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Senior Housing: 2011 Issue Brief

by Published On: Apr 01, 2011

Issue

Continuing to meet our nation’s senior supportive housing needs, LeadingAge is encouraged by the administration’s proposals to increase opportunities to merge services and the HUD Section 202 Supportive Housing for the Elderly Program to allow seniors to age in place.

With the passage of LeadingAge’s signature section 202 reform legislation the president has once again requested funding for the development of new Section 202 units. 

The administration’s recommendation acknowledges the needs of the growing senior population and the success of the Section 202 program in providing supportive housing communities for vulnerable, very low-income seniors.

Section 202 provides capital development grants and rental assistance contracts to not-for-profit housing sponsors to develop, build and maintain multifamily housing. It is the only program dedicated to developing supportive housing for seniors with very low incomes. 

These communities serve as a platform for the successful delivery of home and community based services. The combination of affordable housing and supportive services is often the only alternative that low and moderate income seniors have to nursing home care.

Years of level funding have resulted in fewer and fewer Section 202 units being built each year. Our elderly population will double by 2030. Demand is growing, cost effective options are needed for very low income seniors and development is desperately needed to spur the economy. 

The Section 202 program will pay dividends by reducing long term health care costs. This program can prevent early entry into institutional settings funded by Medicaid and forestall repeat hospitalizations and emergency room visits, saving Medicare dollars.

There are 3.6 million seniors living below the poverty level. The HUD 2009 Worst Case Housing Needs study includes 1.33 million seniors with worst case housing needs. There is a documented increase in the elderly and near elderly who are homeless. There are still 10 seniors on the waiting list for every Section 202 unit that becomes available, according to AARP. 

A 2008 HUD study recommends funding 10,000 units of Section 202 housing each year over the next 10-15 years to meet the demand. It is clear that a comprehensive national policy for affordable housing and services is needed or the current senior housing crisis will intensify.

Solutions

To meet our nation’s senior supportive housing needs, LeadingAge urges Congress to take the following actions:

Financing Housing

  • Provide at least level funding in fiscal year 2012 for the Section 202 program.
    Congress should continue its bipartisan support for the Section 202 program and the nation’s most vulnerable seniors. Policymakers should not give in to arguments that continuing to only house seniors already in Section 202 housing is enough. This approach ignores the demographic reality, overwhelming unmet needs and budgetary implications for not supporting cost-effective alternatives to expensive, federally funded alternatives. Within the Section 202 budget, Congress should allocate at least $91 million for new and renewed service coordinator grants and $40 million for the Assisted Living Conversion Program.
  • Develop a rehabilitation program for older Section 202 PRAC projects.
    The Section 202 PRAC properties built in the early 1990s are facing aging physical plants and need a means of accessing capital for rehabilitation and repairs. Currently, these properties have no ability to refinance like the other cohorts of the Section 202 program. In addition they are prohibited from taking out debt for rehab, from using their property as security for a loan or from using their PRAC payments to pay off a new mortgage. Legislation is needed to permit Section 202 PRACs to access capital for rehab and to permit PRAC to pay for the cost of debt service.
  • Fully fund 12-month renewals of all rental assistance contracts and advanced appropriations for payment continuity.
    In order for providers to maintain safe, decent, sanitary housing for seniors, federal rental assistance payments must be timely and adequate. We urge Congress to fully fund all project-based Section 8 contracts and Section 202 PRAC contracts for a full 12 months, and to provide an advanced appropriation to prevent disruption in payments at the end of the fiscal year.
  • Pass legislation to stimulate investment in the Low Income Housing Tax Credit program.
    While not accessible for very-low income seniors, the Low Income Housing Tax Credit program is a critical resource for moderate and low income seniors. The recent economic crisis has hampered the Low Income Housing Tax Credit  program and jeopardized affordable housing development and preservation deals across the country. We urge Congress to pass legislation to bring investors back into the program, including legislation to create a five year "carry back" for tax credits. In addition to serving low and moderate income seniors, the tax credit program can be combined with the Section 202 program to provide much needed gap financing to allow providers to serve the very low income and create mixed income communities.
  • Enact broad housing preservation legislation which includes provisions to address the newest crisis of maturing mortgages.
    The legislation would provide new tools to ensure preservation of affordable housing that might otherwise be lost when mortgages mature.
  • Fully fund all other affordable housing programs. Seniors make up one half of the HUD Section 8 voucher holders and one-third of HUD public housing residents. Congress must fully fund all affordable housing programs to avoid displacement and stem the tide of senior homelessness. Congress should make sure that full funding of affordable housing includes those programs serving rural seniors, the USDA Section 515 rural multifamily program and the HUD Rural Housing and Economic Development Program.
  • Provide dedicated funding for the National Housing Trust Fund.
    HUD estimates that through the Section 202 program it funds just 80% of the full development cost of new affordable senior housing communities. Funding the National Housing Trust Fund will create much needed gap financing to reduce construction time.

  • Develop and implement a comprehensive interagency policy including HUD and HHS to better coordinate housing and services programs.
    HUD and HHS have been meeting for over a year to develop joint programs and strategies that provide services to seniors living in affordable housing settings. A coordinated interagency effort is needed to eliminate barriers to service and to streamline service delivery for the elderly in affordable housing settings.
 



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