Within the next 20 years, more than 70 million Americans will have reached retirement age, posing significant challenges for the senior housing industry and one the Department of Housing and Urban Development is looking to address.
Speaking before the LeadingAge Annual Conference in Washington, DC, Shaun Donavan, Secretary for HUD said the growing need for senior housing is taking place in the context of a very difficult fiscal situation. “With the need so great and our fiscal challenges growing every day, we need to find new ways of cost-effectively serving seniors,” he said.
For fiscal year 2012, HUD’s comprehensive strategy is to reform and renovate rental housing to strengthen our public and assisted housing stocks for the future. To do this, HUD is seeking additional authority to launch a rental assistance demonstration to preserve 255,000 homes supported by public housing and so-called “orphan” programs.
To enhance the Low-Income Housing Tax Credit, HUD is increasing the number of credits available to preserve federally assisted housing and allow for income averaging, which the Secretary said will be especially helpful for tax credit properties in regions with high rents. In addition, a bill signed by President Obama last December started to reform the Section 202 program to allow developments to leverage private capital to build and preserve more units and while making the program more sustainable over the long haul.
“These reforms include prioritizing developments that leverage other sources of financing such as the Low-Income Housing Tax Credit, new “Readiness” criteria for projects that are farther along and can house seniors faster, and a new way of targeting funds at a scale that makes better sense for owners and managers over the long-term,” said Donovan.
According to the Secretary, these reforms aren’t just about preserving and building more affordable housing.
“It’s also about ensuring that housing better meets the needs of seniors — and is the platform for delivering the supportive services frail, elderly and disabled households need,” he said. “That is precisely why demand for our Section 232 financing program has grown exponentially over the last two years — providing critical financing for assisted living facilities and nursing homes across the country.”
View a copy Donovan’s remarks here.