.

The company developed The Piedmont, which is across the street from Park Plaza, at 6750 Whitsett Ave., in the second phase, creating a market-rate complex of 198 units.

"So between the two we have 60 percent affordable and 40 percent market rate," said John Huskey, founder and president of Meta.

"When we buy a property we basically say does this property make sense for us as a conventional luxury apartment project, and if it does we go ahead and purchase it," said Huskey, who is considered a kind of granddad of the senior housing industry. "Then we say, now that we have it, we'll go through two or three rounds of applying for tax credits. First we go for 9 percent, then we go for 4 percent. The key is we have to have sites good enough that they will work as conventional apartments."

Mets's first preference for those sites is to find areas which were first populated by young families a generation ago.

"Most important is to see if we can find sites in communities that 30 years ago people bought homes in," Huskey said. "They're in the Lion's Club or a church group. They don't need their house, but they say we see the values of living in a community. North Hollywood fits that category."

FountainGlen takes a somewhat different approach, seeking sites where young families are currently the largest demographic. The company sees a decided preference among seniors to be close to their children and grandchildren.

"We run annual focus groups where we take various projects that in a lot of cases would be a year after they've been built and occupied and ask people why they came," said Carpenter. "The two reasons are, they come because family is in the area and, number two, because they've always lived there. If you look at our portfolio of 12 properties getting up to 3,000 units, most of the residents, about 6 percent, would come within a 10 mile radius and 40 percent would come from outside."

FountainGlen, which so far has built most of its communities in Orange County, plans to start grading this summer for an active senior community in Santa Clarita with 226 units and one in Stevenson Ranch with 272 units. The complexes are set to open in mid 2004.

Gerard said she even sees increased interest by developers like Legacy Partners and Archstone Communities, which are luxury apartment builders for the general market.

"By sheer force of demographics, we're going to see lots of innovation of housing geared to older buyers and renters, and it's going to become much more varied," she said. "We're at the beginning of it."