Demand for Beach age-restricted housing over, builders say

When real estate was hot, upscale, age-restricted developments were all the rage. Planning boards loved the quasi-retirement communities aimed at baby boomers for their promise of increasing the tax base without adding kids to burgeoning schools and cars to crowded roads.

Many large projects were looked on favorably - and approved - if they included some units restricted to people 55 and over. Images of silver-haired "active adults" riding bikes and hugging grandchildren in front of tidy homes were common in real-estate marketing material.

But now the fad has run its course. The poor economy, a glut of age-restricted units and older consumers jittery about retirement finances contributed to the demise.

"It's dead," said Gary Werner, a Chesapeake developer who built one age-restricted project. "It's like something just turned the spigot off completely. It's not even a drip."

As a result, developers are returning to planning boards and city councils for permission to scrap age restrictions on approved projects. Hundreds of approved units in Chesapeake and Suffolk have been converted to regular projects, and more requests are likely on the way.

In Virginia Beach, the city's first request from a developer to drop the age restriction on a development has ignited a debate over city planning goals.

The developer, Home Associates of Virginia Inc., wants permission to build 53 traditional townhouses in part of the Sherwood Lakes development, instead of the 60 age-restricted condominiums approved in 2006.

The development off Princess Anne Road near Pungo was built in the city's "Transition Area," a planning special zone designed to buffer the city's rural southern area from its suburban core.

When it was approved four years ago, developers touted Sherwood Lakes' "intergenerational" appeal but now say there is no market for the product, which represents about a quarter of the 240-unit project.

Officials from Home Associates declined to speak on the record.

"We overbuilt the market," said Eddie Bourdon, a lawyer representing the company.

"You're competing with places like Arizona, Florida and even Myrtle Beach. To build something there's not a market for doesn't make any sense."

City planners said allowing the company to drop the age restriction would be contrary to the city's growth plan and could set a dangerous precedent for other developers who might want to scrap the restriction.

Including Sherwood Lakes, there are 1,203 age-restricted units either built or planned for the Transition Area.

Despite the city staff's recommendation to deny the request, the Planning Commission voted 10-1 for it.

"It's just a kind of a bailout," said Al Henley, the dissenting vote on the Planning Commission.

Supportive commissioners said the project should move forward without age restrictions because that will help the units sell in a tough economy.

A city traffic engineer said the change would not have an effect on roads. The project will add 11 students to local schools, the planning report said.

City Councilwoman Barbara Henley said if more developers ask to get rid of age-restrictions, the cumulative effect could be significant, especially if it leads to the watering down of other growth restrictions. Her husband is Al Henley's cousin.

"I'm really concerned how we're going to provide infrastructure," she said. "The age restrictions are just a start."

Henley said she's not sympathetic to the economic argument.

"I've been on the City Council on and off for 30 years, and I've heard so many times the numbers won't work," she said. "For me, it's the same old, same old."

The request goes before the City Council on Jan. 26.

In the past two years, Home Associates of Virginia has given more than $10,000 to City Council members, including $3,500 to Rosemary Wilson, $2,750 to Glenn Davis, $2,500 to Harry Diezel, $1,000 to Mayor Will Sessoms and $1,000 to Ron Villanueva, now a state delegate.

The controversial history of the Sherwood Lakes development has intensified emotions in the debate.

In 2006, a divided City Council voted to allow Home Associates of Virginia to build 240 units in Sherwood Lakes, twice as many homes as allowed for in city regulations. The permission was granted after the developer argued that two large water-filled sand pits on the property should be counted as developable land because technically they could be drained, filled and built on.

"That was a ridiculous way around the rules," said Robert Hennessy, president of the Heron Ridge Estates Homeowners Association, a nearby community. "They're basically pulling another fast one now because they aren't selling."

Bourdon said the 2006 decision is not relevant.

"We're living in the present, not in the past," he said. "If they thought they could sell these units, they'd build them."

Aaron Applegate, (757) 222-5122, aaron.applegate@pilotonline.com