Why Affordable Housing Is So Important

The cost to rent or purchase housing is becoming increasingly less affordable to millions of people, both for those on fixed retirement incomes as well as those who have not yet reached retirement.

RHF provides apartment units for persons with disabilities and for low-income families, but the majority of RHF’s units are for older adults who have a fixed income.

The Graying of America

With the “graying of America” the number of persons 65 years of age and older is growing dramatically. While many in this “age wave” have the financial resources they need, there are also many who do not. For those who have only small pensions, social security, and a few assets, their only hope for safe, secure, and affordable housing is through units built with the assistance of the Department of Housing and Urban Development (HUD) or through tax credit programs.

While the “age wave” is exploding, the numbers of new apartments built under the HUD 202 program has decreased from 20,000 units a year in the late 1970s and early 1980s to only about 4,600 a year now. Now, for the third year in a row, a proposed federal budget does not include construction of any new HUD 202 communities.

HUD acknowledges that the 202 program has been the finest senior housing program they have ever done. Sponsors, like RHF, who receive the annual awards must be legitimate non-profits, which means that the affordability of the units is secure for 40 years or longer.

Persons who are fortunate to rent a unit pay 30% of their income as their share of the rent and the balance of the cost to operate the building is made up through a subsidy from HUD. Sponsors do not make a profit from construction or operations and receive only a management fee for management services. RHF applies for new units every year and usually receives several awards, which means we are always in the process of designing or constructing new buildings. In 2011 (the last year grants were awarded), RHF received four grants totalling $40.6 million to build new communities in Los Angeles, Houston, and San Antonio – the most grants awarded to any non-profit in the nation. We have broken ground on the two communities in Los Angeles and have plans to break ground on the two Texas communities shortly.

RHF also builds housing under the state and federal tax credit programs, but these buildings do not have a rent subsidy. This means that persons whose only income is social security and a small pension generally cannot afford the reduced tax credit rents. However, there are a great number of persons who benefit from these programs.

Preserving Affordable Housing in America

What makes matters worse is that the United States is losing thousands of units of existing affordable housing each year. Originally, to incentivize for-profit developers to build affordable housing, the government funded programs that helped finance new construction with a promise that after 20 years owners could convert the buildings to conventional housing. Now, as the 20 years are ending, affordable housing is being transitioned to for-profit housing.

RHF has acquired a number of these buildings (most recently, Essex Village and Kings Grant in North Kingstown, RI) from willing sellers to preserve their affordability. Often these are large, well-built structures in desirable areas which, if converted to market rents or condos, would never be replaced as affordable housing.

As a founding member of SAHF, Stewards of Affordable Housing for the Future, RHF advocates for favorable legislation that influences preservation and encourages finding creative solutions to the affordability crisis.

Safe, secure, affordable housing is a basic human need. As we advocate in our vision statement, we want to eliminate circumstances in which persons have to make desperate choices about which necessities to pay for. We believe that it is illusionary to believe that we can have good healthcare in this nation unless people have decent, safe, secure, and affordable housing. We believe affordable housing is the base that makes good health a possibility.

Our mission is about quality of life. Twenty years ago at the dedication of a new building a new resident said, “I want to tell you my story. Six months ago my social security income was $790 a month. My rent was $550 a month and going up every 6 months. I want to thank you because you have made it possible for me to live and to enjoy life again.”

The number of RHF communities has more than doubled in the last 20 years. We are passionate about affordable housing because the demand is great and because we want to run quality communities where people can live and enjoy life, free from deprivation of basic human needs.

Laverne R Joseph
Retirement Housing Foundation