Minka, the tiny home model co-founded by elder care innovator Dr. Bill Thomas, recently took another step toward mass scalability and integration within the existing senior living framework.
Walnut Creek, California-based senior housing and care provider organization The Covia Group and Ziegler Link•age Funds announced a joint investment in Minka Homes and Communities over the summer, which will support the development of middle-market senior housing.
Covia believes the Minka model is an answer for a construction market grappling with rising development and materials costs, and plans to erect a demonstration home to determine how the buildings will complement existing campuses, as well as be effective dwelling units for seniors living off-campus.
Thomas, meanwhile, believes that mastering California’s complex building codes is the best way to ensure that Minka is a scalable model that can be built everywhere.
“Constraints are useful spurs to innovation,” he said.
The seeds for the Covia-Ziegler JV started in August 2019, Covia Chief Strategy and Advancement Officer McMullin told SHN. A group from Covia flew to Minka’s headquarters in Ithaca, New York to evaluate the concept, the time and effort put into developing it, and to tour and inspect Minka’s plant where it builds its homes.
Covia is on a growth trajectory. In June, it announced an affiliation with nonprofit provider Front Porch, creating a combined organization with 54 senior housing communities totaling 4,408 units. Front Porch was 22nd-largest nonprofit provider by total unit count in the 2019 LeadingAge Ziegler 200 list; Covia ranked 47th.
The following month, a group from Minka — minus Thomas, who participated online — flew out to Covia’s Spring Lake Village community in Walnut Creek for a daylong strategy session focused on how Minka could fill Covia’s wishes for expanding the community, build accessory dwelling units, and create workforce housing for staff.
California’s building code regulations emerged as an immediate obstacle. State building code regulations are among the most detailed in the United States. Furthermore, some municipalities have strict limitations on lot size and building heights which restrict what can be built, along with vocal public opposition to building affordable housing, according to a 2019 report from the Mercatus Center at George Mason University.
Before Covia moved forward with discussions, it wanted to understand if the model could be built to code, while meeting a California aesthetic.
“It could be the greatest idea possible. But if people don’t see themselves living there and get excited about living there, all of the research and good ideas that go into it aren’t going to play out,” McMullin said.
One thing was clear: The need for innovative, affordable housing for older adults is a pressing concern nationally and especially in California. Rising rents in markets such as San Francisco, coupled with raging wildfires and financial distress stemming from Covid-19, are exacerbating the problem. As the issue becomes more acute, seniors in the Golden State with fixed incomes and rising rents find themselves at risk of homelessness in the event of an acute health care event. Last week, Governor Gavin Newsom signed legislation into law granting protections to renters from evictions due to financial hardship stemming from the Covid-19 pandemic through January 31, 2021.
Satisfied that Minka could help meet those challenges while also adhering to regulatory requirements, Covia moved forward. It had discussions with Ziegler Link•age representatives during the Chicago-based specialty investment bank’s strategy and finance conference last September. Covia is an investor in Ziegler Link•age Funds.
The discussions, along with the seriousness of Ziegler’s interest in investing fund dollars in Minka, gave Covia the confidence to move forward. It proposed the investment to its board of directors last October.
Around the same time, Ziegler decided to move forward with an investment in Minka through the Link•age Funds, which gave Covia the ability to leverage its relationship with the bank. Having Ziegler on board as a partner ready to invest was enough for Covia’s board to approve the move.
“It strengthened most of our investments because we were willing to do this together and devote a significant amount of money to this,” McMullin said.
With the investment complete, Covia is turning its attention to erecting the demo home.
The first hurdle to clear is working with state and local planning departments to determine if the Minka model meets all regulatory requirements.
Another question that Covia aims to answer is how the small home model fits within an existing building environment, as well as what a standalone small home community would look like. Once all the regulatory obstacles are satisfied, Covia envisions adding as few as three Minkas on a campus, or it could build a dedicated community with as many as 100 small homes.
“If we were to develop a Minka community from scratch, how would we want people to live in that community? What would the dimensions be? We have to do some additional research to get at that,” McMullin said.
Covia is also looking to see how Minka’s technology platform can be integrated into Covia’s framework. It is exploring bringing Minka homes to families as accessory dwelling units for their parents to live adjacent to their homes, with Covia providing home health care and community-branded services.
“Covia’s community services are about social engagement and interacting with your outside community — having the connections that you need to thrive,” she said.
And that aligns with a key component of the Minka model: a balance between community, independence and infection control that has been exposed as mismatched during Covid-19, Thomas told SHN.
“When I founded Minka, what I was really interested in was resetting that balance,” he said. “The conventional wisdom of the field is that you need a certain number of acres to get 100 or more units and parking and the port cochere. But it doesn’t have to be that way.”
From Thomas’ perspective, mastering California’s byzantine building regulations is the best way to ensure that Minka is a scalable model, anywhere in the country.
“Rather than looking at California’s regulatory environment as a negative and saying, ‘oh, no,’ look at it as a positive and say, ‘we climb that mountain and we can see for miles,’” he said.