As reported by the U.S. Administration on Aging 2017 Profile of Older Americans, over 4.6 million people age 65 and over (9.3%) were below the U.S. poverty level in 2016, and another 2.4 million were classified as “near-poor” (income between the poverty level and 125% of this level.) Even though this represents about one of every ten older persons, it underestimates the true burden of poverty since it doesn’t adjust for expenses such as health care and housing.
The U.S. Census Bureau’s Supplemental Poverty Measure (SPM) shows a significantly higher number of older persons below poverty. Under the SPM poverty measurement, the number of persons age 65 and over have a poverty level of 14.5 percent, higher for women, persons living alone and minorities. Most seniors rely on Social Security for their primary source of income. The cost of housing has dramatically increased in recent years resulting in low-income seniors not being able to secure safe and decent housing even if they spend most (if not all) of their Social Security payment on rent and utilities (the 2019 average monthly Social Security is $1,300 and most of our residents receive even less) leaving little funds for food and other necessities.
Between 2006 and 2016, Social Security payments rose just 6 percent in real terms while the median rent for households age 65 and over climbed at twice that rate. As noted in the accompanying article by EHDOC Chairman Chris Sheldon, HUD classifies persons paying more than one-half of their monthly income for rent or living in severely inadequate housing as “worst case” rent burden; and confirmed that there is a growing increase in the number of older Americans with worst case housing needs. We clearly need to assist low-income older persons to quickly obtain affordable senior housing.
I commend our EHDOC residents who joined more than one thousand other seniors from around the country at the U.S. Capitol several years ago to rally for the restoration of Section 202 funds to develop affordable senior housing (Housing with a Heart Summer 2017.) Our residents and others expressed their concerns that Congress had not funded Section 202 development funds for the past few years despite the critical shortage and increasing need for affordable senior housing. It was great that their voices were heard because $105 million for Section 202 development was included in the FY2018 Omnibus Appropriations bill that was enacted on March 23, 2018. While the funding was not as much as the $582 million funded in FY2010 and preceding years, it was the largest funding for Section 202 development since FY2010.
We were pleased and looking forward to the Administration allocating the funds so that EHDOC and other non-profit organizations could again use Section 202 funds to develop affordable senior housing. It was more than a year later, however, including the historic 35 days government shutdown, when HUD finally announced on April 4, 2019 the Notice for Funding Availability (NOFA) for Section 202 development funds.
We were pleased that the funds were finally available, yet annoyed and deeply concerned that HUD was allocating less than half ($50 million) of the $105 million that Congress had appropriated. The Administration indicated they intend to allocate the balance of the FY2018 funds next year in 2020 (as well as the additional $51 million FY2019 funds that subsequently had been passed by Congress on February 14, 2019.) Yet again, further delays.
The Administration justified postponing these Congressionally passed Section 202 development funds to provide more time for non-profit organizations to prepare for HUD’s newly imposed “leveraging” requirement for the very competitive Section 202 funds. EHDOC and other developers of affordable senior housing have already needed to obtain additional public and private funding due to the inadequate and reduced Section 202 funding over the past few years.
While EHDOC is pleased to have positive working relationships with state and local governments regarding securing additional funds to expand, enhance, and expedite our development of affordable senior housing, the Administration’s newly imposed leveraging requirement could make it even more difficult to secure these additional funds since the Administration had also proposed (a couple weeks before the Sec. 202 NOFA) in their FY2020 budget to eliminate or severely cut many of the existing federal programs that state and local governments have used to assist with the development of affordable housing.
On March 11, 2019, the Administration released its proposed FY2020 budget that would impose a 5 percent cut for most non-defense federal programs. For HUD, there would be significantly deeper cuts of $9.6 billion. Cuts include the elimination of all funding for the HOME program, Community Development block grants, and the National Affordable Housing Trust Fund. Not only would the Administration’s proposed FY2020 budget impose deep cuts to affordable housing programs, including zero funding for Section 202 development; but it would also undermine the capacity of state and local governments to have the resources that non-profit organizations need for the new HUD imposed fund leveraging requirement in the Section 202 NOFA.
In addition, the GOP tax cuts enacted last year reduce incentives by corporations and others to invest in the Low-Income Housing Tax Credits program that EHDOC and others have used for affordable senior housing. See my article on the impact of the tax cuts on affordable senior housing in Housing with a Heart Spring 2018. I am proud that our seniors participated in the Section 202 rally in the summer of 2017, however, we are still waiting the full allocation of the $105 million Congress passed for FY2018. This past May, our residents again participated in the “Affordable Senior Housing NOW” rally for FY2020 funding. It is vital that our voices continue to be heard to restore Section 202 development funding to at least $600 million (approximately the funding level provided in FY2011 and earlier years.)
It is especially important this year since there are nearly one hundred new members of the 116th Congress who may not be familiar with the critical need for and benefits of this vital affordable housing program. Please continue to make your voices heard on behalf of low-income seniors nationwide struggling to obtain affordable senior housing!