When Someone Refers to a “Special Use Residence” This Is What They Mean
A special-use residence is a distinctive housing type designated for a specific use, such as childcare, assisted living, or nursing. The term “special use” is attributed to the fact that these properties serve a unique function and are subjected to different regulations than typical residential properties.
In this blog post, we will delve into the distinctive features of special-use residences, what makes them special, and the implications of having one.
So, keep reading to find out more about special-use residences.
Why “Special Use?”
Special-use residences deviate from normal, more traditional, residences as they often serve religious institutions, medical facilities, educational establishments, or any other type of facility that requires residential space.
Special-use residences in certain areas are bound by state law and other regulations based on their purpose and intended use. Compliant with zoning regulations, building codes, and other safety regulations, these distinctive residences may also be subject to special taxes or fees and require special-use permits.
Plus, depending on the purpose of the estate and local ordinances, special-use residences may qualify for exceptional tax benefits or other forms of public support.
Types of Special Use Residences
Bed & Breakfast
A Bed & Breakfast is classified as a special-use residence given its unique nature of independently owned and operated lodging. These establishments are renowned for offering guests a personalized and distinctive accommodation experience that traditional hotels and motels cannot replicate.
Rooms within Bed & Breakfast establishments are styled with a homey ambiance, often decorated to suit the property’s design ethos, and visitors are treated to a range of homemade meals and snacks.
Amenities and recreational activities are sometimes offered, including modified outdoor and special group events. Bed & Breakfast lodgings assure a personalized and homely experience and are ideal for guests looking for such an environment.
Senior Care Facility
A senior care facility caters to the unique needs of older adults. It offers a secure and safe living environment with social amenities, medical care provision, and recreational activities. Besides, senior care facilities have evolved with time to accommodate progressive changes in the senior community. Modern features such as technology access and excellent care for seniors with chronic illnesses are available. These facilities are perfect for seniors wanting to maintain their independence while still receiving the necessary support and health care.
College or University Residence Hall
The college or university residence hall is categorized as a special-use residence, intentionally crafted as a living environment exclusively for pupils enrolled in higher education. Typically, these halls offer amenities that are not available in other accommodations, such as study areas, common rooms, laundry facilities, and other forms of on-campus entertainment.
Residence halls allow a more communal atmosphere than a typical apartment building, nurturing the development of profound relationships between roommates and hallmates. Thus, residence halls are considered special-use residences because they offer students a unique living experience that cannot be replicated in other types of housing.
Single-Room Occupancy (SRO)
A Single-Room Occupancy (SRO) is a unique living space designed for people who can’t afford or find standard housing. These small, one-room units often have shared bathrooms and kitchens. SROs are common choices for low-income individuals, people experiencing homelessness, seniors, and students who need affordable living options. SROs also create a supportive community for residents who face similar challenges.
Tax Benefits to the Developer
Tax abatements are a tax incentive offered to developers who construct specialized residential developments. Local governments or related agencies reduce the property taxes of developers to make projects more profitable, particularly in areas where their construction might not otherwise make financial sense. These tax breaks can range from small tax incentives for 10 years to longer-term tax incentives lasting up to 25 years.
Two Tax Incentives Commonly Available to Special-Use Developers
Among the tax abatements that are most popular with developers are the Historic Rehabilitation Tax Credit Program and the Low Income Housing Tax Credit Program.
Historic Rehabilitation Tax Credit Program: The rehabilitation tax credit awards developers a federal income tax credit worth 20% of the cost of restoring a historic building.
Low-Income Housing Tax Credit (LIHTC): The low-income housing tax credit encourages developers to invest in the new construction, acquisition, or rehabilitation of low-income housing.
The application process for tax incentives varies depending on the type of incentive and the location. Contact your local government or related agency to learn more about each tax incentive’s specific requirements and application process. They can provide you with more information and help you get started. Alternatively, you can also contact the professionals at Rockford Construction for assistance.
Increased Revenue for Property Owners
Special-use residences can be an excellent way for property owners to increase their revenue. By converting unused or underutilized spaces into special-use residences, landlords can capitalize on underutilized real estate to create additional income. This property type can be used for short-term rentals, such as a vacation home and Airbnb, or more permanent uses, such as student housing.
This allows property owners to make the most of their resources and take advantage of new opportunities in the rental market. And as we’ve seen, special-use residences often come with additional benefits, such as tax incentives, that can further increase profits.
Special Considerations for Senior Care Facilities
Property owners who use their residences as senior and long-term care facilities may be eligible for tax breaks, government grants, and other incentives. Zoning regulations could also be relaxed for larger facilities and multi-story structures.
Property owners can apply for a special construction permit to accommodate medical equipment like elevators, wheelchair ramps, or other assistive devices. They may also be eligible for reduced utility bills and access to discounted labor and supplies.
These special considerations make it easier for property owners to provide quality senior care facilities.
Considerations for Special Use Residences
The regulatory requirements for owning or operating a special-use residence depend on the type of residence and its business activities. For instance, if the residence is intended for vacation rental, the owner may need to obtain a business license and special use permit, pay local taxes, adhere to zoning laws, and follow relevant regulations and laws.
Other special-use residences, such as long-term care homes, assisted living facilities, and group homes, may have more rigorous regulatory requirements, including extra licensing obligations and inspections.
Some special-use residences may be subject to safety and environmental regulations, including lead paint abatement and smoke and carbon monoxide detector installation. You must know local regulations and other applicable laws to determine if operating a special-use residence is a viable option.
Regarding accessibility requirements associated with owning or operating a special-use residence, it is important to ensure that the space complies with the Citizens with Disabilities Act and is accessible to people with visual, hearing, or movement impairments which include, at minimum, ensuring an accessible entrance and that the residence is equipped with appropriate signage and amenities such as ramps, elevators, and accessible bathrooms.
The residence must have an accessible parking lot with designated spots for individuals with disabilities. It must also be free of any architectural barriers that could restrict the movement of such individuals. Additionally, the residence should provide accommodations for service animals and have adequate lighting and signage to aid individuals with disabilities in navigating the space.
Special Insurance Coverage
Owning or operating a special-use residence may require additional insurance coverage to ensure that all of the unique risks associated with the property are properly covered. This can include coverage for buildings, contents, and any liability associated with the property.
Depending on the type of property, insurance coverage may be necessary for natural disasters such as floods or earthquakes and liability for any recreational activities on the premises. Speaking with an insurance provider is crucial in determining the necessary coverage to protect the property, visitors, and occupants.
In conclusion, understanding the definition of a special-use residence and its context is crucial. Regulations for special-use residences can vary by jurisdiction, so researching and complying with applicable rules is essential. With the proper knowledge, special-use residences can be valuable assets to any community.
To learn more about getting started with special-use residences, contact the expert team at Rockford Construction today.