The Sad State of Affordable Housing for Older People

By Libson, Nancy | Generations, Winter 2005 | Go to article overview

The Sad State of Affordable Housing for Older People


Libson, Nancy, Generations


A crisis looms.

A crisis exists for older Americans who need affordable housing, and the crisis is getting worse. Decreased production, dwindling resources, and conversion of affordable properties to market rate all contribute to the crisis identified by the Commission on Affordable Housing and Health Facility Needs for Seniors in the 21st Century (2002) established by Congress.

All the statistics detail the exploding elder population, and it is not just baby boomers. The population of people over age 65 is expected to double by the year 2030, from 35 million to 70 million. Fifty percent of today's elders are over 75. The number of people over 85 - now 3.5 million-is expected to double by 2020 and double again by 2040. Half of the elders over 85 are disabled or frail, and that number is projected to double by 2030. More than one-third of elder households have incomes at or below $17,500. Indeed, a Harvard University report, State of the Nation's Housing2002, found that 8.4 million of the nation's 21 million elderly households have incomes of less than $10,500 a year. Among those with the lowest incomes (6.5 million), 38 percent pay more than 50 percent of their annual income for rent. About 1.3 million affordable government-assisted housing units are occupied by elders-with almost as many there as in nursing homes.

Given these data, the Commission on Affordable Housing and Health Facility Needs for Seniors (2002) estimated that an additional 730,000 rent-assisted units will be needed by 2020 to house elders age 65 and older who have housing problems.

CURRENT HOUSING PROGRAMS FOR ELDERS

Under various programs, the federal government has financed the construction of senior housing units and provided rental subsidies to make them affordable for low-income elders. However, of the programs described below, only the Section 202 program is dedicated to providing senior housing with supportive services, and that funding is always limited and even threatened in the current budget environment.

Section 202 Supportive Housing for the Elderly. The Section 202 Supportive Housing for the Elderly program was established in 1959 and remains the only direct-financing resource for construction of housing for older people. Today's Section 202 grant program provides capital advance funds to awardees, all of which must be nonprofits, as well as rental assistance (in the form of Project Rental Assistance Contracts, PRACS) to subsidize the operating expenses of the developments.

There are more than 300,000 Section 202 units in more than 6,000 developments across the United States. Although the loss of many federally subsidized housing units, including the Section 236 elderly stock and the early Section 8 developments, has meant a significant decline in the number of units affordable to low-income elders, the Section 202 stock in all its forms continues to be the mainstay of the federal senior housing programs. In its 2001 report, AARP estimated that there are nine elders waiting for each Section 202 unit that becomes available (Heuman, Winter-Nelson, and Anderson, 2001).

The Section 202 program serves the very lowest-income elders, those with few options. Qualified tenants generally must be at least 62 years old with incomes that are less than 50 percent of the median for their area. Some facilities have a percentage of units designed to be accessible to non-elderly people with mobility impairments or other targeted disabilities. Congress intended that all the Section 202 properties be built as supportive housing, requiring sponsors to describe in detail what supportive services will be offered; however, the rents may only cover 15 percent of the cost of services, typically a service coordinator in the newly developed Section 202s.

While Section 202 funding continues to be appropriated, flat funding, higher construction costs, and higher rental assistance costs have meant fewer new units each year. …

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