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Affordable Housing Needs More Government Subsidies

by Richard Kuehn on 05/10/23

Burbank, CA Speaking at the C4A Conference 2023: Mapping the Future of Aging and Disability in California, held here May 9-11, panelists on the “Aging In Community: The Affordable Housing Crisis that No One is Talking About” panel lamented the lack of government incentives to build affordable housing.

Cherly Brown, Chair, California Commission on Aging and Former Assembly Member said, “Someday you’re going to get old.  There are an increasing number at risk of being homeless.”  She pointed to the high poverty level of seniors in California.

She said that the poverty levels of seniors, paired with a and lack of assets (seniors have an average of $54K in assets, which is the median cost of just one year of living in an assisted living facility).

Meea Kang, SVP Development at Related California said thatIndependent living is primarily how folks have been aging in their own homes.  As seniors age, they often need more care and support.  One step beyond that is assisted living and Board and Care facilities (6 beds or less).  One step further would be skilled nursing facilities.  As a commission, our goal is for advocating and providing for a range of services for long term care.”

Unfortunately, only two, IHSS and skilled nursing, have government funding.  “This is causing seniors to fall into homelessness at rapid rates.  There are over 200K living in assisted living facilities in California today.  The majority of the residents in assisted living today consider these homes their permanent living space.”

Tim Dunn, Associate Director of Housing Development at Mercy Housing at Laguna Honda Hospital in San Francisco said that Mercy Housing (a non-profit) is working on housing projects with 23K units in the country and 10K in California, all deeply below 60% of the poverty level.

“Service enriched housing is one of the options for the senior population,” he said.  Mission Creek Senior Housing is a project that is about 15 years old.  Rents are only about $300 a  month for residents with subsidies, roughly a third of their income as rent.  There are also services on the site.  “There is a resident service coordinator to make sure people get IHSS, transportation, etc.,” an important factor.

Residents get annual health surveys of Activities of Daily Living (ADLs).  There is also an Adult Day Health Care Center on-site. They can then go to their apartment in the evening with IHSS support.  “It’s not 24-hour care.  We don’t do IHSS, but we do get people connected.  One of the things you can’t do is plan for unscheduled needs.  We can’t administer medications.  San Francisco has experienced a great lost in assisted living which was historically small mom and pop facilities which are now no longer financially viable,” he said.

Laguna Honda Hospital Campus is a 62-acre site with capacity for large development, right on the muni line.  The city is allowing development of senior housing, which can support 250 to 300 units.  The city of San Francisco will provide free land and about $50 million in capital financing.

However, he said that, “Even with all of these resources we still are hitting a barrier with doing the licensed care.    This particular property is currently on hold due to financing issues,” he said.  Hopefully development will start next year.

Two other panelists, Dan McDonald, Deputy Director of Lending at Community Vision California Capital and Consulting and Michael Siglala of Innovative Development and Living Solutions of California worked on a project called Magnolia Crossing for years.

It’s a textbook case of a project that works but was developed about ten years ago and the model unfortunately isn’t financially viable anymore.  McDonald said, “I joined in 2012.  I had worked for a bank working with private and memory care.  The only financeable projects at my bank were large wealth developers.  I began to believe that affordable assisted living was possible,” he said. 

This project worked because U. S. Bank purchased the tax credits (assisted living waivers).  “What we would like to do is replicate how to do this in other communities.  The expansion of the assisted living waiver program(would help and many other programs with the state would provide the money that the community needs,” he said.

Sigala said, “I always worked in urban planning, and wanted to do some development.  I was the primary caregiver for my mom.  I saw this as a big emergency need for seniors, how do we house them?  One of the first people I talked to was Dan.”  In Clovis, they developed a project called Magnolia Crossing senior living community. 

They had a mixed income model of home like assisted living project.  There were a total of 48 units, developed in 2013, and they did it as a non-profit.  They received $10 million in funding to do a project that had never been done before.  The project was three homes about 10K square feet each.  One had 16 units of memory care, 36 other units were assisted living.  They were studio units, where everyone had their own bathroom. 

“Isolation and loneliness are two of the main factors influencing the senior community.  We have 35 full-time caregivers, LVNs, cooks, care and support staff.”  There are both very low income on Medi-Cal living with private pay.  10% of their residents are over 100 years old!  The new market tax credit program was the only program available at this time (you had to show a commercial component (services)) to make it work.    “The Assisted Living Waiver program is great but it’s unpredictable.  The reimbursement rates are 10-20% below what they could be to make this feasible,” he said.




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