Working at B’nai B’rith International during the past year has afforded me the opportunity to visit our sponsored Section 202 buildings across the country. B’nai B’rith in partnership with Department of Housing and Urban Development (HUD) sponsors Section 202 housing for low-income seniors throughout the United States comprising 38 buildings that serve more than 4,500 people. While touring the properties, I have gotten to talk with residents and see exactly how seniors benefit from living there. Learning about affordable housing is always a humbling experience, never more so than visiting the food pantries in the buildings. Staff members in multiple buildings explained to me how residents, unfortunately, at the end of the month, often don’t have enough money for food. Consequently, these food banks provide vital nutrition for low-income seniors who now don’t have to choose between food and healthcare.
According to HUD, the average annual income for a Section 202 household is around $13,300 or $1,108 or a month. Clearly Section 202 residents are not a group of people from great wealth. Given the type of resident these buildings attract, I am saddened a proposal introduced by HUD may RAISE residents’ rental contributions.
For people reading this blog, you have read correctly! The policy recently proposed by HUD could raise the rent on low-income seniors!
First the proposal changes how HUD calculates Section 202 rental contributions from 30% of adjusted income to 30% of gross income. Simply put this change will subject more of low-income seniors very limited financial resources to rental contributions. Secondly, the bill is requesting $50 a month minimum for rental contributions. To put this in perspective, this impacts people who make less than $2,000 a year, the exact type of person who the government should be looking to shield from further financial hardship.
The Administration and some members of Congress argue that government spending is out of control with our country’s debt reaching around $20 trillion dollars. There is no argument that our country’s debt needs to be tackled. However, addressing our debt on the back of elderly Americans is not acceptable. How is a better way of governing, one that leaves seniors without a roof over their head?
The proposed legislation slashes assistance for our most needy seniors by reducing their assistance for affordable housing. If taking away basic necessities for low-income seniors is required to return our country to greatness, I think the Administration’s definition of greatness is in my humble opinion morally bankrupt!
Evan Carmen, Esq. is the Assistant Director for Aging Policy at the B’nai B’rith International Center for Senior Services. He holds a B.A. from American University in political science and a J.D. from New York Law School. Prior to joining B’nai B’rith International he worked in the Office of Presidential Correspondence for the Obama White House, practiced as an attorney at Covington and Burling, LLP, worked as an aide for New York City Council Member Tony Avella and interned for Congressman Gary Ackerman’s office. Click here to read more from Evan Carmen.
It has been a busy 2017 at the Center for Senior Services (CSS), and we are pleased to report on our advocacy efforts. Throughout the year we have been advocating on a wide range of senior issues relating to health care (Medicare and Medicaid), Social Security and affordable housing. Our work included meetings on Capitol Hill, organizing tours of B’nai B’rith sponsored buildings and co-sponsoring rallies on affordable housing. During the year we were excited that our work was noted by the Jewish Telegraph Agency (JTA), The Times of Israel and the New York Jewish Week.
Our advocacy efforts went into high gear in March when the White House’s proposed 2018 “skinny” budget was released, which called for a 13 percent reduction in the Department of Housing and Urban Development’s budget. A few months later when the administration’s more detailed budget was announced, B’nai B’rith was severely disappointed that Section 202, which is housing that was developed for low-income seniors, was underfunded and the White House proposed a rental increase for residents.
Staying on top of the issue, the CSS team started visiting senator and representative’s offices on Capitol Hill that represent B’nai B’rith sponsored buildings. Specifically, we met with offices that work on the House and Senate Appropriations Subcommittees on Transportation, Housing and Urban Development. These committees are responsible for writing legislation that funds rental subsidies for the Section 202 program. During the course of these meeting we explained to staff members how damaging the White House’s budget would be for low-income Section 202 residents. While the 2018 budget has not been finalized we are hopeful that our advocacy efforts on Capitol Hill will lead to the Section 202 program being funded more.
In addition, we followed up those visits by inviting members of Congress and their staff to tour B’nai B’rith Section 202 buildings throughout the country. We are pleased to report that Reps. Jamie Raskin (D-Md.), Matt Cartwright (D-Pa.), Grace Meng (D-N.Y.) and Charlie Dent (R-Pa.), representing both political parties, toured our sponsored properties. Furthermore, three of the four members who visited B’nai B’rith sponsored buildings work on the Appropriations Committees. These tours were a fantastic opportunity for members of Congress to see the benefits of the Section 202 program, and gave residents a chance to speak with their elected representative. Residents were able to directly tell their member of Congress the vital role Section 202 housing plays in their lives.
B’nai B’rith was also pleased to co-host with LeadingAge the “Save HUD 202” Rally and partner with the National Low Income Housing Coalition for the “National Housing Day of Action” over the summer. These rallies took place on Capitol Hill and featured representatives and senators who spoke about the need for affordable housing. We were certainly delighted members of Congress who represent B’nai B’rith sponsored buildings attended the event.
Our advocacy during the course of the year didn’t just stop with affordable housing. We spoke out against the White House and Congress’ attempts to repeal and replace the Affordable Care Act (ACA). After analyzing various proposed bills, B’nai B’rith was very concerned how these policies could negatively impact seniors. For example, many of the proposed replacement bills would have cut critical funding to Medicaid, allowed older Americans to be charged more for insurance, repealed vital taxes that help fund Medicare and waive important regulations that protect health care consumers. We spoke out on these issues by releasing press releases, blogs and joined with liked minded organizations opposing this legislation in a full page advertisement in Politico.
Recently, B’nai B’rith has been very vocal against the recently passed tax reform legislation. We expressed serious reservations about this bill because of the damaging impact it could have on funding for Medicare and Medicaid attributable to rising deficits that will give cover to members of Congress to slash spending. In addition, the negative consequences repealing the ACA’s individual mandate will have on older Americans. We brought our concerns straight to congressional offices during our regular scheduled Capitol Hill visits regarding Section 202. However, we certainly applaud Congress for not eliminating the Low Income Housing Tax Credit which is critical for affordable housing construction, and the medical expense deduction which is incredibly important to countless seniors with high health care costs.
The CSS team embarks on 2018 looking to continue our success from 2017. We will certainly look to invite more members of Congress and their staff to B’nai B’rith sponsored buildings, and advocate for the Section 202 program and other policies that are vital to seniors.
B’nai B’rith International Senior Services Staff: Mark Olshan, associate executive vice president of B’nai Brith International and director of the B’nai B’rith International Center for Senior Services; Janel Doughten, associate director of the B’nai B’rith International Center for Senior Services; Breana Clark, senior program associate; Evan Carmen, assistant director for Aging Policy.
This piece originally appeared in B'nai B'rith Magazine's Winter 2017 issue. To read this and other stories from the issue, visit our magazine online here.
I’ve always thought of myself as a caring person, considerate of others and always thinking that we have a duty to be part of a society in which we respect and help one another where and when we can. Call me a do-gooder if you will, but please know that I am proud to wear that label.
With Congress back in session, I continue to be baffled by its continued attempt to turn back the clock in the face of such overwhelming evidence of the number of aging Americans who require assistance with finding a safe, secure place to live.
The United States used to have a national housing policy focusing in part on creating affordable housing for older persons of limited means. Section 202 of the Housing Act of 1959 was the only federal program that provided safe, affordable housing exclusively for low-income elderly.
The program was envisioned as a partnership between government and community-based nonprofits like B’nai B’rith to supply housing to these individuals. The government would supply the financial means to build the property, while the nonprofits would oversee the initial development and ongoing operations. Subsidies, such as Section 8 vouchers, would bridge the gap between what the tenant could afford and the cost of that apartment.
Over time, the funding mechanism for the program changed from a direct loan, with interest payments to the federal government, to a simple advance of funds for construction.
Since 1971, B’nai B’rith has been a partner with the U.S. Department of Housing and Urban Development (HUD) in constructing and overseeing such properties. With 38 properties in 26 communities nationwide, we are the largest national Jewish sponsor of HUD-assisted senior housing. Our network comprises nearly 5,000 apartments available to more than 8,000 seniors.
In the 1960s and 1970s, the eligibility criteria were slightly refined. During the 1980s, “cost-containment” became the focus, and there was a shift to reducing the number of units being built and the overall construction cost. While budget driven, many of these decisions had an opposite effect. Having to replace and maintain systems cost more in the long term.
During the mid 1990s the program began to recognize and incorporate the physical and emotional needs of the residents, and the use of service coordinators become more prevalent.
With the aid of these professionals, residents were better able to obtain the support and services they might need to make aging-in-place more possible. HUD finally understood that providing some level of service support within the property often precluded a premature move to a more institutional setting for a resident, at a tremendous overall cost savings to society in general.
Even the definition of a well “independent” senior had changed. As these properties were basically apartments without medical or basic service supports when the program was initiated, one of the criteria for admittance into a HUD-assisted property was the ability to vacate your apartment in the event of an emergency. Today, residents are able to remain as long as they can direct the service supports around them to assist in vacating their apartment in the case of an emergency. Yet, today, nearly 40 percent of residents are considered frail and require assistance with some of the basic activities of daily living.
But, remaining in their homes with support beats having to move to a skilled-care or institutional facility many years before actually needing that level of medical support.
So, for a period of time, the program evolved and — despite severe budget cuts during the congressional efforts to reduce overall federal domestic spending — survive. Politicians from both sides of the aisle have taken pride in visiting these properties and publicly marvel at what they say is their tremendous value, not just for the individuals but for the whole community.
So, where do we stand now?
We know the country is growing older. The percentage of persons 65 and up is a larger percentage of the total population, growing from 35 million (12.5 percent) in 2000 to 49.5 million in 2016 (15 percent) to an expected 71.5 million (19.4 percent) by 2030. Compounding the issue is the increase in the number of persons 85 and older — 6.2 million in 2016, projected to grow to 6.9 million by 2020 due to our increased longevity.
But, the senior population’s sustained growth has not been matched by a corresponding growth in affordable housing. Currently, data show that there are at least 10 to 12 people on a waiting list for every available subsidized unit. The funding to create more of these properties has dried up. Currently, there are no federal dollars available to create new housing for this most vulnerable, growing population.
Where we housing advocates need to expand our efforts is to combat proposals currently being introduced in Congress that would charge current residents even more of their very low income to simply stay put. Even worse are attempts to cut subsidies completely, which could effectively throw current residents out of their apartments, and potentially into the street.
Remember, older persons must already have very low-incomes to qualify — below half of the area median income. Once deemed “income eligible,” they must pay 30 percent of their adjusted gross income for rent. If they have no income, they pay no rent. And we have a number of those individuals residing in our senior housing network. Bottom line is that these applicants were either homeless, near homeless, or at best, very low-income individuals.
Congress has recently debated amendments to the Transportation, Housing and Urban Development Appropriations Bill that would reduce these subsidies while increasing tenants’ contributions from 30 to 35 percent of their meager incomes and require them to pay a minimum amount of rent, or lose the apartment entirely.
And, taking this even further, 139 House members voted for an amendment to reduce funds for project-based rental assistance by $266 million in the current fiscal year, thus jeopardizing approximately 3,000 apartments which could be affected by this action. Fortunately the amendment failed, but the threat remains.
The numbers are alarming, and the White House is threatening to make a bad situation worse. The administration’s budget proposals include the most dramatic cuts to HUD programs since the 1980s, gutting federal housing assistance and redirecting the savings to “higher priority areas.” What could be of higher priority than making certain that vulnerable older persons of very low income status have access to safe, affordable and adequate housing?
Mark D. Olshan, Ph.D. began his career with B’nai B’rith in 1983 when he was hired as its Director of Senior Housing. He currently serves as Director of the Center for Senior Services and Associate Executive Vice President of B’nai B’rith International. He was awarded the Julius Bisno Professional Excellence Award in 2000. To view some of his additional content, click here.
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.
B’nai B’rith International is a proud sponsor of affordable housing for low-income seniors. Since 1971, working with the Department of Housing and Urban Development (HUD), B’nai B’rith has made affordable rental apartments available for seniors, which currently assists about 8,000 older people with limited incomes. Between 1959 and 2012, the federal government with the help of nonprofit organizations constructed affordable housing for low-income seniors. B’nai B’rith and HUD have been able to make these rental apartments available through various federal programs, most recently through Section 202 Supportive Housing for the Elderly. Currently, the Section 202 program is the only federal program that expressly addresses the need for affordable elderly housing for low income seniors (average income around $12,000).
These Section 202 buildings are able to provide a service enriched environment, often through the service coordinator program, which allows seniors to “age in place” and avoid moving to more costly institutional care. Unfortunately, in FY 2012 Congress stopped appropriating funding for the Section 202 Capital Advance Program that allowed for construction of new buildings. At the moment, Congress still appropriates funding for rental subsidies for the tenants who reside in existing buildings.
Recently, the White House proposed major reductions to the budget for HUD, and the low-income senior residents of Section 202 buildings unfortunately, might be the victim. Any proposed budget by the White House that reduces rental subsidies at the expense of affordable housing for seniors is an incredibly short sighted policy, and threatens to needlessly increase the federal budget. Long-term analysis demonstrates that 27 million older adults will be low-income in 2035, as compared to 15 million in 2015. Since the construction of new Section 202 buildings has remained stagnant since FY 2012, the demand for low-income housing is increasing while the supply of units is decreasing. According to the AARP, for every Section 202 unit that becomes vacant, there are 10 seniors on a waiting list. If additional affordable housing is not constructed, where are the 27 million low-income seniors supposed to live in 2035? Furthermore, cutting Section 202 rental subsidies only throws another log on the affordable housing shortage fire, for which the government has no strategy to extinguish.
According to HUD, 38 percent of Section 202 tenants are frail or near-frail, and consequently need help with daily activities, making them potential candidates for long-term institutional care. Section 202 community based services, like the service coordinator, have demonstrated a greater likelihood of retaining their residents and avoiding more pricey institutions. A HUD study from 2011, indicates, “the average age at which elderly households leave assisted housing is the highest for Section 202 residents compared to other housing programs.” Additional research concluded that housing programs like Section 202 are responsible for slowing the growth of Medicaid costs.
If the White House and Congress cut rental subsidies for Section 202 buildings it will only exacerbate an existing housing shortage. Members of Congress and the president should show political courage and demonstrate to their constituents that investing money in the Section 202 housing program allows seniors to “age in place,” and reduces unnecessary financial burdens on the federal budget.
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