By Evan Carmen
Our country’s public housing program was first created in 1937 during the Great Depression with a goal of providing affordable housing to low-income individuals and families. The federal government continued to pass major legislation through the 1970s that increased the number of buildings created expressly for affordable housing. For example, in the 1960s and 1970s the federal government increased the number of buildings available for low-income seniors primarily through the Section 236 and Section 202 programs. Because the Section 202 program was created specifically for seniors, amenities and services came with the building that addressed the specific needs of the elderly. Unfortunately, since the 1980s affordable housing has exhibited a steady decline. Consequently, because of the political environment, the Low Income Housing Tax Credit (LIHTC) which was originally created with bipartisan support under the Tax Reform Act of 1986, has emerged as the best way to create and preserve affordable housing.
The LIHTC is administered by the Internal Review Service (IRS), which awards federal tax credits to the private sector to encourage investments in affordable housing. Ideally the federal government would reinstitute policies like the Section 202 capital advance program for the creation of affordable housing; however the LIHTC has been able to pick up some of the slack by creating additional low-income buildings. To further the point, the LIHTC helps finance about 90 percent of all affordable housing in the United States, and has helped fund the creation of about 3 million apartments since its inception.
The B’nai B’rith Housing Network is beginning to greatly benefit from the LIHTC by using this government program to benefit low-income senior residents. In St. Louis, Covenant Place Apartments used the LIHTC as a financing mechanism behind the rehabilitation of the property. Initial projections had the project costing about $84 million, with the LIHTC funding about $29 million or 35 percent of the initial cost estimate. When the project is completed it will offer 355 affordable apartments and a host of amenities. Joan Denison, executive director of Covenant Place said, “The LIHTC program made it possible for Covenant Place to embark on the redevelopment of its three aging and functionally obsolete buildings. Without the LIHTC funds, the cost of development would have been out of reach. Today, we have the new Covenant Place I, Harry & Jeanette Weinberg Building, providing 101 energy efficient, accessible one bedroom apartments, in which the residents say they feel healthier and happier. With a rapidly growing senior population that continues to live longer, there is a critical need for affordable, supportive and accessible housing. The LIHTC program is essential to the future of affordable housing.”
In Massachusetts, The Coolidge at Sudbury Apartments used the LIHTC to finance the construction of 64 units. Like Covenant Place in St. Louis, Sudbury Apartments used the LIHTC as a major financial driver to fund the cost of the project. For example, the total development cost of the project was about $16 million and the LIHTC contributed about $10 million of the financing.
Given the importance of the LIHTC in the affordable housing community, what is the outlook for the continued success of the program? Recently, the Trump administration released its initial tax reform policy. While the initial proposal does not address the LIHTC, the mere threat of tax reform has caused these tax credits to lose their value because they are tied to the corporate tax rate. Under President Trump’s proposal, the corporate tax rate would be reduced from 35 percent to 15 percent, causing potential LIHTC investors to have less tax liability. A decrease in investor’s tax liability lessens their desire to purchase the LIHTC. According to Todd Crow of The Affordable Housing Tax Credit Coalition (TAHTCC), the value of the tax credit has dropped from $1.00 per credit to as low as $0.85 per credit. While the fate of Trump’s tax reform proposal remains unclear, anxiety about the future of tax policy has caused the private sector to re-evaluate future construction projects.
Fortunately, all is not lost for the LIHTC! The good news is that The Affordable Housing Credit Improvement Act has been introduced in both houses of Congress to strengthen the LIHTC, and has received bi-partisan support. While both versions of legislation are similar, the biggest difference between the two bills is that only the Senate’s version expands the housing credit. The Senate’s legislation expands the housing credit by 50 percent, for the purpose of creating or preserving about 1.3 million affordable homes. However, both bills have provisions to make recapitalization of properties easier and establish a 4 percent minimum Housing Credit rate for finance acquisitions and Housing Bond-financed developments. If this legislation becomes law, it would inject a much needed jolt in the arm of the affordable housing community, which needed assistance even before the prospects of Trump’s tax reform proposals. The United States has a housing crises and the LIHTC is one tool to improve the issue.
Sen. Maria Cantwell (D-WA) said, “The affordable housing crisis is exploding all across the country. We are facing pressures from all sides: demand for rental housing has increased by 21 percent, but we are building units at the lower rate since the 1970s. If we do not act to increase the Low-Income Housing Tax Credit—our best way to build affordable homes—by 2025 over 15 million Americans could be spending half their income on rent. This is unacceptable.”
Based on the current environment, the United States federal government is still best suited to offer solutions to our country’s housing crises. According to Harvard University’s Joint Center for Housing Studies, without the LIHTC, “construction costs would have to be reduced by 72 percent of the current construction cost average” to see the development of new housing. Without the LIHTC, how is the private sector supposed to absorb the additional construction costs, and still provide affordable low-income housing?
Sen. Orrin Hatch (R-Utah), Ron Wyden (D-Ore.), Chuck Schumer (D-N.Y.), Brian Schatz (D-Hawaii), Patrick Leahy (D-Vt.), Dean Heller (R-Nev.), Jeff Merkley (D-Ore.), Cory Booker (D-N.J.), Lisa Murkowski (R-Alaska), Todd Young (R-Ind.), Susan Collins (R-Maine) Michael Bennet (D-Colo.), and Cantwell deserve credit for being original cosponsors of the Senate’s version of the legislation, and more members of Congress should come out in support of a policy that looks to increase affordable housing. Members of Congress need to act now, because according to The Affordable Housing Tax Credit Coalition 5.1 million senior households now use more than half their income on housing, and in 2030 the number of seniors is predicted to double.
Hundreds turned out when B’nai B’rith International, LeadingAge and other organizations co-hosted the Save HUD 202 Rally on Capitol Hill.
The purpose of the rally was to demonstrate how important existing Section 202 buildings are for low-income seniors and to indicate the need for additional funding for affordable housing, specifically for older Americans. B’nai B’rith launched its senior housing program in 1968, and since 1971, in a cooperative partnership with the Department of Housing and Urban Development (HUD), we have made rental apartments available for senior citizens with limited incomes, primarily through the Section 202 programs.
In May, the Trump Administration released its full Fiscal Year 2018 Budget and for the first time, the residents of Section 202 buildings could see reductions in their rental subsidies.
Unfortunately, the Trump Administration is proposing to give the secretary of HUD the authority to increase rental contributions from 30 percent of adjusted income to 35 percent of gross income, and increase minimum rental payments to $50 a month. Increasing the minimum rental payments to $50 a month would impact people who make less than $2,000 a year. While the administration’s proposed budget has a hardship exemption, I am curious to hear from the Trump Administration as to which low-income seniors who make less than $2,000 don’t qualify for a hardship exemption.
I think all reasonable people can agree, seniors who make less than $2,000 a year don’t need the federal government increasing their rent!
With Congress ultimately responsible for writing the federal budget, having hundreds of people at the rally on Capitol Hill was a great way for the housing community to express its concern for low-income seniors.
Also, B’nai B’rith was extremely pleased to see Senators Bob Casey and Robert Menendez and Rep. Al Green at the rally expressing their support for the Section 202 program. These members of Congress represent residents in B’nai B’rith sponsored buildings across the country, and we certainly appreciate their commitment to seniors and affordable housing.
During the rally Sen. Menendez said, “I am proud to stand with you today and every day to fight to protect and expand affordable housing for seniors.” We certainly urge other members of Congress to support additional funding for senior affordable housing as the need will only increase.
WATCH our Video Recap
Recently the “The Over-the-Counter Hearing Aid Act of 2017” was introduced in the Senate by Sens. Elizabeth Warren (Massachusetts), Chuck Grassley (Iowa), Maggie Hassan (New Hampshire) and Johnny Isakson (Georgia) with companion legislation introduced in the House by Reps. Joe Kennedy III (Massachusetts) and Marsha Blackburn (Tennessee). The purpose of this bill is to assist seniors with low-to-moderate hearing loss, access hearing aids by making them available over the counter. If seniors are allowed to get hearing aids over the counter, it would eliminate the onerous requirement that people get a medical examination or sign a waiver—bypassing the examination prior to receiving a hearing aid. In addition, the law would instruct the Food and Drug Administration (FDA) to write regulations to ensure the hearing aid’s safety and proper labeling.
This legislation is badly needed because Medicare often does not cover the cost of hearing aids, and the third most widespread chronic health condition confronting seniors is hearing loss. This Medicare coverage hole has caused an unacceptable 70 percent of Americans with a hearing loss between the ages of 65 and 84, to forgo the benefits of these devices because they are too cost prohibitive. With the average cost of a hearing aid at $2,400, paying for this device out of pocket for older Americans, especially low-income seniors, is not a viable option on their limited budgets.
According to Consumer Reports, the average retail markup for hearing aids is 117 percent because the market is controlled by only a select group of companies. Proponents of the bill argue that this legislation would create more competition for hearings aids and therefore decrease the cost. Opponents of the bill are skeptical this would lead to additional people purchasing hearing aids, and believe this legislation could cause people to self-diagnose hearing loss, and consequently not seek the guidance of medical professionals. However, according to Sen. Hassan, “Allowing certain hearing aids to be sold over the counter, just like reading glasses are, is a common-sense step that bring real cost savings to older Americans.” In addition, the National Academies of Science, Engineering, and Medicine states, “No evidence that the required medical evaluation or waiver of that evaluation provides any clinically meaningful benefit” and advocates “removing this regulation to serve consumers’ best interests.”
Increasing access to hearing aids will also improve seniors’ mental health. According to Dr. Frank Lin (assistant professor at Johns Hopkins University and an otologist and epidemiologist who focuses in the impact of hearing loss on older adults), hearing loss is a consequential part of aging. For example, he conducted studies that demonstrated hearing loss caused seniors to lose cognitive abilities and increased their chances of getting dementia. In addition, far too many seniors over time are losing one of their basic senses, the simple ability to hear. Can you imagine having a difficult time listening to music, watching TV or conducting a basic conversation? Until Congress expands Medicare to cover all costs associated with hearing aids, “The Over-the-Counter Hearing Aid Act of 2017” could provide seniors with more financial security by driving down the cost of hearing aids, and improving their quality of life.
Can Millennials Assume Responsibility for the Social Isolation Experienced by Older Adults by Creating Age-Friendly Communities?
The Senate Aging Committee recently held a two part series of hearings highlighting the issue of social isolation experienced by many people as they age. It was made apparent that there are serious physical health consequences to prolonged isolation—some experts say its equivalent to smoking fifteen cigarettes a day. The reality is this growing epidemic of isolation will only increase in the coming years as the number of older adults continues to surge. Considering all the technological, infrastructural, social and cultural responses required to properly address this need, I’m left dwelling on the role young people, and particularly millennials like myself, can have preventing the social isolation of our older neighbors.
We know that a whole range of societal changes contribute to isolation in aging. Changes in our birth rates, family structures and our proximity to relatives are all shifts that have been well documented. Additionally, there are common occurrences late in life that can create isolating circumstances: a late career job change, retiring, moving into different housing or a change in cultural surroundings. But, I think there is much more to this. As a result of the pervasive ageism in America, isolation as one ages is exacerbated. Throughout our society, we either stereotype older people or exclude them from critical planning efforts—or both. By excluding, whether purposefully or inadvertently, the contributions and perspectives of older adults from spaces where major decisions are made, we create a society where it is increasingly more difficult for them to thrive.
Our communities, whether rural or urban, should be safe and age-friendly from walkability to bus routes to housing design. Our workplaces should allow people to work as long as they are able to perform the duties of their job and recognize that older adults have a lot to offer, especially to young people who are newer to the workforce. Housing should be both affordable and available to everyone, and especially those that reach retirement age. We should design and build housing that will work for any resident, whether they are old, young or disabled. Technology should be accessible to those who did not learn how to operate personal devices at a very young age.
However, in order for these things to exist in our society, we must address the underlying causes of systemic ageism. Without doing so, we will continue to exclude a great portion of our population. We, inevitably, will continue to tell our future, older selves, “At some point, your opinion and needs are no longer important to greater society.” We must recognize that the risk factors of isolation are only more pronounced as a person ages because of their inability to have a “seat at the table.” In every industry, and particularly in technology, it is imperative that we stop expecting older people to create their own solutions without ever giving them the tools to do so.
Millennials have a unique role in addressing the ageism that has fostered a culture of leaving seniors out of the equation. Now the largest generation in the workforce, millennials are represented in every industry. Instead of being yet another generation that expects older people to adapt and integrate themselves in a society built around the young and able-bodied, what if we strived for deliberate inclusion? And, what does taking responsibility look like?
First, the thoughts, solutions and perspectives of those experiencing isolation should be at the forefront of every initiative around social isolation and age-friendly communities. This can look as simple as reconciling the gap in communication used by different generations. It may also involve urban planning that includes realistic walk times at intersections, or smart phones that do not operate on intuition that only a young app developer may possess. Including all people in our society is not just an idealistic, fuzzy feeling, it’s good for business! Imagine having a community where transportation was not a barrier to carrying out daily errands, or relying on technology to purchase home goods was not a frustrating, humiliating experience.
What if, from the beginning, we were cognizant of the difficulties that can result from a society increasing its dependency upon technological advances? What if—by simply asking—we were to realize that seniors are more than capable of providing solutions to the barriers one experiences as they age?
Until we make the conscious, purposeful decision that older members of our community not only should, but have to be a part of planning the society we want to live in, we will find ourselves trying to fix the mistakes we’ve made or, worse, assume that the opinions and lives of seniors are not important. We must be aware that the built environment and social environment are interdependent. The culture shift necessary for such consideration would require the empathy to understand that most all of us, if we are so lucky, will experience the changes presented through aging. When we talk about the “special needs of seniors,” we should remember that these are considerations that we all deserve throughout our lifetime.
As a young, able-bodied person, accessibility and inclusion should be tenets I lift up out of empathy for others and, at the very least, out of self-interest! I know that a society in which there are barriers to participation and socialization for some of us will, inevitably, hurt us all.
(Photo via Flickr)
It is somewhat bittersweet that I have been asked to share my thoughts on our ongoing seniors’ program. While I’ve written for the magazine in the past, I’ve now been asked to focus on aging policy and offer insights from my perspective, as a baby boomer and a B’nai B’rith staff member for 33 years.
Rachel Goldberg, who served as our director of aging policy and authored this column for many years, has moved on to the AARP, or the “big” house, as we playfully refer to the country’s largest advocacy group for seniors. For more than 13 years, Rachel was my right hand in analyzing, reporting and generally trying to make sense of the myriad changing policies and programs that affect our aging population. We are grateful for the many years she spent with us. She will be missed.
But we’re not the only ones experiencing changes. As you are no doubt aware, the entire country is in the midst of a sea change, affecting the role of the federal government in our lives. For B’nai B’rith, this presents an enormous challenge, as a new administration with an announced intention of cutting back on federal programs takes office. Not the least of these is providing low-cost housing to seniors.
I began at B’nai B’rith as the director of our Senior Citizens Housing Program. Some years earlier, a group of dedicated B’nai B’rith volunteers, all experts in the building trades, petitioned the organization to allow them, under B’nai B’rith auspices, to sponsor affordable housing for low-income seniors in their communities.
Using a remarkable program from the U.S. Department of Housing and Urban Development (HUD) that made grants available to nonprofit sponsors, this group provided the “sweat equity” and opened the first B’nai B’rith-sponsored senior community in 1971 in Wilkes-Barre, Pa. Since then, the B’nai B’rith Senior Housing Network has grown to be the largest national Jewish sponsor of HUD-assisted housing in the country. It is currently available in 28 communities nationwide, and we’re proud to say that nightly 8,000-10,000 seniors call a B’nai B’rith sponsored property home.
Obviously, we take this commitment to these communities and to our residents seriously. That’s why we work throughout the year to provide resources, training and information to the dedicated people who manage, lead and staff these properties.
Our program exists for the benefit of the residents and their extended families. That’s why we do what we do. But, we cannot do it alone. We need the government’s help because housing costs money. And we are committed to working with the federal, state and local governments to provide the resources to make affordable housing a reality.
For 30-some years, I have led the organization’s efforts to advocate for the federal housing finance program that has allowed us to build such excellent communities, and to continue to provide them to low-income residents at a fraction of market rate rents. As an advocate, I champion not only the current residents, but the tens of thousands of people currently on waiting lists for low-income housing like those we sponsor. I speak on behalf of the hundreds of thousands of boomers who will find themselves, very shortly, in retirement, and in similar need.
The “graying of America” is not something in the far-off future. It is here now and will only grow larger. Every day, more people turn 65. B’nai B’rith, along with other nonprofit groups, had been instrumental in shaping, expanding and improving HUD’s housing program for the elderly. But, the program is no longer being funded. This has put the future in jeopardy for residents, both present and future. And that is unacceptable.
The program is fiscally troubled. Affordable housing is scarce, and we need to build more for moderate and low-income people. Affordable housing appropriate for the needs of older adults, and where services can be brought to them in a more cost-efficient way, is essential. But building housing—something we absolutely must do if we want to address the long-term affordable housing crisis in this country—is more expensive than simply subsidizing rents in existing apartments.
On average, nationwide, there are more than 10 people waiting for every low-income rental unit available. In other words, we must build, but we don’t have sufficient federal resources to do it.
The key may be a combination of vigilant advocacy and a new strategy supported by recent housing research. One thing the government is very good at is counting things: From missiles bought, to meals served, to millions taxed, the government keeps a tally. But it is not as good at counting how spending in one area can save money in another.
We often say Washington works in silos: lots of communication (and counting) up and down a federal department but very little communication between them. This poses many problems, especially when people’s needs don’t fit into one of those silos. In the 1980s, the federal government established a task force across departments, including housing and health, to work on homelessness. It turned out that many of the homeless were mentally ill, had substance abuse problems, were veterans and, in some cases, all three. So, solving the problem of homelessness really meant tackling a variety of issues.
With elderly housing, we know there is a similar crossover because supportive housing for older adults, with appropriate services, is an alternative to unnecessary nursing home placements and other pricier options. Many of our residents are able to live independently with support, but without those services, many would be unable to do so; and, with no financial resources, a nursing home placement through Medicaid would be their only alternative. A month in a nursing home costs Medicaid about $8,000. A year in a nursing home costs just under $100,000. For one person! So yes, housing is expensive, but so is health care. Combining the two, taking advantage of economies of scale, work to the long-term benefit of the resident and, at the same time, saves money on health care. So, if new research on the health care savings generated by affordable housing is taken into account, building new housing doesn’t seem so expensive. And, that’s just one way in which subsidized housing can reduce health care spending.
Housing is necessary and more affordable than other options, and it meets the needs and wants of older adults. People do not want to be in a nursing home if they have more independence with some regular service support. The bottom line is that spending money on bricks and mortar can save money by reducing the amount spent on health care. Hopefully, this will help the number crunchers in Washington to see the light.
Over the years, I haven’t had many opportunities to be on the front lines of these policy debates, but I guess it’s time to get back into the game and step up to the plate.
B'nai B'rith International has widely respected experts in the fields of: